Talks are currently underway for amendments to the tax exemption on traditional properties, with the updated legal notice expected to be published in the coming weeks, sources close to the discussion said.
First introduced during Minister for Finance Clyde Caruana’s Budget 2022 speech in October, the measure removes stamp duty and capital gains tax on the transfer of old and vacant properties and those found in an Urban Conservation Zone (UCA) on up to €750,000 of the property price.
However, the legal notice on the exemption was found to have “serious shortcomings” by the Notarial Council, which on 1st December issued a directive to its members to continue applying previous tax rates for final deeds of sale signed until clarifications are issued by the Government.
“This is to ensure that notaries remain in a position to direct parties in a precise manner, without either party to the contract or the notary themselves being subject to penalties due to serious shortcomings in the scheme’s implementation, and to guarantee legal certainty at all times,” it said at the time.
The Notarial Council pointed out that the way the current legal notice is phrased could result in penalties or additional tax due also in future transfers, for which the parties to the contract, along with the notary, remain responsible.
“This is due to a lack of clarity in the legal notice on how the scheme would operate and the eventual repercussions on future transfers.”
Clarifications are currently being discussed during meetings between the Ministry for Finance, the Commissioner for Revenue, and the Notarial Council.
Contacted by BusinessNow.mt, Notarial Council President Clinton Bellizzi said that the amendments will “ensure legal certainty and the effective use of the law”, although he refrained from going into further detail.
Questions sent to the Ministry for Finance were not replied to by the time of publication.
Despite the controversy, the Malta Developers Association stated that it fully supports the exemption as it currently stands, saying that clause 6.3 of Legal Notice 461/21, which stipulates the penalty for breach of the conditions of the tax exemption are “the only way to guarantee a level playing field for those working in property in development”.
The clause states that the incentive may be forfeited if the property is demolished or split into more units than it had at the time of sale. Forfeit would mean that the total of the amount of unpaid taxes (due to the exemption) would become payable.
Since its inception, the Family Business Office has been instrumental in highlighting the needs of family-run enterprises in Malta.
Seat Load Factor also stood strong during the period, with an increase of 6.8% when compared to 2019
During the last few months, Enemalta continued its efforts as part of its six-year plan