The first €400,000 of a property’s value will continue to be subject to a lower rate of property tax until the end of the year, with the government having extended a measure first introduced last year.
The government would be extending it to promises of sale finalised by the end of December and with sale contracts due until June 2022.
The request to extend the incentive came from the Malta Developers Association, with Abela announcing it during a meeting he held with the developers’ lobby group.
First announced in June 2020, the measure allows property sellers to pay a reduced 5 per cent rate of property tax and buyers to pay a 1.5 per cent rate in stamp duty. The incentive was originally due to lapse at the end of July.
In the meeting, Abela said that he believed the development and environmental sectors could coexist in harmony and “complement one another”.
“Our economic vision foresees this sort of balance between the environment and development. What we achieved in energy, we must now achieve in construction.”
Finance Minister Clyde Caruana, Planning minister Aaron Farrugia, Infrastructure Minister Ian Borg and construction parliamentary secretary Chris Agius joined Abela for the meeting.
MDA president Sandro Chetcuti said that figures compiled by the association showed that the collective value of promises of sale had risen by €1.4 billion over the past year and that the construction sector had employed over 40,000 people.
“While we must work to address environmental challenges, we must understand that development contributes 11% added value to the economy, which the government can use to help other sectors,” he said.
He cited a study by auditing and consultancy firm KPMG, saying it had found that the prices of affordable property had not risen last year for the first time in seven years.
The President hailed their election as further strengthening of the Malta Chamber in the spirit of continuity of the Chamber’s sterling work over the last two years
Following the electoral process which took place at the end of March, The Malta Chamber’s newly elected Council convened for the first time on Tuesday the 30th to elect Ms Marisa Xuereb as President, to lead the organisation for the next two years.
Next was the establishment of the Board of Management, which is tasked with advising Council on policy matters and the administration of The Chamber.
Mr Christopher Vassallo Cesareo of Domestica Ltd. was elected Deputy President, while Ms Liz Barbaro Sant of Alberta Group and Mr Nicholas Xuereb of Toly Products Ltd. were elected Vice-Presidents.
Mr Norman Aquilina of Simonds Farsons Cisk plc, Mr Mark Bajada of Bajada New Energy Ltd. and Mr Ian Casolani of Belair Property were elected Officers on the Board of Management.
The President hailed their election as further strengthening of the Malta Chamber in the spirit of continuity of the Chamber’s sterling work over the last two years and the advancement of the Chamber’s economic vision for Malta in the recovery phase and beyond.
· With effect from 20 October 2020, first time buyers will be exempt from duty on the first €200,000, increased from €175,000.
· The rate of duty on the acquisition of residential properties shall be reduced to 3.5% on the first €200,000 for second time buyers.
· The rate of 3.5% shall also be applicable on the first €200,000 on inheritance of their own residential property.
· The duty free portion on the donation of property by parents to their children for the latter to use as their residence shall increase from €200,000 to €250,000. Amounts in excess of €250,000 shall be subject to duty at the rate of 3.5%.
· The reduced income tax and duty rates on the inter-vivos transfer of immovable property in Malta of 5% and 1.5% respectively for the first €400,000 will continue on promises of sale agreements registered by 31 March 2021 provided that the contract is entered into by 31 December 2021.
· During 2021, all profits derived from the assignment of rights on a promise of sale relating to immovable property will be taxed at a final tax rate of 15% increased from the first €100,000.
· Extension of emphyteusis on commercial properties will be possible to the extent that there will be investment on the property.
· A new Authority regulating the construction industry will be established as from 2022 with the primary aim to safeguard the local environment and reduce accidents on construction sites. This Authority will be responsible to issue the necessary regulations and standards required within this industry. Decisions may be contested with an independent tribunal to be set-up. A new Compensation Fund will also be formed to provide redress for any damages suffered as a result of any accidents.
It’s been 9 months now since the new Malta rent law came into effect, and I bet you are wondering what’s really changed.
Well! Here’s the lowdown:
All private residential lease contracts after the entry into force of the Act must be registered. This also applies to all renewals of existing lease contracts. All contracts of private residential leases which are not registered in accordance with the provisions of the Act shall be null and void. Lease agreements entered into after 1st June 1995 and which would be still in force on 1st Jan 2021 must also be registered.
It is the duty of the Lessor to register the contract with the Housing Authority within 10 days of the commencement of the lease and an administrative fee is to be paid. If the lessor fails to register the lease as required, the lessee shall have the right to register the contract himself and is entitled to claim the administrative fee. A separate application fee will be required for every registration.
The registration of the lease must include a declaration of the security deposit held by the lessor together with a presentation of an inventory.
In view of the UK’s withdrawal ( Brexit ) from the EU, UK nationals and their family members residing in Malta, shall continue to do so on the conditions provided for in the Withdrawal Agreement and national legislation.
In this regard, the Government of Malta has published a legal notice which regulates UK nationals’ residence status following the UK’s withdrawal from the EU.
UK nationals, who will be residing in Malta on the basis of their Treaty rights as EU nationals prior to or on the last day of the transition period, will be entitled to continue to reside in Malta and move freely in and out of the country, as well as other associated rights, as specified in the Agreement. The said rights also extend to family members, who fall under the provisions of the Withdrawal Agreement. However, family members, other than children, will only be covered by the provisions of this Agreement if their relationship would have commenced before the end of the transition period.
UK nationals settling in Malta during the transition period (between 1st February 2020 and 31st December 2020, unless the UK and EU agree to extend this period) may apply for their new residence status after three (3) months of their arrival in Malta and before 30th June 2021.
UK nationals and their family members who were not residing in Malta prior to the withdrawal date but will be arriving in the country by 31st December 2020 will also benefit from the rights provided for in the Withdrawal Agreement.
Applicants who have the right to commence residence after 31st December 2020 must submit their application either within three (3) months of their arrival in Malta or before 30th June 2021, whichever is later.
Identity Malta will be reaching out to all potential beneficiaries who have a valid residence document. The application process to change one’s status will be staggered and there will be no processing fees when applying for the new document. Applicants will be required to personally submit their application by calling at Identity Malta’s Expatriates Unit in Valley Road, Msida on the dates indicated in the letter they will be receiving. Applicants residing in Gozo would need to apply at the e-Residence Unit, St. Francis Square, Victoria, Gozo.
In this regard, a residence document valid for a period of 10 years will be issued to the said beneficiaries and will be automatically renewed on application, provided that the relative conditions remain satisfied.
The existing document shall continue to remain valid until the new residence document is issued.
UK nationals and their family members arriving in Malta during the transition period may set an appointment by email email@example.com subsequently submit their application in person at the Expatriates Unit EU Section, Valley Road, Msida, Floor 2.(Source: Identity Malta 31.01.2020)
A survey on the Maltese property market during Covid-19 shows that most people believe it will take over a year for the Maltese economy to recover and property prices will be affected.
Increased affordability is what property buyers and renters have to look forward to in the coming months, according to a new survey released by Belair Property together with Anchovy/Onest Data.
The survey was conducted between the 24th April and 5th May 2020, and it reveals insight into current and future perceptions of Maltese property in the context of the Covid-19 pandemic.
With over 1,000 respondents, including property owners, tenants, landlords and banks across Malta and Gozo, the survey presents views from a cross-section of the Maltese general public. The hope is that the survey’s powerful revelations can be used to take informed decisions in the property market in the months to come.
“This survey clearly shows a general – and justified – perception that especially in certain segments, the real estate market was overheated pre-Covid,” explains Ian Casolani, Managing Director of Belair Property, “The market needed to be more realistic, and we were in fact already seeing price corrections before the pandemic hit. What we’ll see now is the market continuing to settle.
“In certain sectors, property prices will continue to level out and become more affordable. An optimistic view would be that Covid-19 is correcting property prices, bringing them closer to a property’s real value. At the end of the day, the price of the property is what people are prepared to pay for it. This is why, when investing, we say it is all about ‘location, location, location’, because in top locations there is always healthy demand vs supply. As a result, these properties tend to keep their value, even when the rest are levelling out or, in some areas, dropping.”
With almost half of the survey’s respondents showing scepticism about the Maltese economy recovering in less than a year, this kind of affordability is at the forefront of strategic investment decisions in property. For example, the survey shows that a large portion (over 50 percent) of respondents would need to see a price drop of between 15 percent and 30 percent to be tempted to buy property, and 74 percent of landlords fear for the future of the rental market in Malta.
“Malta’s rate of recovery is evidently a debatable point, but it’s clear that people don’t expect it to be quick,” Casolani continues, “Due to redundancies in the service industries, many foreign workers left Malta during the pandemic, leaving rental properties empty. This has severely impacted the rental market. In addition, some landlords have generously reduced rents to help tenants through the crisis, and they’re keeping rents low to attract new tenants.
“The survey shows, however, that other landlords are willing to wait out this period of uncertainty rather than reduce their asking price, even though they believe that reducing their asking price would increase their rate of rental. All in all, I believe that as long as the Government takes the hard – but crucial – decisions needed to restore Malta’s credibility on all fronts, the coming year will be a good time for expats to return to the island. We’ll then see the levels of property rentals return to what we’re used to.”
The role played by banks in the property market has been a hot topic over recent months. The survey reveals that 68 percent of respondents feel their bank has not supported them enough during the crisis, and 43 percent believe banks should establish a Covid-19 credit policy.
“Banks have been helpful from the start of the pandemic by, for example, launching beneficial measures regarding mortgage repayments,” explains Edward Grech, a former banker and consultant, “However, given the responses to the survey, the message may not have come across to the general public. This may be because banks have been reluctant to reduce fees and interest further because, after all, that is a bank’s primary source of income.
“During the Covid-19 period, people have sought less help from banks. For example, requests for home loans have dropped by about 40 percent. The government’s incentives for first-time buyers and buyers for investment and rental purposes will likely see this downward trend reversed. But there remains a lot of uncertainty, as we can see from the survey’s results. That said, barring a second wave of the pandemic, I think we can expect people to return to work, foreign workers to come back to Malta, and the lettings market to start looking up.”
For a copy of the results from the ‘Maltese Property Market During Covid-19’ survey, click here or on tel. no: 2011 8000 for more information.
Malta International Airport reopened on July 1, 2020 and commercial flights to and from Malta resumed from that date.
Passengers arriving from the following countries do not have to do any quarantine and do not require any special permits:
United Arab Emirates
Any person coming from any other country and has not spent at least 14 days in one of the safe countries listed above needs a special permit from the Health Authorities before travelling to Malta and may be obliged to do quarantine in Malta if accepted by the Health Authorities.
The list of approved safe destinations is monitored regularly and may be reviewed if necessary.
1. A welcoming visit to Malta
The Maltese are renowned for their hospitality, friendliness and generosity. The people are traditionally kind-hearted and usually go out of their way to make guests feel at home. The majority of people are very accommodating, and are very willing to lend a helping hand, should you need directions or require assistance of any kind.
This characteristic is deep-rooted in Maltese culture and makes for a very warm and welcoming experience. Apart from personal experience, it’s something I hear those who travelled to Malta mention on a regular basis.
FLIGHT SCHEDULES Click herefor information about arrivals and departures to and from Malta International Airport.
TRAVELLING SAFELY In preparation for the resumption of commercial flights starting July 1st 2020, Malta International Airport has implemented various measures in order to maintain a safe environment for passengers and employees. For details https://www.maltairport.com/covid19/
Bank of Valletta is offering low interest rates for first-time and second-time buyers seeking to invest in property this summer.
The Bank’s home loan summer offers aim to help improve the affordability of properties, in the wake of COVID-19, BOV said in a statement
“Consumers seeking finance for their first or second home, or completion of their residential property, can benefit from very low interest rates and attractive loan terms,” said Marisa Said, Head Consumer Finance at Bank of Valletta, adding that these rates are “possibly” the lowest rate on the market.
“The property market is going through a consolidation process with indicators of a price correction taking place. Reduced property transfer tax and stamp duties as part of the Government’s Economic Regeneration Plan in relation to COVID-19, and more realistic property prices coupled with the lowest ever bank interest rates, have widened the door for first time buyers and those who may over the years had been sporadically thinking about purchasing their second property. These current times could very well present that lucrative opportunity for prospective buyers.”
To this end, BOV’s key home loan products have been revised “to meet changing consumer behaviour and needs” and to increase “affordability for home seekers to transition into home-owners,” Ms Said added.
For more information, interested parties are being invited to set up an appointment with a BOV home loan specialist by calling on +356 2131 2020, or sending an email to firstname.lastname@example.org
Offers are valid until 31st December 2020 but may close earlier at Bank’s discretion. All loans are subject to normal bank lending criteria, credit approval by the Bank and a credit agreement. Security may be requested including mortgage or other comparable security. The loan is to be secured by a first ranking hypothec and special privilege over the property being financed, a first ranking pledge over a life assurance policy covering the whole loan amount and a buildings insurance policy for the replacement cost of the property being financed. If repayments are not maintained, the bank may take steps to sell the property financed following legal proceedings and the borrower may lose the property. Further terms and conditions are available from www.bov.com. Issued by Bank of Valletta p.l.c., 58, Triq San Żakkarija, Il-Belt Valletta VLT 1130. Bank of Valletta p.l.c. is a public limited company regulated by the MFSA and is licensed to carry out the business of banking in terms of the Banking Act (Cap. 371 of the Laws of Malta).
NON-EU NATIONALS CAN NOW APPLY FOR LONG-TERM RESIDENT STATUS IN MALTA AND WILL NO LONGER REQUIRE AN AIP.
Third-Country Nationals (NON-EU citizens) who have been legally and continuously residing in Malta for five years may apply for the long-term residence status. The status of long-term residents is permanent and the residence permit would be issued for a period of five years.
WHAT DOES THIS MEAN IN RELATION TO PROPERTY PURCHASE?
Once an applicant is given Long-term residence status, the successful applicant will no longer require an AIP (Acquisition of Immovable property) in order to purchase a property. Moreover, there will no longer be restrictions as to owning only one property as was previously the case.
Successful applicants can now benefit from all the Government concessions which an EU member can benefit from in relation to reductions in stamp duty as well as property tax.
The applicant must submit the following documentary evidence in support of his request: Please click here to see required documentation.
New Immovable Property fiscal measures – June 2020
The government announced temporary fiscal incentives for both property buyers and sellers, as part of aCOVID-19economic recovery package. This is effective as of 9thJune 2020 until 1stApril 2021:
All final deeds signed during this period, whereby 8% or 10% final withholding tax was previously applicable, are now being reduced to 5% on the first €400,000 in value.(Legal notice 241/2020)
All finals deeds signed during this period, whereby a 5% stamp duty rate was previously applicable, are now being reduced to 1.5% on the first €400,000 in value. Schemes that are currently in existence, such as First Time Buyers and Urban Conservation Areas (UCA), can be used in conjunction with this rate of stamp duty.(Legal notice 240/2020)
These new measures apply to transfers of immovable property made on or after the 9thJune 2020, but before 1stApril 2021. These transfers will qualify for the reduced rates if the notice of the final deed of transfer is given to the Commissioner of Inland revenue by the 30thApril 2021.
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