Updated - The government will be waiving tax on dividends from investment on the Malta Stock Exchange.
Presenting the 2017 Budget, Finance Minister Edward Scicluna said that for next year only, the government will be facilitating the transfer of family businesses from parents to their children by reducing the tax on such a transfer to 1.5 per cent from the current five per cent.
He said that the €5,000 tax concession granted to property first-time buyers will be retained for another year. Furthermore, tax incentives will be given to those who buy a property in an urban conservation area which needs restoration. Benefits could reach up to €100,000.
Also from next year, all property bought in Gozo will be taxed at two per cent, instead of five per cent. This will apply for those who enter into a promise of sale agreement next year and conclude a contract in 2018.
All rental contracts will also have to be registered with the government although tax on rental income will remain untouched at 15 per cent.
Subsidy on rents to double
Government subsidies will double for those on a low-income people provided they produce their rental contract. This would help expose who are renting out their properties under the tax radar. The new subsidy will reach between €66.67 and €83.33 according to the income and size of the household.
The means testing for eligibility to this subsidy is also being reviewed. At present applicants cannot have more than €10,000 in the bank to qualify, but this will practically double under new measures.
Social housing rents revised
The Finance Minister also announced that increases in social housing rents will be revoked, so that rents will return to the levels they were in 2013. The amounts paid extra will be refunded.
The government will also introduce a pilot project for 100 tenants whereby landlords who enter into a seven-year fixed rate rental agreement with low-income tenants will have the tax on rental income reduced to five per cent from 15 per cent.
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