1. Tax on property transfers

2. duty on documents
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3. Inter vivos transfers
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4. The normal rate of duty due by the Transferee is 5%
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5. Exceptions and exemptions:
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6. Sole ordinary residence
Duty at the rate of 3.5% on the first €150,000 of the Value if:
The Purchaser does not require an AIP permit to acquire
The Purchaser is an EU Citizen
Declares on the deed that he shall reside in the property being purchased as his Sole Ordinary Residence
Purchaser does not own another residential property
Duty at the rate of 5% on the excess
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7. First time buyer
No Duty is payable on the first €150,000 of the Purchaser Price if:
A Purchaser is acquiring his Sole Ordinary Residence (As per previous slide)
It is the FIRST Property acquired inter vivos by the Purchaser
The Promise of Sale was signed after the 31st July 2013
Duty at the rate of 5% on the excess
(Presently applicable for transfers prior to the 1st January 2017)
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8. What qualifies as the sole ordinary residence?
It is the place where an individual will reside and establish as his centre of affairs – ‘A dwelling house which is the only or main residence of a person’
It shall also include:
A garage attached to or underlying such residence or a garage situated in the same block of residential apartments of which the residence forms part or a garage of not more than 30 s.m situated within 500m of such residence or block of apartments, where such garage has been acquired together with such residence on the SAME DEED;
Land which the owner has for his own occupation and enjoyment with that residence as its garden or grounds consisting of an area which, regard being had to the size and character of the dwelling house, is required for the reasonable enjoyment of it as a residence
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9. Donation
No tax is due on the first €200,000 and the rest is charged duty at 3.5%
Conditions:
Donation to descendants in the direct line
Descendant acquiring with the intention to establish therein the Sole Ordinary Residence
The first such transfer between the parties
NB: if the acquirer transfers property gratuitously within 5 years, he must refund the ‘unpaid’ duty
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10. Donation continued
In the case of a transfer by donation by a person to his spouse, descendants and ascendants in the direct line and their relative spouses, or in the absence of descendants to his brothers or sisters and their descendants, who acquire such property for the purpose of establishing therein or constructing thereon their sole, ordinary residence, the value of the land is reduced to 80% of the market value of the land so transferred together with the (100%) cost to make the improvements thereon in the state that they are on the date of transfer, if any.
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11. Exchange A deed of echange is deemed to be one transfer
Duty is payable on the highest resulting tax
EX: One property is valued at €10,000 and the other is €12,000. Duty at 5% is paid on the higher value (€12,000) and the duty is paid in equal shares by both parties
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12. Division / partition
Duty is paid on the excess (ekwiparazzjoni), if any excess is paid
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13. Urban Conservation Area
Duty is payable at 2.5% on the Value of the property
Conditions:
Transfer made between and before
Transferee does not need an AIP permit
Property declared to be situated in a UCA
First relief being granted under the scheme
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14. Transfers which are exempt
The assignment of immovable property between persons who are married or who were formerly married to each other, after a consensual or judicial separation or a divorce between such persons, OR
On the dissolution of the Community of Acquests existing between spouses
Or on any partition of any property held in common between spouses, being community property or otherwise on the death of one spouse between the surviving spouse and the heirs of the deceased spouse
The assignment of immovable property between spouses, consequent to a consensual or judicial separation, shall also include any immovable property owned by a company which is fully owned by any or both spouses.
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15. More Exemptions
Deeds of division of property where the property so divided came from any inheritance
Deeds of partition where no owelty (consideration) is paid
The transfer of a share by one co-owner to the other co-owner of a property that was acquired by them with the intention to establish therein their sole ordinary residence
Where the Commissioner issues a certificate attesting that a property is being transferred within the same group of companies.
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16. Causa mortis transfers
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17. The normal rate of duty due by the Transferee is 5%
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18. Exceptions and exemptions:
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19. Dwelling house of the deceased
No duty is due when:
The property is a dwelling house, being the ordinary residence of the decuius
The beneficiary of such residence is the surviving spouse
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20. Dwelling house of the deceased continued
No duty is due when:
The property transferred causa mortis consists of a dwelling house or a part thereof, or of any real right over a dwelling house;
The property is transferred by the person from whom the transfer causa mortis originates to his descendants in the direct line;
The said dwelling house was, at the time of the transfer, and during the whole period of three years preceding the transfer, the ordinary residence of the person from whom the transfer originates
N.B The Causa Mortis Declaration must be done within one year from the date of death of the decuius
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21. Dwelling house of the deceased continued
If the property is the dwelling house of the Deceased:
no account shall be taken of the first €35,000 of the value of the house, being the ordinary residence of the decuius
If the property is the dwelling house of the Deceased AND of the transferee:
The first €35,000 is exempt
The second €35,000 is charged duty at 3.5%
Duty at 5% on the rest
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22. Dwelling house of the Transferee
When the house serves as the dwelling house of the transferee ONLY
The first €70,000 are charged duty at 3.5%
The rest of the value is charged at 5%
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23. Property inherited by person with disability
No duty is due when:
The property transferred causa mortis consists of any immovable or any real right over an immovable;
The transferee causa mortis is a person who is on the Register of Persons with Disability kept by the National Commission Persons with Disability set up in terms of the Equal Opportunities (Persons with Disability) Act, and identifies himself as such on the declaration of the relative transfer causa mortis by means of an identity card issued by the said Commission;
the person from whom the transfer causa mortis originates is the parent or the legal guardian of the said transferee causa mortis;
N.B The Causa Mortis Declaration must be done within one year from the date of death of the decuius
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24. rebate A rebate of €250 per transferee applies if:
The Causa Mortis is done within 6 months from date of death
Duty due is less than €2,300 for that transferee
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25. The vendor – property transfer tax
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26. The normal rate of tax due by the Vendor is 8%
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27. Exceptions and exemptions:
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28. 5% Tax Rate Transfer made after 1.1.2015
Property not part of a project
Selling Property within 5 years from the date of acquisition
N.B Does not apply if:
Last transfer was an inter-company transfer
Within the 5 year period the property was owned by a person related to the transferor and the property at that time formed part of a project.
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29. 5% Tax Rate Transfer after 1.1.2015 Property situated in Valletta
Acquired prior to
Restored and rehabilitated after the date of acquisition in accordance with the planning permit
MEPA certificate stating that property is refurbished according to permits issued and works carried out before 31/12/2018
Selling this property not later than 5 years from
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30. 10% tax rate Property acquired prior to 01.01.2004
N.B if the Promise of Sale was registered before , the old 12% will apply
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31. 2% Tax Rate Transfer made after 1.1.2015
The property was immediately before the transfer co-owned by 2 individuals
Declared that it is their Sole Ordinary Residence on the Deed of Acquisition
They are selling within 3 years from the date of acquisition.
No other property in their name
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32. Property acquired by Causa mortis and donation
Selling property that was acquired by Causa Mortis:
Pre – 7% Final Witholding tax on the whole sale price
Post – 12% of the difference between the sale price and the value declared on Causa Mortis
Selling property that was acquired by Donation:
Selling within 5 years of acquisition – 5% of the sale price (N.B if property is part of a project, 8% applies)
Selling after 5 years of acquisition - 12% of the difference between the sale price and the value declared on Donation
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33. Exchange Deemed to be two separate sales
Property Transfer Tax is paid by both parties on the value of the property they transfer
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34. Partition / division No tax if no payment (ekwiparazzjoni) is made
If there is payment (ekwiparazzjoni), tax is paid on that amount, by the person who received the sum
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35. Property not forming part of a project or SDA
Source:
Property not forming part of a project or SDA
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36. Projects and special designated areas
If Promise of Sale is registered after :
10% Tax if property was acquired before
8% Tax in all other cases
If Promise of Sale was registered before
12% Tax if Vendor elected to have prior transfers taxed under the Final Witholding Tax System
35% Tax on profit 7% Provisional paid on contract if Vendor had excluded prior transfers from the Final Witholding Tax System
NB: in case of a PROJECT where the property is transferred after 12 years from acqusition, 12% Tax applies
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37. Urban conservation areas
Tax at 5% is payable by the Vendor
Conditions:
Property is situated in a UCA
The Vendor had rehabilitated and/or restored the property in accordance with a MEPA permit
Permit was issued after
Property is transferred after
The works have been declared satisfactory by MEPA
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38. No tax is due on:
Donation: to a spouse, descendant or ascendant or the spouse thereof or if there are no descendants, to siblings or their descendants and donations to philanthropic institutions
Sole residence: a property that is owned and occupied for at least the past 3 years and even though property is vacated it has not been vacated for more than 1 year
Assignment of property between spouses after judicial separation or divorce, even if property is fully owned by the spouses
Where the community of acquests is dissolved and property is transferred from one party to the other
Inter-company transfer
The transfer of property upon the incorporation of a business or a partnership en nom collectif as a going concern into a limited liability company
Settlement of property on trust
Transfer by company to its shareholder (according to the conditions applicable)
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39. Property forming part of a project or SDA
Source:
Property forming part of a project or SDA
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40. Thank you