Malta’s minimum wage should rise to at least €1,100 a month while corporate tax rates should be harmonised to remove disparities between foreign and local firms, the Malta Developers Association believes.

The proposals are among a raft of suggestions that the MDA has presented to the government ahead of its Budget for 2025.

Those suggestions range from the expected, such as renewing schemes to encourage the restoration of old properties or purchases by first- and second-time buyers, to more left-field ideas, such as tax breaks for people who park their cars in garages or making interest paid on home loans tax-deductible.

Arguably the MDA’s most radical pre-budget proposal, however, is that of totally overhauling Malta’s corporate tax structure to result in a flat 15% rate for all businesses.

The MDA would like to see tax rates for foreign businesses gradually raised from their current effective 5% rate, while tax rates for local entrepreneurs are slowly slashed from their 35% rate.

The MDA has encouraged the government to buy up private land and convert it into green open splaces. Photo: Matthew Mirabelli

To help address housing affordability, the MDA is proposing a revamp of tax rates for landlords of rental properties. The MDA believes that long-term rental properties rented out for €1,000 or less should be subject to a 5% tax rate. Currently, all rental properties are subject to a 15% rate, irrespective of value.

Other MDA proposals include:

1. Tax incentives for constructing greener buildings or retrofitting existing ones with energy-efficient materials.
2. Incentives for developers to buy energy-efficient machinery
3. Expanding incentives to restore Urban Conservation Area (UCA) properties to traditional properties everywhere, irrespective of location.
4. Revamping AIP (Acquisition of Immovable Property) permit rules for foreign buyers. The MDA wants foreign buyers who purchase properties worth more than €1 million or in UCAs to be exempt from AIP requirements.
5. More concerted efforts by the government to buy– or swap - private land and convert it into open green spaces.
6. Continued use of PPPs to develop national infrastructure, with a major focus on electricity, water, drainage and road infrastructure projects.
7. Doing away with costly and time-consuming notarial research of properties by revamping the Lands Authority’s IT systems. This would speed up and simplify property purchases, the MDA says.
8. Incentives to help young families upsize their family home and pensioners downsize theirs.
9. Property transfers between living family members should be subject to a flat 1.5% tax rate, to encourage such properties to be used rather than left abandoned.
10. Scrap the PA’s Commuted Parking Payment Scheme, which the MDA believes has been a failure.
11. Simplify red tape and improve communication between state authorities to avoid duplication of bureaucracy
12. Children who inherit property should only be required to pay inheritance tax once they turn 18.