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Malta Extends Tax Exemptions

Malta is one of the few countries that continue to issue “Golden passports” for investment. As quite a lot of entrepreneurs are interested in acquiring an EU passport via this programme, in this article we have summarised the changes in the Maltese tax laws in 2022.

Extension of Property Tax Benefits

An important condition of acquiring Maltese citizenship is purchasing or renting real estate so prospective investors might like to consider that the temporary real estate tax offer has been extended till June 2022:

  • For buyers, stamp duty was reduced from 5-7% to 1.5% of the property value
  • For sellers, the capital gains tax was reduced from 8% to 5% of the income earned.

However, these regulations only apply to purchases up to €400,000. If your property value is higher, the difference will be paid according to standard rules.

If you plan to relocate to Europe, you need to know how much you are expected to pay for real estate in order to get an immigration status:

  • temporary residence – €220,000
  • permanent residence – €300,000
  • citizenship – €700,000.

In order to become a citizen of Malta, you will also need to make a non-refundable contribution to the government fund of over €600,000 and a charity donation of €10,000.

Benefits for Buyers of Period Properties

If you think about buying a period property which has a cultural and historic value, you will be entitled to a range of allowances:

  • For buyers, no stamp duty. It kicks in only for properties whose value exceeds €750,000 and applies only to the difference in price
  • For sellers, no capital gains tax.

Besides, buyers can get a grant if they plan to refurbish the building. For the island of Malta, the grant amounts to €15,000, and €30,000 for Gozo.

The following property types are included in the above mentioned programme:

  1. Buildings in urban conservation areas, i.e., historic districts considered to be architectural heritage of the country. A grant is granted only for the first property
  2. Modern houses built in the traditional Maltese style
  3. Properties listed for renovation, i.e., buildings built before 2002 that have been vacant for at least seven years. Additional allowances can also be granted, such as getting VAT back for construction materials up to €54,000.

This programme will be in force till October 2024.

Extending Tax Reduction for Business Inheritance

Till the end of 2022, tax on business inheritance is reduced from standard 5% to 1.5% which means that it will be much cheaper to hand over a family business to children.

Increased Penalties for Tax Non-Payments

Starting from June 2022, penalties for non-payment of income tax and VAT will increase. Now, they will be increased from current 6.5% to 7.5% per year.

If you are interested in getting a Maltese passport by investment or you need a consultation on tax matters, feel free to contact our specialists. We will be glad to answer your questions and advise you about nuances of immigration and tax procedures.

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