2017 seems to be an interesting year for the real estate market. On Monday, the Minister of Finance, Professor Edward Scicluna, forwarded 4 main points that will be directly affecting the real estate industry. These points include, the renewal of the first time buyer’s concession, tax incentives on those who buy in Urban Conservation Areas, the real estate industry in Gozo and low-income tenants.
Buying a new home is one of life’s milestones. The budget announced during November 2013 promised would-be property owners an exemption form duty payments on the first €150,000 spent on the purchase of the first property in Malta or Gozo. This translates in saving of some €5,250 for each buyer. In the budgetary speech, the Minister of Finance announced that this grant will continue till the beginning of 2018.
The Planning Authority will be launching a new scheme on properties situated in Urban Conservation areas. Last year, properties situated in the UCA’s, had a reduction in stamp duty from 5% to 2.5%, levied on transfers of property within a UCA. Furthermore, the rate of the final withholding tax that will be levied on transfers of restored property, within a UCA, was reduced from 8% to 5%. The budget for 2017 proposes that tax incentives will be given to those who buy a property in an urban conservation area which needs restoration. Benefits could reach up to €100,000.
A new incentive that is set for 2017, is that all property bought in Gozo, will be taxed at 2%, instead of 5%. This tax will apply for those who enter into a promise of sale agreement in 2017 and concluded a contract in 2018.
Government subsidies will double for those on a low-income, provided they produce their rental contract. The new subsidy will reach between €66.67 and €83.33 according to the income and size of the household. At present applicants cannot have more than €10,000 in the bank to qualify, but this will double under the new measures. The Finance Minister also announced that increases in social housing rents will return to the levels they were in 2013.
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