Malta’s estate agents gear up for a sea change next year with new regulations mandating their registration with the Government and increased responsibility for anti-money laundering scrutiny of the deals they conduct in the context of a bumper year for the sector, with record high property sales registered month after month.
The islands’ construction sector has meanwhile avoided tight regulation even as calls for stricter oversight reached fever pitch, with accidents being a common feature of an industry that has seen large changes over recent years, with migrant labour now a central feature of the industry.
Recently, Minister for Finance and Employment Clyde Caruana said that Malta must shift its dependency on the sectors often called “the motor of economy”, with Prime Minister Robert Abela wading in to reassure stakeholders that Minister Caruana “never said we should stop construction”.
Here are the measures relating to these sectors in the Government Budget for 2022:
Extension of the Equity Sharing Plus scheme
The Equity Sharing scheme, through which the Housing Authority has been instrumental in increasing access to the market among low and middle income categories, with the Government sharing 50 per cent of the equity of people above 40, will be extended to cover people over 30. This will increase their access to the property market by becoming homeowners. In the meantime, other schemes to help young people become homeowners will remain open, such as the assistance with the 10 per cent deposit payment.
The Home Assist scheme will also remain open to people and low-income couples so that they manage to take out a bank loan.
To offer more possibilities and different paths to a couple to buy its property, the Government will explore the possibility to create a fund with advantageous rates and lighter payment terms for those low-income couples.
Deduction in tax on the sale and purchase of the property which was rented at affordable rates
The Government will cut stamp duty by half for the purchase or sale of property, up to the first €200,000, that has been rented for not less than ten years to tenants who are eligible for rent benefit, at affordable rates issued by the Housing Authority. If it is sold to the existing tenant, no tax is paid on sales and purchases.
For those properties that have been rented at affordable rates for primary residential use to tenants for less than a decade but more than three years,, the tax on sales and purchases will be reduced by half.
New Hope Guarantee
The Housing Authority, through a “back-to-back guarantee of €3 million” from the National Social and Development Fund (NDSF), is offering an alternative to the life insurance policy to persons who due to medical conditions suffered in the past or a disability they live with, were not being given such a policy and therefore could not become homeowners.
Removal of stamp duty and capital gains tax on certain properties
For properties that have been built for over 20 years and are vacant for more than seven years, for properties that are in UCA, and for those new properties that are built in a style typical of traditional Maltese architecture, capital gains tax and stamp duty on the first €750,000 of the property price will be removed in its entirety.
This measure also applies to those who currently have a promise of sale and have not yet closed the contract.
In addition, first time buyers of these properties will receive a grant of €15,000.
First-time buyers who buy the types of properties mentioned above in Gozo will receive a double value grant of €30,000.
From tomorrow, those who will buy or already have these types of properties will also be awarded a grant on the value of VAT paid up to a maximum of €54,000 above the first €300,000 in restoration and refining costs, acknowledging that regeneration of these types of properties costs more than the average. This also applies to anyone who has already bought property and is undergoing restoration.
So that these measures do not have a speculative element, and are really enjoyed by families, a number of rules will be introduced, including curbs on the division of the property.
Confirmation of industry self-regulation
“The industry agrees to licensing building contractors. I think that this is an important step, if it is serious and not afraid to enforce, and I believe this license should have a tough hand on who abuses.
“This license can be a certificate of quality, and the Government is willing to consider incentives for them,” Minister Caruana said.
Construction Project Managers
The Building and Construction Agency Authority will promote legislation on the role of the Construction Project Manager on the site, to enforce the Building Codes expected to be unveiled next year regarding demolition, excavation and building, which will pay particular attention to the rights of third parties.
Next year a Bill will be filed regarding what is called ‘Document F’ that an architect uses to prepare building envelope plans, on the basis of which the engineer would prepare the building services plan. Once the bill is approved, this will lead to buildings wasting less energy.
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