Under 40s who cannot afford the initial deposit on a home loan will be eligible for a €17,500 interest-free loan, as part of a series of measures announced to improve access to housing.  

The loans will be repayable over 15 years and Finance Minister Edward Scicluna said the government would pay the interest. Further details will be announced, including the banks participating, once the scheme is rolled out in the coming months.  

This is not the first time the government has reached an agreement with local banks to help potential home owners get a foot on the property ladder. 

Back in May Prime Minister Joseph Muscat had announced the start of a scheme to help people aged over 40, notably separating couples, buy a property.

That scheme had first been announced in the Budget 2019 speech, and was for properties worth up to €200,000. 

Back in 2018 the government had reached an agreement with Bank of Valletta to facilitate home loans for properties worth up to €120,000.

This had followed other agreements between the government and banks, including ones in which the government had committed to help pay part of the loan repayments for first time home owners.  

Stamp duty exemptions roll over again

The popular stamp duty exemption for first-time buyers will be extended for another year.  

This will now cover properties valued at up to €175,000, up from the previous maximum of €150,000. 

Prof. Scicluna said the measure will see first-time buyers save up to €6,500 of tax. 

The exemption was part of the measures announced by the Labour government during its first Budget back in 2013.  At the time it was capped at properties with a value of no more than €150,000. It has since been rolled over year-on-year. 

In Budget 2018, the government had announced a stamp duty reduction scheme for second-time buyers. 

Prof. Scicluna said this scheme would also be rolled over for another year.


Property: What the analysts think

“Government has focused its measures on the property market to improve affordability. With growing concerns on the price increases, this budget responded with a number of measures. The launch of the means-tested interest-free loan, the extension and increase of the stamp duty exemption for first-time buyers and a housing benefit for people that rent are all aimed at answering this growing policy concern. The question is whether the market is adequately catering for such properties.” – Luana Farrugia, ARQ


Other initiatives, including tax exemptions for the purchase of vacant properties and properties in Gozo would also be rolled over, he said.  

Refund schemes for restoration would also be rolled over.

Back in 2016 the government had announced rebates for renovation works on certain properties.

Prof Scicluna announced a new exemption for those who buy a property they have been living in but did not own. This would apply even if the applicants were not first-time buyers. 

Meanwhile, if you inherit a property and chose to live in it, then you can now benefit from a reduced tax rate of 3.5% on the first €175,000. 

Transfers of promise of sale agreements 

People transferring a promise of sale to a third party will be subject to a 15% tax. 

This activity was previously taxed at 35%. 

This tax would have to be collected by a notary in the same way that a tax for transfer of property is collected.  

Developers say too much trading in cash has been going on and have long been calling on the authorities to take action. 

Housing benefits

A housing benefit scheme for tenants paying more than 25% of their income has also been extended for another year.     

Prof Scicluna said that as of January, the annual salary cap for single people eligible to receive the benefit will increase from €14,500 to €19,000. 

In the case of a couple with two children, their eligibility cap will rise from a maximum income of €28,600 to €32,000. 

In June the government announced a major reform of the rental market, which included capping on rental price increases. The government has also rolled out tax incentives to encourage longer-term contracts in a bid to help tenants.

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