The Malta Developers Association (MDA) has expressed concern at the way the property market is being taxed by the government, in particular the imposition of the 12 per cent Final Withholding Tax on the market value of the property being sold.

It appears that government is refusing to recognise that the property market is not what it was and continues to insist that market values have remained the same as they were a few years back, when in reality the situation has changed completely.

When this market is in difficulty, it is in the interest of the national economy that there are no obstacles to the process of what should be a free market – that is, a market that leads to the rise and fall of prices according to circumstances.

The MDA feels that with the current system, there are too many instances when the Final Withholding Tax of 12 per cent on what the government believes to be the market value is so high that the tax exceeds the capital gain that is supposed to be taxed. This discourages the possibility that prices will go down and is putting those who are under pressure to sell their property at low prices because of bank loans and other factors in an impossible situation.

The association acknowledges that developers have to face the consequences of the risks they have taken and not expect the government to help them or subsidise them in any way. All the association is asking is that the tax imposed by the government is just and not one that leads to an artificial increase in property prices when the circumstances indicate otherwise.

As such, the association appealed to the finance minister to take steps that would lead to the resolution of the problem as quickly as possible.