The government grant for first-time buyers of vacant properties or properties in the village cores of Gozo will be bumped up from €30,000 to €40,000 as of next year, the finance minister announced during Monday’s budget speech.
First-time buyers who opt to purchase their home in Gozo in the urban conservation area (UCA) or a property that has been built for at least 20 years and has been vacant for at least the last seven years will be eligible for the grant.
It is part of the government’s recently-launched vision to transform Gozo into “an island of villages”, Clyde Caruana said on Monday.
Meanwhile, he also announced the government will stop a tax incentive that benefitted buyers of Gozo properties that lie outside the UCA.
The incentive allowed buyers to pay 2% stamp duty, instead of the regular 5%, when they purchase a property outside of the UCA in Gozo.
On Sunday, Times of Malta reported the stamp duty will go back up to 5% as it is in the rest of the country, and Caruana confirmed it in Monday’s budget speech.
Buyers who sign promises of sale by the end of the year will still benefit from the incentive, however.
Coupled together, the two moves could complement each other in providing a rare reprieve for an island that has been facing relentless construction projects in the last number of years, sparking protests among Gozitan residents and environmentalists.
Stamp duty reduction scheme extended
First-time buyers who purchase vacant or UCA properties in Malta will continue to receive a €15,000 grant, as they currently do.
Caruana also said the stamp duty reduction schemes for first-time and second-time buyers will be extended for another year.
The sale and purchase of properties in UCAs will remain tax-free.
Owners of properties in UCA and previously vacant properties don’t pay stamp duty and capital gains tax on the first €750,000 when selling and purchasing the property and that will be extended for another year, Caruana said.
He also said people who renovate such properties will continue to receive a grant on the value of the VAT paid up to a maximum of €54,000 for the first €300,000 spent on restoration and finishing.
During last year’s budget, first-time buyers also got a further €10,000 grant spread over 10 years to help repay their loan.
On Monday Caruana said around 2,600 couples and individuals benefitted from the scheme in its first year. The government gave them around €3 million in total and expects that amount to increase to €5.2 million next year.