How do the latest government property measures affect buyers?
2020 has been an unpredictable year with the pandemic initially interrupting the property market due to the lock-down in the first half of the year. Nevertheless, the local market has proved to be resilient with sales booming in August, creating unprecedented demand that surpassed the previous four years’ sales. The Malta Developers’ Association announced that over 1,300 promises of sale were registered with a monetary value of over €300 million.
Increased Savings for First-Time Buyers
To boost demand further, the government announced in the 2021 budget that the scheme for first-time buyers will be extended to March 2021 for the promise of sale agreements and signing of contracts to December of the same year. Moreover, the property value ceiling is being increased to €200,000, up from the previous limit of €175.000 for high demand areas. The scheme exempts first-time buyers from 5% stamp duty on the first €200,000 that will create additional savings. Anything above €200,000 up to €400,000 is liable to a 1.5% stamp duty and anything above the €400,000 value is liable for the standard rate of 5%.
Why Buy Property in the North?
If buyers choose a property located in Gozo or an Urban Conservation Area, the stamp duty is reduced further to 1.5% on the amount above €200,000, up to €400,000. Buying property in the North is of particular interest as it creates additional savings for first-time buyers, making it a more attractive proposition. Property in the North isn’t plagued by parking problems or overcrowding, and property prices aren’t exaggerated as they are in locales such as Sliema or St Julian’s. Resale values are improving as more locals and foreigners are coming to realize the investment potential of buying a property. The scheme favours those buying property in the North, making it more affordable for first-time buyers who are usually on a tighter budget. The savings can be used for furniture, decorating and internal fittings like floor tiles, bathrooms and electronic appliances such as air-conditioning units.
Who can apply for the Scheme?
Maltese and EU citizens buying their primary residence in Malta are eligible for the scheme, while non-EU residents aren’t, and will still need to apply for an AIP permit. The property should be the first residence. The scheme applies to immovable property, while furniture and fittings are tax-free. The government adopted suggestions put forward by The Malta Developers’ Association that recommended extending the program. It is the second time that the government has increased the ceiling, and other property-related incentives were announced, like raising the tax-exempt threshold for property donations to €250,000, up from €200,000.
What are the Benefits for First-Time Buyers?
The newly introduced property scheme favours first-time buyers who make the bulk of property purchases. The Northern part of Malta provides better value and is more affordable. Furthermore, many buyers today are purchasing semi-finished properties or buying on-plan since the cost savings are more significant, and they are less expensive. The new scheme will undoubtedly boost sales, particularly in locations that are affordable for individuals who are buying their first property. Areas like St Paul’s Bay, Mellieha, Gharghur and also Gozo are now even more attractive than they ever were. Get in touch with us at justproperties.com.mt for a free consultation and an overview of the best value properties for sale in the North before it’s too late, and the scheme ends in December 2021.
