Cost of property incentives since 2018 reaches €160 million

Malta’s property buyers have collectively saved a total of €160 million in taxes since 2018 under four schemes meant to help people get on the property ladder and incentivise the purchase of properties in certain areas.

In response to a number of parliamentary questions posed by Labour MP Chris Agius about the total amounts saved by house buyers due to tax reductions and exemptions for first- and second-time buyers and buyers of properties in Urban Conservation Areas (UCA) and in Gozo, Minister for Finance Clyde Caruana tabled a slew of figures that reveal the impact of these subsidies on the public purse.

The schemes offering exemptions from stamp duty, also known as tax of documents, for a set amount of the total purchase price. For example, for first-time buyers, the first €175,000 of the property’s price was exempt from stamp duty – an amount later revised upwards to €200,000.

Taking into account the total tax reduced from 2018 to the end of September 2023, the first-time buyers’ scheme cost €85 million, while incentives for the purchase of properties in Gozo cost €40 million

The UCA scheme saved buyers €32 million in taxes, while the second-time buyers’ scheme saved them €2.9 million.

The biggest savings were achieved in 2022, when property buyers saved a total of €43.6 million.

	First-time buyers	Second-time buyers	Urban Conservation Area	Gozo	*Total (year)*
	€	€	€	€	€
2018	9,141,655	685,813	2,735,642	4,203,845	16,766,956
2019	10,544,578	877,364	3,292,805	5,508,182	20,222,930
2020	12,604,972	666,073	1,167,873	5,403,673	19,842,593
2021	22,464,094	237,353	762,477.50	8,437,117	31,901,042
2022	20,441,667	175,325	12,206,634	10,819,612	43,643,238
2023*	9,766,624	273,157	11,817,051	5,564,816	27,421,648
Total (scheme)	84,963,593	2,915,086	31,982,484	39,937,246	*159,798,411*

*2023 until September

These figures seemingly do not take into account the major cuts in stamp duty in 2021, which formed a key pillar of the Government’s strategy to support the important real estate sector during the COVID-19 pandemic.

Tax on documents was estimated to bring €180 million into the Government’s coffers in 2022, meaning that the €43.6 million driven to subsidies the real estate market would have increased this line of revenue by close to 25 per cent.

Written by

Robert Fenech

Robert is curious about the connections that make the world work and takes a particular interest in the confluence of economy, environment and justice. He can also be found moonlighting as a butler for his big black cat.

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