Whether or not the war on COVID is over is up for debate, but now’s the time to move ahead. And the Maltese government has kicked our post-COVID existence into high gear.
On 8 June 2020, the government unveiled its Economic Regeneration Plan. The policy is estimated to be worth €900 million – a steadfast stride towards relaunching Malta’s economy. The plan is replete with actions and initiatives to get residents in Malta and Gozo prepared for the new norm.
Real estate features prominently. The economic impact of the pandemic on people’s lives has been significant. And, keeping up with rent payments and the affordability of property have been hot topics of conversation. The Economic Regeneration Plan has targeted these issues in the real estate sector to some degree.
Here, we guide you through how Malta’s Economic Regeneration Plan impacts all things real estate in Malta and Gozo.
1. Rental expenses
If you own a business which relies on rental property for its operation, you’ll be able to apply for a grant of up to €2,500 to cover your rent in July, August, and September 2020.
Terms and conditions apply, of course. Most importantly: This subsidy is only open to businesses that were entitled to the COVID wage supplement.
Covering rent over the summer months is intended to give businesses, particularly in the tourism, hospitality, and entertainment sectors, a chance to catch up. Tourism is expected to be on the rise again once Malta’s airport re-opens its doors on 1 July. So, the rent subsidy will cover expenses while businesses slowly return to some kind of normality.
The rent subsidy is no minor promise. It is expected to be costing the Maltese government in the region of €50 million.
2. Buying and selling property
When the coronavirus hit Malta back in March, almost all aspects of life were put on hold – or, at the very least, significantly impacted in some way. The buying and selling of property was no exception.
Malta’s Economic Regeneration Plan acknowledges that the post-COVID real estate landscape is distinctly different from the pre-Covid market context.
The policy will see a chance for affordability to recover. Taxation on the buying and selling of property will be reduced until March 2021. What’s more, even if you’ve already signed a promise of sale, this tax reduction applies to you.
In a nutshell, for properties with a value below €400,000 (or for the first €400,000 of value):
- Stamp duty will be reduced from 5% to 1.5%.
- For sellers, income tax on the sale of property will be reduced from 8% to 5%.
Expected to be costing the government €32 million, this is a significant step.
With other policies covering stamp duty exemptions and reduced tax rates already out there, we’re still waiting for more information on how the new rates will complement already-existing policies.
The Home Deposit Scheme comes to mind. This was launched on 3 June 2020. It is a government loan covering the 10% deposit payable upon signing a promise-of-sale agreement. The government loan is available to eligible first-time buyers, aged below 40, and it is repayable over 25 years.
Whether or not the Economic Regeneration Plan will impact the new Home Deposit Scheme is still to be determined. But, for now, the further tax reductions are undoubtedly positive news.
3. First-time buyers
Besides Malta’s Economic Regeneration Plan, this is an excellent time to be a first-time buyer in Malta. If you’ve had your eye on a new flat or house but are unsure about whether or not to go ahead, this could be the right time.
Prospective homeowners – listen up. If you previously didn’t qualify for the first-time buyers’ scheme because you’re already a part-owner of another property or a garage owner, you can now re-apply for the initiative. Luckily, the rules have been amended, and you’ll now qualify as a first-time buyer.
This change combined with the new Home Deposit Scheme and the Economic Regeneration Plan make it an opportune moment to invest in your first home in Malta or Gozo.
At RE/MAX, we’re glad to see that real estate measures have formed part of Malta’s Economic Regeneration Plan.
Both business and personal lives stalled over recent months. And the stress of not knowing what to expect out of the future has taken its toll. Whether it’s your office space or your home, our lives depend entirely on being able to afford our properties. The good news is that things are now on the up, and governmental support is being rolled out.
Our sales associates are keeping themselves up to speed on all the latest financial incentives. So, if you’ve spotted your dream home, the property’s agent will be able to tell you exactly what financial help is open to you.
Are you a prospective property buyer or seller in Malta or Gozo? Speak to a member of the RE/MAX team today to hear about the financial measures you could benefit from.