On the 14th October 2019, the Minister for Finance, Edward Scicluna presented the Budget for 2020. Amongst other sectors, the Budget included several property-related measures.
Stamp duty exemption for first-time buyers
The stamp duty exemption for first-time homebuyers has been raised to apply to the first €175,000 of a property, in contrast to the previous value of €150,000. This results in additional savings of up to €1,250. The maximum benefit will also increase to €6,500, from the previous €5,000. This is active immediately and will continue to apply during 2020.
Schemes for property purchases in Gozo, urban conservation areas, second-time buyers and equity sharing will be retained throughout 2020.
Reduced duty for second-time buyers
For those individuals to wish to sell their first residential property to acquire another residential property, there is now the eligibility to a refund of stamp duty of up to €3,000 (or €5,000 in the case of disabled persons). This is applicable in the situation that the person does not concurrently own any other property.
Duty on the acquisition of property in an Urban Conservation Area (UCA)
Currently, the acquisitions of properties situated in a UCA are subject to a reduced stamp duty rate of 2.5%, as opposed to the standard 5%.
Duty on the acquisition of property in Gozo
Those who acquire residential property in Gozo are currently subject to a stamp duty rate of 2%, as opposed to the standard rate of 5%.
Duty on the inheritance of a residence
For those individuals who inherited the real estate in which they currently reside, stamp duty is paid at a rate of 3.5%, for a maximum property value of €175,000. This is an increase from the previous maximum property value of €150,000.
Acquisition of ordinary residence
All individuals buying their residential property (even those which are not first-time buyers) shall now benefit from a reduction in the duty payable.
Aid in real estate down payments
Low-income earners aged under 40 can qualify for an interest-free loan of up to €17,500, which will assist buyers who are unable to cover the 10% deposit/initial down payment. Such a loan is to be repaid over 15 years. The interest on such loans will be handled by the government.
Subsidies for rental properties
The housing benefit scheme has been extended for individuals spending more than 25% of their income on rent. The eligibility criteria for property rental subsidies will be extended to a maximum annual income of €19,000 (from the previous €14,500) for single persons, and €32,000 (from the previous €28,600) for families with children.
Restoration of property
The schemes to restore the facades of old houses, ‘Irrestawra Darek’ has been extended for a further year.
An investment of €60 million has been allocated for the development of an additional 1,700 new units of social housing. This is in addition to another project which includes more than 700 new units of social housing.
The Housing Authority shall continue its maintenance programme, which will now impact an additional 50 housing blocks spread across multiple localities.
A dedicated authority shall be formulated to further enhance the regulatory reforms to the construction sector. Furthermore, the new rent laws are to be enforced in 2020.
Local Councils will be encouraged to implement various projects to improve the quality of life of residents.
Final tax on the transfer of a promise of sale
As of 1 January 2020, the first €100,000 of profit derived through a promise of sale agreement shall be subject to a final tax at a reduced rate of 15%, instead of the previous rate of 35%.
Heavy machinery scrappage scheme
For operators within the construction sector, a grant of up to €200,000 is being offered. This is to promote discarding of old machinery and replace them with cleaner, less noisy ones.
Grant for the purchase of renewable energy battery storage
As of next year, a grant of 25% will be introduced to purchases of renewable energy battery storages to promote the use of renewable energy resources. The grant of up to €1,000 is available to the early adopters of solar panels who are no longer benefiting from the feed-in tariff scheme.
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