by admin 
When buying or selling a property in Malta, both the buyer and the seller could be liable to pay some form of tax.
You can be forgiven for being confused on what tax is due when buying or selling a property in Malta, and when it is paid, as the tax rates have changed a few times over the years. More recently many discounts and exemptions have also been granted to incentivize the selling and buying of property in Malta.
Below is a list of taxes and stamp duty payable on the transfer of property in Malta. We tried to check and update all the information however please let us know if you find any inaccuracies or omissions in this article and we will update the details as necessary.
Stamp Duty:
Duty (also sometimes referred to as stamp duty or ‘boll’ in Maltese), is a tax you pay when an immovable property is transferred. This duty, usually paid by the purchaser, is a percentage of the price of the property excluding the furniture and fittings. The property extends also to the garden that forms part of this dwelling. It will also include any garage attached to or underlying such residence or a garage situated in the same block of residential apartments of which the residence forms part. It can also include any garage of not more than 30sqm situated within 500m of such residence or block of apartments. This garage and land/garden has to be included in the same deed of the purchase.
The default rate is 5%
Where 1% of the price is due when registering the promise of sale or 20% of the tax due on discounted rates – [refundable if deed is not done]
Discounts available 2022/2023
The Covid 19 regeneration scheme stated that only 1.5% duty was due on the first €400,000 of the purchase price. This discount was extended for contracts signed by June 2023, but PROVIDED THAT the promise of sale was registered before the 31st December 2021.
- EU citizens who purchase property as their sole ordinary residence normally had paid duty on the first €200,000 of the purchase price charged at the rate of 3.5% with the balance above the first €200,000 charged at the rate of 5%. Exemptions announced in the 2022/2023 budget means that there is 0% stamp duty is charged on the first €200,000 (a potential saving of €7,000) for first time buyers.
- For second time buyers 0% stamp duty is charged on the first €86,000 of the purchase price. (refund given after contract)
- 0% stamp duty on the first €150,000 in the case of purchasers with a disability or their guardians. (refund given after contract)
- For property purchased in Gozo, the stamp duty rate was reduced to 2%.
- Exemption of duty on the first €750,000 for properties in UCA’s (Urban Conservation Areas)
- Exemption of duty on the first €750,000 for properties older than 20 years which have been vacant for the past 7 years.
- Exemption of duty on the first €750,000 for other traditional Maltese properties which will pass inspection by a purposely set up board.
When exchanging properties the exchange is deemed as one transfer therefore duty on documents is paid on the higher resulting tax and is paid in equal shares between the parties.
Exemption of duty on the transfer of documents
- Sale of ½ property from one unmarried partner to another (sole ordinary residence)
- Termination of Community of Acquests
- Donation to Descendants in Direct Line
- Trusts and exchange between the same group of companies
- Partitions of co-owned property
- Disabled persons.
Income Tax
The default Income tax rate is at 8%
Discounts Available 2022/2023
The Covid-19 Rate was reduced to 5% on the first €400,000 for contracts signed by June 2023, but PROVIDED THAT the promise of sale was registered by the 31st December 2021.
Exceptions to 8% Tax Rule:
- Vendors pay 0% of the sale price when property was their main residence for at least the last 3 years before selling.
- Vendors pay 10% of sale price when property was acquired pre January 2004.
- Vendors pay 5% when selling within 5 years and property not part of a project.
- Vendors pay 5% when property is located in Valletta restored/rehabilitated according to Mepa, and acquired before 31/12/2018, selling within 5 years from that date.
- Vendors pay 5% when property is in an urban conservation area, vendor rehabilitated and restored according to MEPA *(further reductions are due since budget 22/23).
- Vendors pay 2% when the property was acquired to establish residence and sold within 3 years provided that the property is not part of project and that vendor does not own any other residential property.
- Vendors pay 2% for a residential property sold in Gozo. For the transfer of land, the benefit would only apply if one residential unit is to be built thereon.
- For Property acquired by Succession pre 24.11.1992, vendors are liable to 7% Final Withholding Tax. Property acquired post 25.11.1992, vendors are liable to 12% on the difference of the sale price and the value declared on the ‘causa mortis’ declaration
- Property acquired by Donation, vendors are liable to 5% Final Withholding Tax [if part of a project 8%] if selling within 5 years. Vendors are liable to 12% tax on the difference of the sale price and the value declared on the donation deed when selling the property more than 5 years after acquiring it.
- When 2 or more parties exchange immovable property, they are deemed as 2 separate sales, and therefore if any tax is due, it is paid by both parties on the value they receive.
- When transferring your Assignment of Rights the tax the tax due is at the rate of 15% on the first €100,000 consideration of the assignment. As per 2020 budgetary measures, the tax at the rate of 15% will be on the whole consideration of the assignment up until the end of 2022.
Exemptions/discounts on Final Withholding Tax announced in the 2022/2023 budget
Final Withholding Tax for buyers and vendors respectively, will be waived on the first €750,000
- If the property purchased was built more than 20 years ago and has been vacant for at least seven years:
- If the property is situated within an Urban Conservation Area (UCA)
- If the property has been recently constructed to reflect traditional Maltese architecture and design.
Disclaimer: The author assumes no responsibility or liability for any errors or omissions in the content of this article which may have also changed over time. It is always advisable to contact your Notary to confirm or update you with any information you require.
