Tax reduction on property: Deadline for submission of contracts extended by three months

Sabrina Zammit Monday, 21 March 2022, 14:54 Last update: about 3 years ago

Photo: Miguela Xuereb / Newsbook

The submission date for property contracts to benefit from the Covid related tax reduction has been extended till the end of September, Finance Minister Clyde Caruana said on Monday.

The scheme provides for reduced tax and stamp duty on the first €400,000 of a property's value.

During a press conference, he said that since there is a backlog in contract related research from notaries and banks, it is going to be difficult for future homeowners to submit their applications in time by the end of June, to benefit from such a measure. He added that such research needs to be done properly, and that is why the date of submission will be extended till the end of September.

This tax reduction measure will also benefit the 8,615 promises of sales that were submitted by 31 December 2021.

The government had announced this preferential tax rate to stimulate the property market during the hard times brought about by the pandemic.

In giving an update on property related transactions, the minister said that last year there were a total of 26,600 contracts signed amounting to €5.1 billion.

He added that the 8,615 contracts that need to be signed by the end of next September to benefit from such a measure amount to €1.7 billion. It is expected that the tax saved on such properties will amount to €50 million.

He also spoke about another budgetary measure which seeks to reduce TAX on UCA property and dilapidated property. Caruana said that there are already 250 sellers and 69 buyers who are benefitting, with contracts amounting to €2.7 million.

Because of such a measure, buyers and sellers are expected to save €2.2 million.

Caruana said that in the few weeks since the scheme has been operating, it has already left a substantial impact on the property market.

Apart from this, first-time buyers who buy a delipidated property or properties in UCA areas can also benefit from €15,000 in restoration and up to €3000 in VAT reclamation.

The finance minister said that all these measures are helping in the regeneration of several cities and villages in Malta.