After the Malta Budget 2016 was announced, we identified the most relevant schemes and incentives to share with you in regards to taxes of real estate and property. Read on to find out more about what schemes and incentives are available to you in the year of 2016.
Micro Invest Tax Credit Scheme
The Micro Invest Tax Credit Scheme is a way to aid people to invest in their own business enterprises. It was launched in 2014 and will continue to be valid till 2020.
This incentive include the following eligible capital investments:
- Recruitment of employees
- Equipment, machinery and vehicles
- ICT equipment
- Development of websites
- and any other relevant expenses
This support is being given up to €25,000 through a deduction on income tax, calculated on the percentage of the amount invested. The scheme will deduct 45% for properties in Malta and 65% for properties in Gozo from the total expense by giving a Tax Credit on the annual Rental Income Tax which is 15%.
First Time Buyer Scheme
The First Time Buyer Scheme is an incentive to promote the purchase of immovable properties including UCA properties for first time buyers while exempting them from paying Stamp Duty on the first €150,000 of the property's value. This scheme has been extended till the 31st December 2016. All contracts finished until the mentioned date will benefit from a maximum saving of up to €5,250 reduction on Stamp Duty.
Urban Conservation Area Scheme
This scheme provides a reduced rate of duty for properties within the UCA. A property is within the UCA (Urban Conservation Area) if it is preserved and secured from being destroyed. The scheme is applicable to contracts being signed 1st January 2016 till the 31st December 2016.
No capital gains is paid if a seller has been living in a property being sold and it has been the official residential property for 3 or more years, however if not, the seller has to pay 5% tax.
Rental Tax Scheme
All rental income received from residential properties is applicable to 15% final withholding tax. This beneficial rate has been extended to cover any commissions received from commercial properties.