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When selling a property in Malta the tax to be paid depends on two factors:
a) Whether the property qualifies as your sole or main residence:
When selling one’s sole or main residence that has been owned for a period of more than three years, no tax on Capital Gains is paid on the transfer of that property, as long as the sale is made within twelve months of the owner vacating the property.
b) Whether the property is an investment property
In the event that the property being transferred is an investment property and the above does not apply, than the tax to be paid is as follows:
As from the 1st January 2015, the final tax when selling a property will be reduced from 12% to 8% of the transfer value subject to the following exceptions:
· Transfers of immovable property acquired prior to 2004 will be subject to a final withholding tax of 10% of the sales value (down from 12%);
· Transfers of immovable property by non-property traders within the first five years of acquisition will be subject to a final withholding tax of 5% of the Sales Value;
Certain exemptions are available under the current tax system and these include exemptions:
· transfer of property between spouses following a separation or divorce;
· transfers of property between group companies.
In all cases where non-Maltese persons sell their property in Malta, the Notary public appointed by the parties to draw up the deed of sale is also required to notify the Commissioner of Inland Revenue in advance informing him that the property is to be sold and to establish whether or not any outstanding taxes are due by the non-resident. The Commissioner may impose conditions on the transfer to the extent that the tax that may be due on the sale of property or any other tax that may be due is paid and held at the point of property sale.
There is no restriction on the transfer of proceeds from the sale of the property outside of Malta, subject to the payment of any outstanding tax. No VAT is due on the transfer of property. There are no net worth, real estate tax or any local taxes in Malta
No death tax or duty is payable in Malta. However duty on documents and transfers is payable by the heirs of the deceased or the purchaser on real estate situated in Malta and upon purchase of shares in Malta companies. Certain exemptions do apply to shareholders having majority of their business interests outside of Malta. Save certain exemptions, duty is generally at a rate of 5% in the case of real estate and 2% in the case of shares.