Types of Property Tax
On acquiring and disposing of immovable property in Malta, any person, whether juridical or physical, is subject to taxation according to the Duty on Documents and Transfers Act, Chapter 364 of the Laws of Malta and the Income Tax Management Act, Chapter 372 of the Laws of Malta and the Income Tax Act, Chapter 123 of the Laws of Malta.
Taxes related to the acquisition of property
- 5% Duty on Documents calculated on the purchase price of the immovable property. (currently 2% for properties bought in Gozo until end 2019)
- If the Buyer is a European Union Citizen declaring on deed that he shall reside in the property being purchased as his sole ordinary residence, then the preferential rate of 3.5% is applied on the first €150,000 of the price.
- The First Time Buyers’ Scheme has been offered by the government of Malta until 31st December 2019.
Under the First Time Buyers’ Scheme, no tax is charged on the first €150,000 of the price of the property. This means that first-time buyers can save €5250. Buyers purchasing their first residential property will only pay 5% stamp duty on the balance above €150,000 of the price of the property.
No tax is charged on immovable property (furniture) within the purchase.
Taxes related to the sale of property
- one final withholding tax of 8% on the value of the property transferred.
There are two exceptions as follows:
- In the case of individuals who do not carry on the business of property trading, the applicable final withholding tax rate shall be 5% on the value of the property transferred if the property is transferred before five years from the date of its acquisition.
- In the case of properties acquired before the 1st January 2004 in respect of which a notice of a promise of sale or transfer relating to that property had not been given to the Commissioner before the 17th November, 2014, the applicable final withholding tax rate shall be 10% of the value of the property transferred.
It is very important to note that tax rates may vary from time to time and are subject to change and one must contact a notary of his choice, visit https://www.notariesofmalta.org/ , or contact us for the latest Tax rates and information.