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Property Related Measures – Malta Budget 2021 Highlights

The section of the annual government budget related to fiscal measures applicable to the Property Sector, is always highly anticipated by operators in the sector and also by potential customers. These are the relevant highlights:
Authority Regulating the Sector
A new Authority regulating the construction industry will be set up as from 2022, with the aim to safeguard health and safety, the local environment and to issue necessary standards and regulations governing this vibrant industry.
Compensation Fund
A Compensation Fund will be set up to provide redress for damages suffered by third parties.
New or Improved Schemes
• The duty-free portion on a donation of property by parents to their children for residential purposes has been increased to cover values up to €250,000
• The first €200,000 in inheritance of residential property will now be subject to the reduced tax rate of 3.5%
• The value of property exempted from tax for first time buyers has been increased from €175,000 to €200,000 thus capturing a wider audience for this particular tax incentive
Extension of Schemes
The reduction of duty on inter-vivos transfers of immoveable property from 5% to 1.5% for the first €400,000 will be renewed on promises of sale agreements registered by 31 March 2021 provided the contract is entered into by the end of 2021
For further information visit our Budget 2021 blogposts on

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A record of €2.25 billion in EU funding over the 2021-2027 period for Malta

Following the closure of the negotiations at the EU Council of last weekend, Malta is set to receive €2.25 billion in EU funding over the 2021-2027 budgetary period.

Malta’s allocation from the EU’s core budget – its multiannual financial framework (MFF) amounts to €1.9 billion with the remaining €327m granted as part of a coronavirus stimulus package.

The first graph below shows how the EU funding for this period compares with the previous funding round. The Covid-19 recovery instrument and recovery and resilience of the single market are two new sources of funding for EU countries.

The second graph outlines that funding under the migration, borders, security, education, and fisheries increased by 130%, research, innovation & environment by 72%, funds for agriculture by 38% and the Cohesion funds by 20%. The post-coronavirus stimulus package also affected some of the above increases. The EU also allocated €386m to the European Asylum Support Office which is Malta-based.

Mini Budget 2020 – Benefits for Households and Individuals
The Mini Budget 2020 announced on 8 June 2020, by Malta’s Prime Minister Dr Robert Abela and Minister of Finance Profs Scicluna contained various measures to assist households in this post-covid-19 scenario. These are some of the measures:
Personal Vouchers
All persons over the age of 16 will be given €100 in 5 vouchers of €20 of these, €80 are
redeemable in bars and restaurants and €20 in retail excluding supermarkets.

Tax Refunds
A cheque with tax refunds will be sent in the coming days to 210,000 employees, who worked in 2018. An average family where both parents work will receive up to €328.
Property
Taxation on buying or selling of property will be reduced even for those who have already signed a promise of sale. This will be extended till March 2021. Stamp duty for properties costing less than €400k will be reduced from 5% to 1.5% on contracts to be signed between June 9 and March 31 of next year.
Weddings
Couples who had to postpone their wedding will be eligible for a refund of €2,000.
In-work benefit
Families will receive a down payment of €250 each. The families who are eligible for the benefit will be expanded. The sum received per child will be increased.