Following the release of the Government’s Budget, which was presented to Parliament by Finance Minister Hon. Edward Scicluna on Monday, 4th November 2013, RE/MAX Malta would like to provide you with the highlights that may, directly or indirectly, affect the Malta real estate market.
The most notable of the measures mentioned by Hon. Edward Scicluna was that in relation to First Time Buyers. Originally, those purchasing an immovable property with the intention of using it as their primary residence had to pay stamp duty as follows:
- 3.5% on the first €150,000; and
- 5% on the remaining balance
The good news for First Time Buyer is that, following the Budget Speech for 2014, there is no longer any stamp duty to be paid on the first €150,000. This allows for a maximum saving of €5,250. This measure is only applicable on any contract (not Promise of Sale) to be signed throughout 2014.
At the same time, tax authorities will be accepting evaluations prepared by private architects rather than sending government appointed architects. As always, measures will be in place to prevent abuse in this respect.
For those who have invested in property with the purpose of renting it out, the government is offering landlords the option of paying 15% on gross rental income. This has been done in an effort to regularise the rental market. The government has made it clear that there will be zero tolerance towards tax evasion and, in an effort to curb abuse, will be taxing any undeclared rental income at 35%, plus penalties and fines.
Any home owner will be happy to hear that their water and electricity bills will be decreasing. The price of electricity is to be reduced by an average of 25%, whereas the price of water is to be reduced by an average of 5%. These changes will be implemented as from March 2014.
Other changes also include:
- Anyone earning an income between €19,501 and €60,000 will now be taxed at 29% (starting from January 2014) instead of the current 32%;
- The Cost of Living Adjustment will be €3.49 per week;
- The price of Portland cement (excluding white cement) has increased from €17 per 1000kg to €27 per 1000kg;
- The removal of duty payable on bona fida transmissions causa mortis where the transferee is a person with a disability.
If you’re looking to buy, sell or rent property in Malta, be sure to speak to a reputable real estate agent in Malta. Our team is the largest real estate team in Malta, comprising of no less than 120 sales associates and 25 letting agents. We ensure that our team are kept updated with any developments in the real estate market – such as this.