The registration date of the final deed on property transactions eligible for reduced tax rates has been extended by three months from the end of June to the end of September, Finance Minister Clyde Caruana announced on Monday.
The scheme was first introduced as a temporary COVID-19 measure for promise of sale agreements in June 2020 and subsequently extended. It provides for a reduced tax and stamp duty rate of 5 per cent and 1.5 per cent respectively on the first €400,000 of a property's value.
Caruana said that 8,615 promise of sale agreements had been registered in terms of the scheme by the end of December and it is these promise of sale agreements which must be concluded by September to benefit from the scheme.
The deadline for the publications of the deeds was extended to the end of September on advice from notaries and banks, who needed more time for research on the properties, Caruana said.
He said that last year 26,000 contracts benefited from favourable tax rates, saving their owners a total of €151 million on properties having a total value of €5.1 billion.
The 8,615 contracts yet to be signed have a total value of €1.7 billion and are set to benefit from €50 million in reduced taxes.
Good uptake of scheme to encourage sale of older properties
Caruana said that budget measures to encourage property buyers to seek older or abandoned homes had also seen a good uptake.
The scheme, announced in October as part of the budget, waives stamp duty and capital gains tax up to the first €750,000 of the value of properties as long as these were built more than 20 years ago and have been vacant for seven years, as well as properties in the Urban Conservation Area.
When it comes to UCA properties, some 250 sellers and 97 buyers benefitted from €2.7 million in reduced tax on properties that total €22 million in value.
Some 40 sellers and seven buyers made use of the scheme on vacant properties, seeing a reduction of €100,000 in tax dues on properties valued at a total of €1.4 million.
“We are seeing that this measure is already having a substantial impact on the property sector as more people are seeking to purchase within a UCA,” Caruana said.
“This is part of the government’s initiative to allow more people to own their own homes and incentivise regeneration in our towns and villages.