Transfers on Certain Property Transfers Rules, 2021

L.N. 461 of 2021

INCOME TAX ACT

(CAP. 123)

DUTY ON DOCUMENTS AND TRANSFERS ACT

(CAP. 364)

Relief from Income Tax and from Duty on Documents and

Transfers on Certain Property Transfers Rules, 2021

IN EXERCISE of the powers conferred by articles 12(2) and 96

of the Income Tax Act and article 22A of the Duty on Documents and

Transfers Act, the Minister for Finance and Employment has made the

following rules:-

The title of these rules is the Relief from Income Tax and

from Duty on Documents and Transfers on Certain Property Transfers,

Rules, 2021.

In these rules, unless the context otherwise requires

"competent authority" means a board or other entity designated

or appointed by the Minister for the purpose of these rules;

"duty on documents and transfers" means duty chargeable on

sales and other transfers in terms article 32 of the Duty on Documents

and Transfers Act;

"income tax" means tax chargeable on property transfers in terms

of article 5A of the Income Tax Act;

"property" means immovable property situated in Malta;

"transfer value" means the market value at the time of the transfer

or, when property is transferred under an onerous transfer for a

consideration that is higher than the market value, the consideration

for that transfer.

(1) Subject to the other provisions of these rules, no

income tax and no duty on documents and transfers shall be payable on

the first seven hundred and fifty thousand euro (€750,000) of the

transfer value of any transfer to which rule 4 or rule 5 applies that is

made on or after 12 th October 2021 but not later than 31 st December

2024

Provided that relief from duty on documents and transfers

shall be allowed in terms of this rule only where the transfer is made to

a person who does not require a permit by the Minister for the

purposes of the Immovable Property (Acquisition by Non-Residents) Cap. 246.

Act or who would not have required such permit had the property

acquired not been situated in a special designated area.

(2) The relief mentioned in sub-rule (1) shall be allowed only

as long as the notice of the transfer referred to in article 51 of the Duty Cap. 364.

on Documents and Transfers Act is delivered to the Commissioner by

not later than 31 st January 2025.

(3) When the transfer value of a transfer referred to in sub-rule

(1) exceeds seven hundred and fifty thousand euro (€750,000), the

income tax and the duty on documents and transfers on the excess shall

be chargeable at the rates that apply in terms of the relevant provisions

of the Income Tax Act and the Duty on Documents and Transfers Act, Cap.

123. and for the purpose of determining the said rates that portion of the

transfer value that is relieved from tax on income and from duty on

documents and transfers in terms of these rules shall be deemed to

constitute the first part of the transfer value.

(1) This rule applies to any transfer of property that Vacant property.

satisfies all the following conditions

(a) the property transferred is a building and its

construction was completed at least twenty (20) years before the

date of the transfer;

(b) the property transferred is vacant on the date of the

transfer and has been vacant for a period of at least seven (7)

continuous years immediately preceding that date;

(c) the transferor declares to the notary who publishes the

deed of the transfer that the conditions mentioned in paragraphs

(a) and (b) are both satisfied and that declaration is confirmed by

an architect’s report relating the date of the completion of the

construction of the property and a report by ARMS Ltd (a

limited liability company with registration number C46054)

relating to the period for which the property has been vacant and/

or such further or alternative evidence as the Commissioner may

determine by means of guidelines published for the purposes of

article 96 of the Income Tax Act and article 22A of the Duty on Cap. 123.

Documents and Transfers Act and the notary makes note in the Cap. 364.

deed of the said declaration and documents;

(d) the reports and evidence mentioned in sub-paragraph

(c) are delivered to the Commissioner on such form and in such

manner as he may approve together with the notice of the

transfer referred to in article 51 of the Duty on Documents and

Transfers Act.

(1) This rule applies to any transfer of property that

satisfies all the following conditions

(a) the property transferred is situated, at the time of the

transfer, within an urban conservation area;

(b) the parties to the deed of the transfer or any of them

declare that the condition mentioned in paragraph (a) is satisfied

and that declaration is confirmed by a certificate issued by the

Planning Authority established under the Development Planning

Act and, or such further or alternative evidence as the

Commissioner may determine by means of guidelines published

for the purposes of article 96 of the Income Tax Act and article

22A of the Duty on Documents and Transfers Act and the notary

makes a note in the deed of the said declaration and the

documents;

(c) the documents and evidence mentioned in sub-

paragraph (b) are delivered to the Commissioner on such form

and in such manner as the Commissioner may approve together

with the notice of the transfer referred to in article 51 of the Duty

on Documents and Transfers Act.

(1) The relief from income tax and from duty on

documents and transfers mentioned in rule 3 on a transfer to which rule

4 or rule 5 applies shall be subject to the condition that the property

transferred is not, at any date after the transfer

(a)

demolished; or

(b) subjected to structural alterations or additions as a

result of which it is divided into more transferable units than the

number of transferable units that comprised the property at the

time of the transfer.

(2) If the condition mentioned in sub-rule (1) is in any way

breached, the relief from income tax and from duty on documents and

transfers granted by these rules on the said transfer shall be forfeited

and the total of the amount of such income tax and duty that was so

relieved shall become payable to the Commissioner forthwith.

(3)

The person who acquired the property at the time that the

relief from income tax and from duty on documents and transfers was

allowed and, if different, the owner at the time that the condition

mentioned in this rule is in any way breached shall be jointly and

severally liable for the payment of the amount mentioned in sub-rule

(2).

(1) Subject to the other provisions of these rules, no duty Exemption from

on documents and transfers shall be payable the first seven hundred duty

documents and

and fifty thousand euro (€750,000) of the transfer value of any transfer transfers.

to which rule 8 applies that is made on or after 12 th October 2021 but

not later than 31 st December 2024.

(2) The relief mentioned in sub-rule (1) shall be allowed only

as long as the notice of the transfer referred to in article 51 of the Duty

on Documents and Transfers Act is delivered to the Commissioner by

not later than 31 st January 2025.

(3) When the transfer value of a transfer referred to in sub-rule

(1) exceeds seven hundred and fifty thousand euro (€750,000), the

duty on documents and transfers on the excess shall be chargeable at

the rates that apply in terms of the relevant provisions of the Duty on Cap. 364.

Documents and Transfers Act, and for the purpose of determining the

said rates that portion of the transfer value that is relieved from duty on

documents and transfers in terms of these rules shall be deemed to

constitute the first part of the transfer value.

This rule applies to any transfer that satisfies all the Property

developed in

following conditions

conformity with

approved

criteria.

(a) it is a transfer to a person who does not require a Cap. 246.

permit by the Minister for the purposes of the Immovable

Property (Acquisition by Non-Residents) Act or who would not

have required such permit had the property acquired not been

situated in a special designated area;

(b) it is a transfer of property that is developed after the

date of the transfer and the development is approved as provided

in rule 9;

(c) evidence of the approval referred to in paragraph (b)

is produced to the Commissioner by not later than three (3)

months from the date on which it is issued, together with such

information and further evidence as the Commissioner may

require

Provided that duty on documents and transfers on a transfer

to which this rule applies shall be payable at the time of the transfer

without reference to these rules and the relief from the said duty

allowable under these rules on that transfer shall be given effect to,

subject to the other provisions of these rules, by means of a refund of

the amount so relieved once the conditions in this rule have been

satisfied.

(1) Approval of the development of property for the

purpose of rule 8 shall be sought by the developer from the competent

authority.

(2) The competent authority shall grant its approval when it is

satisfied that the application has been made and the development has

been completed in conformity with such guidelines as it may publish

and as it may update from time to time.

(3) Subject to the terms of reference of the competent

authority, guidelines published by it for the purpose of these rules may

include guidelines on

(a) the procedure relating to the application, including

the information and documents to be submitted;

(b) conditions on the architectural design and other

features that the development must conform with;

(c) other conditions that are considered necessary for the

proper implementation of the measure announced in this respect

by the Minister in the speech on the budget for 2022.

An application for a refund of the duty on documents and

transfers that was paid on a transfer to which rule 8 applies shall be

made by the person who paid the said duty in such manner and on such

form as the Commissioner may approve.

(1) The relief from duty on documents and transfers on a

transfer to which rule 8 applies shall be subject to the condition that,

unless otherwise expressly allowed by the competent authority, the

developed property is not, at any date after the approval of the

development

(a)

demolished; or

(b) subjected to structural alterations or additions that

result in material changes to the architectural design approved by

the competent authority; or

(c) divided into more transferable units than the number

of transferable units that comprised the property at the time that

the approval of the competent authority was granted.

(2) If the condition mentioned in sub-rule (1) is in any way

breached, or if there is a breach of any condition imposed by the

competent authority for the approval of the development, the relief

from duty on documents and transfers on the said transfer shall be

forfeited and the amount that was refunded in accordance with rule 8

shall be paid back to the Commissioner forthwith.

(3) The person who was the owner of the property at the time

that the approval of the development was granted and, if different, the

owner at the time when the relief from duty on documents and

transfers is relieved as provided in this rule shall be jointly and

severally liable for the payment of the amount mentioned in sub-rule

(2).

Notwithstanding the other provisions of these rules, when a Transfers to

transfer to which rule 4 or rule 5 or rule 8 applies is also a transfer to which

32C of the Duty

which article 32C of the Duty on Documents and Transfers Act on

and Transfers

applies, the relief from duty on documents and transfers shall not be Act applies.

available under these rules in conjunction with the relief available Cap. 364.

under the said article 32C but shall be available only as provided in

these rules or only as provided in the said article 32C depending on the

election made by the transferee by means of a declaration to the notary

who publishes the deed of the transfer and recorded in that deed.

(1) When a person acquires property under a transfer to Transfer

which one of these rules applies and that acquisition is also an mentioned

article 32(4)(a)

acquisition that qualifies for relief of duty on documents and transfers of

Documents and

as provided in article 3 of the Exemption of Duty in Terms of article 23 Transfers Act.

Order, he shall submit legal evidence that no other property had been S.L. 364.12.

acquired by him inter vivos before and that evidence shall be submitted

to the Commissioner together with the form or other means provided

by the Commissioner for the purposes of article 51 of the Duty on

Documents and Transfers Act by not later than 31 January 2025.

(2) A person who fails to comply with the provisions of sub-

rule (1) shall not forfeit, solely by reason of that failure, the benefit

under these rules, but that failure may be considered as a breach of a

condition for the grant or other benefit that may be given under any

law, rules or scheme to persons who make an acquisition mentioned in

sub-rule (1).

(3) This rule is without prejudice to all the terms and

conditions of any law, rules or scheme mentioned in sub-rule (2).

€0.63