On 24th October 2022, the Minister for Finance, Clyde Caruana, presented the government’s Budget for 2023. Amongst other sectors, the Budget 2023 included several measures related to the property market.
First-time buyers will benefit from a €10,000 grant over ten years
The electoral promise to provide all first-time buyers with a cash grant will commence this year. Previously, grants in the scheme only applied to qualifying properties, typically those in Urban Conservation Areas (UCA). However, in the latest update, the government will offer a €10,000 grant, spread out over ten years, to first-time buyers purchasing a property valued up to €500,000. The scheme applies to any property acquired since 1st January 2022. Furthermore, the property won’t be subject to a means test, and the scheme is valid within every commercial bank providing home loans on the Maltese Islands.
The scheme will provide support to young prospective homeowners!
Deposit Payment Scheme
The Minister announced the extension of the Deposit Payment Scheme. This intends to assist persons under 40 qualifying for a home loan with commercial banks who lack the liquidity to pay the down payment required to purchase a property. Qualifying persons will receive an interest-free loan worth 10% of the value of the respective immovable property. The scheme is valid for properties valued up to €225,000, compared to the previous amount of €175,000. This broadening should be more reflective of current average market prices.
Existing property schemes to continue
Among the new proposals in the Budget 2023, the finance minister recalled the continued validity of past property incentives. Those that purchased properties built more than 20 years ago and vacant for seven years or located in UCA zones are exempt from capital gains tax and stamp duty on the first €750,000. First-time buyers will also continue to benefit from a grant of €15,000 or €30,000 for properties in Gozo. Furthermore, he also mentioned the continuation of a scheme in which those restoring and refurbishing old homes can claim back up to €54,000 in VAT on the first €300,000 incurred.
Stamp duty exemption for first- and second-time buyers and those purchasing properties in Gozo
The stamp duty reduction schemes will extend for another year. First-time buyers are exempt from duty on the first €200,000 of the consideration. Second-time buyers continue to benefit from a refund of duty paid on the first €86,000 of the new property. Lastly, those purchasing property in Gozo benefit from a duty rate of €2 for every €100, or in the case of transfers (inter vivos), an equivalent amount.
A new board overseeing the aesthetic criteria of housing
In the Budget 2023, the Minister also announced the establishment of a new board. The Board will focus on newly built properties that adhere to quality and aesthetic guidelines, allowing owners to benefit from reduced tax and duty. The newly erected Board will issue such guidelines. The Board will also manage several existing schemes regarding properties developed in accordance with approved criteria, particularly ‘new properties that are built in a typical Maltese style and architecture.’
Residency schemes for foreign investors
During this year’s speech, Caruana also mentioned the Global Residence Programme and Malta Residence Programme. He announced their revision and updating to reflect the changing international situation and to ensure that Malta remains an attractive option.
It’ll be interesting to see how the local property economy continues to develop. This is especially true given the current state of international affairs. During such turbulent times, it helps to have support from those knowledgable about the evolving property market. This is when a team of skilled property managers responsible for the day-to-day activities of your properties is helpful. Get in touch with Casa Rooms for more information on how we can suit your needs.