Government Grants One Can Apply for to Renovate An Old House

The government first announced the grant scheme to renovate an old house in the Budget 2022 speech. This VAT grant scheme is a tax incentive granted to those people who are fixing up old properties in specific Urban Conservation Areas (UCAs).

This grant offers property owners up to €54,000 in VAT refunds for certain types of properties that are purchased and restored. The aim here is to stimulate the property market in Malta.

Malta vat government grant on property

Who is eligible for the Government Grant to Renovate Old Houses in Malta?

Photo by Ferenc Horvath on Unsplash

There are multiple conditions that need to be met in order for you to be able to apply for this grant.

As stipulated by the Times of Malta, you must be a Maltese resident over the age of 18 years old, and the property in question must be owned by you as your private residence. The property must be:

-In an Urban Conservation Area in Malta or Gozo

-Built at least 20 years ago and empty for at least the last 7 years

-Or new but built and finished in line with “established guidelines” and approved as such.

Planning Minister Aaron Farrugia specified that the buildings would have to be built in traditional Maltese style. Applications would be assessed by a committee appointed to decide what ‘traditional style’ actually means.

This scheme is open until December 2024.

What is the value of the property that will be eligible for the Vat Grant Scheme?

The exemption from capital gains tax and duty applies to properties on the first €750,000 of their value.

Property buyers who have already entered a Promise of Sale agreement on eligible properties will still be able to benefit from the VAT Grant Scheme as long as the final contract has not been signed yet.

What is required when applying for the grant to restore your UCA property?

No matter which criteria you are applying under, the following requirements apply:

-All fiscal receipts for related works must be submitted

-The receipts must include the applicant’s details and the address of the property

-Applications will be accepted online.

Different criteria under which you apply have different application requirements:

If you are applying for refunds for a UCA property, you must be able to show certification by the Planning Authority that your property is actually within a designated UCA.

If your property falls within the category of being built at least 20 years ago and vacant for at least 7 years, you will need to prove this by submitting a report from ARMS (utility billing agency) confirming the property was vacant. The architect will also need to certify the building’s construction date.

For properties that are new but with traditional Maltese finishings, the “established guidelines” are yet to be defined. But you will need a certificate from the undefined “competent authority”.

Which properties will not qualify from being eligible for the VAT Grant Scheme?

Your property will be disqualified from being eligible for this grant scheme if it has any of the following criteria:

-Illegalities

-Unauthorised works that need sanctioning

-Pending PA enforcement cases

-Pending regularisation cases

Works eligible for the VAT Grant Scheme refund:

-Works must have started from 12 October 2021 onwards

-Costs related to restoring and finishing your property are eligible

-Costs related to both interior and exterior works
-Professional fees at a maximum rate of 10 per cent of total eligible expenses applied for each application.

Works not eligible for the VAT Grant Scheme:

The following expenditures are not covered by this grant scheme:

-Demolition works

-Alterations

-Additions or improvements that do not qualify as restoration or finishing

-Restoration or conservation works of movable objects, artefacts or furnishings

-Reconstruction or reinstatement works in UCA properties were done despite a lack of historic evidence of their detail or design.

This scheme is valid until December 2024 so you’ve plenty of time to apply. Of course, there are still several elements that require explanation. If you’d like the help of real estate agents at Zanzi Homes, please contact us directly and we’ll dedicate the time and energy needed to make this process as smooth sailing as possible.

Main blog photo by Zoltan Tasi on Unsplash