“It would be wise to extend the tax scheme further as everybody is fully aware that the COVID-19 pandemic is far from over yet,” said the Malta Developers Association (MDA) on Friday.
This comes as some components of the scheme, including the reduced stamp duty rate, and the reduced property transfer tax, are due to expire to new registrations by 31st March 2021.
With regards to the stamp duty reduction, which was introduced as a part of the Government Economic Regeneration Plan, the rate of stamp duty on property purchases fell from five per cent to 1.5 per cent on the first €400,000 of property value and from eight per cent to five per cent on those selling property.
In comments to BusinessNow.mt, the MDA proclaimed the success of its tax incentive scheme, saying it has “managed to pump into Malta’s economy more than €3 billion in property sales, leaving into public coffers hundreds of millions in taxes.”
The MDA believes that it would be economically beneficial to extend the scheme, saying that tax funds generated by real estate sales “were then used to support other industries that were severely hit by the pandemic”.
Indeed, it seems property sales in 2020 were healthy, despite the overall economic contraction caused by COVID. The €3 billion generated in 2020 matches results obtained in 2019, as announced by the MDA.
Promise of sale agreements were up in 2020, with 13,867 agreements registered – 624 more than were in 2019.
The MDA confirmed that it “will remain focused on putting forward concrete ideas, incentives and proposals that reap fruit for Government’s consideration.”
The Association also reaffirmed the strength of the housing markets, saying “time and time again, property has proved to be one of the best investment options to invest in.”
“Apart from being an excellent investment opportunity, during the COVID-19 pandemic, property also has a crucial role in that one’s property is the place where one spends the majority of his or her time,” it commented.
The MDA dismissed suggestions that Government measures would harm the market by artificially inflating prices, pointing out that “the property market is subject to market equilibrium dynamics which balance out supply, demand and price.”
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