Malta Property Tax – Explained
| Final Withholding tax of 8% on the value of the property transferred. | 8% |
| Exceptions to the general rule: | |
| 1. If the property is transferred before five (5) years from the date of its acquisition, the final withholding tax applicable would be 5%. The property must not form part of a project. | 5% |
| 2. Property acquired before 1st January 2004 and a promise of sale or transfer was not registered prior to 17th November 2014 – Final Withholding tax of 10%. | 10% |
| 3. Residential property sold within three (3) years of acquisition – final withholding tax of 2% | 2% |
| 4. Residential property sold after 3 years of acquisition and sold within 1 year after vacating the property – exempt from tax. | 0% |
| 5. Donation of immovable property to spouse/descendants and/or ascendants | 0% |
| 6. Assignment of property upon separation/divorce exempt from tax. | 0% |
| 7. Cause Mortis: Capital gains tax on the sale of the property acquired through inheritance (Causa Mortis) is charged at the rate of 12% on the difference between the transfer value and the acquisition value as declared in the deed of Causa Mortis | 12% |
| 8. If the property was inherited before the 25th November 1992, the rate of tax will be equivalent to 7% of the transfer value. | 7% |
| All transfers of immovable property, are subject to a property transfer tax of 8% or 10% of the transfer value. | |
| Due to the Covid-19 pandemic the government introduced a number of tax relief measures pertaining to the property market in 2020 that saw a temporary reduction in transfer tax for all immovable property occurring between 9th June 2020 and 1st April 2021, and registered by 30 April 2021. Rather than the normal property transfer tax of 8% or 10% of the transfer value, the temporary relive measures will see a reduced property transfer tax of 5% for the first €400,000 of transfer value. | |
| This relief measure has now been extended and will apply to all property where the registration date of the final deed takes place before the end of September 2022. It is important to note that any transfer over and above a value of €400,000 will be subject to the normal property transfer tax of 8% or 10% (as applicable). | |
| Malta Stamp Duty | |
| Stamp duty calculated at 5% on the value of the consideration for the transfer of the immovable property. | 5% |
| Exceptions/different rates | |
| 1. A property purchased as a primary and sole residence, then a special rate of 3.5% is charged on the first €150,000 and 5% on the excess | 3.5% |
| 2. Government scheme for first-time-buyers who are buying a property as their sole residence. In such cases no tax whatsoever is levied on the first €150,000 of the purchase price whilst charged 5% on the excess | 5% |
| 3. Assignment of immovable property between spouses who are married or formerly married is exempt from duty. | 0% |
| 4. Individuals who buy residential property in Gozo will benefit from a reduced stamp duty rate – 2% | 2% |
| As with the reduced transfer tax measures introduced in 2020 the Malta Government also slashed the property stamp duty as part of their post Covid-19 recovery plan. The temporary reduction in stamp duty on all transfers of immovable property occurring between 9th June 2020 and 1st April 2021 whilst also registered by 31st April 2021 whereby stamp duty will be calculated at €1.50 per €100 of value on the first €400,000 of value anything over and above €400,000 will be subject to the normal rate of 5% stamp duty. | |
| This relief measure has also been extended and will apply to all property where the registration date of the final deed takes place before the end of September 2022. | |
| Furthermore, the legal notice 490 of 2021 enacted on the 24th of December 2021 will see Subsidiary Legislation 123. 198 enacted on 12 May 2020 entitled – Assignments of Rights acquired under a Promise of Sale Rules wherein the consideration for an assignment to which the rules apply does not exceed one-hundred thousand euro (€100,000), the income derived from that assignment, computed in accordance with rule 4, is |
