A government scheme offering reduced tax rates on property transfers should be extended to January, the Nationalist Party's finance spokesperson has said, citing reports of a backlog in paperwork. 

Jerome Caruana Cilia said he had received feedback from bank officials, lawyers and notaries who said they needed more time to be able to finish the administrative part of the process, despite the deadline having been extended already from end of June. This seems to be due to various administrative backlogs, especially from the banks' side, he said.

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.

The scheme's deadline was already extended once, to the end of September. 

Caruana Cilia said the deadline ought to now be extended to the end of January 2023 at the very least.

When he announced the first scheme extension in March, Finance Minister Clyde Caruana had said the additional time was being provided on advice from notaries and banks, who needed more time for research on properties being bought and sold.

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.