EXEMPTION OF DUTY IN TERMS OF ARTICLE 23 ORDER

SUBSIDIARY LEGISLATION 364.12

EXEMPTION OF DUTY IN TERMS OF

ARTICLE 23 ORDER

2nd November, 2007

LEGAL NOTICE 343 of 2007, as amended by Legal Notices 425 of 2007,

and 393 of 2013, consolidated, and as amended by Legal Notices 29, 182, 378

of 2015, 384 of 2016, 342 of 2017, 8 and 415 of 2018, 281 of 2019, 240, 427 of

2020, 130, 277, 324 and 460 of 2021 and 122, 224 and 366 of 2022 and 76,

289 and 316 of 2023, 325 of 2024 and 305 of 2025.

The title of this Order is the Exemption of Duty in terms of

article 23 Order.

As from the 16th October, 2007 in respect of transfers by a

gratuitous title by a person to his descendants in the direct line who

acquire immovable property for the purpose of establishing therein or

constructing thereon their sole, ordinary residence, the duty otherwise

chargeable in terms of the Duty on Documents and Transfers Act, shall

be chargeable on the value thereof at the rate of three euro and fifty

cents (3.50) per one hundred euro or part thereof, provided that this is

the first transfer by such a person to such a descendant for this purpose

and in this manner and provided that the notary who receives any deed

of such a transfer shall record in the deed a written declaration by the

person so transferring and the person so acquiring that the property is

being acquired for the said purpose for the first time and the notary

shall warn the said person and descendant of the importance of the

truthfulness of such declaration.

In respect of transfers of property, made on or after the 5th

November 2013 but before the 15th October 2019, which qualify for

relief of duty under article 32(4)(a) of the Duty on Documents and

Transfers Act, no duty shall be chargeable on the first one hundred and

fifty thousand euro (€150,000) of the aggregate value of the

consideration paid for the acquisition of such property by a person,

provided that this is the first immovable property acquired inter vivos

by such person and provided that the notary who receives any deed of

such a transfer shall record in the deed a written declaration by the

person so acquiring that this is the first immovable property acquired

inter vivos by him and the notary shall warn the said person of the

importance of the truthfulness of such declaration

Provided also that relief granted under this Order shall not

apply to any transfer of property where a notice of a promise of sale or

transfer relating to such property has been given to the Commissioner

in accordance with the provisions of article 3(6) of the Duty on

Documents and Transfers Act or of rules made under that Act before

the 1st July 2013

Provided that in respect of transfers of property made on or

after the 15th October 2019 but before the 20th October 2020, which

qualify for relief of duty under article 32(4)(a) of the Duty on

Documents and Transfers Act, no duty shall be chargeable on the first

one hundred and seventy-five thousand euro (€175,000) of the

aggregate value of the consideration paid for the acquisition of such

property by a person, provided that this is the first immovable property

acquired inter vivos by such person and provided that the notary who

receives any deed of such a transfer shall record in the deed a written

declaration by the person so acquiring that this is the first immovable

property acquired inter vivos by him and the notary shall warn the said

person of the importance of the truthfulness of such declaration

Provided further that in respect of transfers of property made

on or after the 20th October 2020 but before the 28th October 2025,

which qualify for relief of duty under article 32(4)(a) of the Duty on

Documents and Transfers Act, no duty shall be chargeable on the first

two hundred thousand euro (€200,000) of the aggregate value of the

consideration paid for the acquisition of such property by a person,

provided that this is the first immovable property acquired inter vivos

by such person and provided that the notary who receives any deed of

such a transfer shall record in the deed a written declaration by the

person so acquiring that this is the first immovable property acquired

inter vivos by him and the notary shall warn the said person of the

importance of the truthfulness of such declaration

Provided also that in respect of transfers of property made on

or after the 9th June 2020 but before the 28th October 2025, for the

purpose of determining whether the property is the first immovable

property acquired inter vivos by such person, the previous acquisition

by such person of an undivided share of immovable property

representing less than twenty-five per cent (25%) of the real value of

the whole of such property, shall not be taken into account, so however

that this proviso shall not apply if such person has been granted the

relief provided under article 32(4)(a) of the Duty on Documents and

Transfers Act or under this article

Provided further that in respect of transfers of property made

on or after the 9th June 2020 but before the 28th October 2025, for the

purpose of determining whether the property is the first immovable

property acquired inter vivos by such person, the previous acquisition

by such person of a garage of not more than thirty square metres, shall

not be taken into account, so however that this proviso shall not apply

if such person has been granted the relief provided under article

32(4)(a) of the Duty on Documents and Transfers Act or under this

article

Provided also that 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 in respect of a transfer to which

any of the foregoing provisos applies, there shall be submitted to the

Commissioner for Revenue legal evidence that no other immovable

property had been acquired inter vivos before, and that the said form

has been submitted to the Commissioner for Revenue on or before the

28th February 2026

Provided further that in respect of a transfer under an onerous

title made on or after the 28th October 2025 which qualifies for a

concession of duty under article 32(4)(a) of the Duty on Documents

and Transfers Act, no duty shall be chargeable on the first two hundred

thousand euro (€200,000) of the aggregate value of the consideration

paid for the acquisition of that property if all the following conditions

are satisfied

(a) the person acquiring the property has not made any

previous inter vivos acquisition of any immovable

property that is wholly or partially used or intended to

be used as a residence, including land, airspace and

any other immovable property acquired for the

purpose of constructing or developing thereon or on

part of the property to be used as a residence, or in

respect of which there exists a development permit or

an application for a development permit for such

construction or development;

(b) the notary who receives the deed of the transfer

records in the deed a declaration by the person so

acquiring that the aforesaid condition is satisfied and

warns the said person of the importance of the

truthfulness of such declaration;

(c) together with the form or other means provided by the

Commissioner for Tax and Customs for the purposes

of article 51 of the Duty on Documents and Transfers

Act in respect of a transfer to which this proviso

applies, legal evidence shall be submitted to the

Commissioner that the aforesaid condition is satisfied,

and for the purpose of determining whether the person acquiring

the property had made any previous acquisition inter vivos of

property referred to in paragraph (a), the previous acquisition by

that person of an undivided share of such property shall not be

taken into account as long as such acquisition represents in the

aggregate less than twenty-five per cent (25%) of the real value of

the whole of that property, and as long as that person made no other

previous acquisition inter vivos of such property or of part of such

property, sohowever that this paragraph shall not apply if such

person was granted the concession provided under article 32(4)(a)

of the Duty on Documents and Transfers Act or under this article

Provided also that the benefit would apply on a pro-rata basis

according to the share of the property being acquired.

(1) In the case of a transfer inter vivos of residential property

situated in Gozo, the duty otherwise chargeable in terms of the Duty

on Documents and Transfers Act shall be chargeable at the rate of two

euro (€2.00) for every one hundred euro (€100.00) or part thereof of

the amount or value of the consideration for the transfer of the

property or the value of the property, whichever is the higher.

Provided that

(a)

this article shall not apply to a transfer where a

notice of a promise of sale agreement in relation to that transfer

was given in accordance with the provisions of article 3(6) of

the Duty on Documents and Transfers Act or of any rules made

thereunder before the 18th October 2016;

EXEMPTION OF DUTY IN TERMS OF ARTICLE 23

(b)

subject to paragraph (a) and to the other

provisions of this article, this article shall only apply where no

relief is claimed in accordance with article 32C of the Duty on

Documents and Transfers Act and provided that either of the

following two conditions is satisfied

(i)

the final deed relative to the said transfer is

made by the by the 31st January 2024 and the notice of

the said final deed is given to the Commissioner for Tax

and Customs by the 31st March 2024; or

(ii)

notice is given in accordance with the

provisions of article 3(6) of the Duty on Documents and

Transfers Act or of any rules made thereunder by the 31st

January 2024 of a promise of sale agreement in relation to

such transfer;

(c)

without prejudice to the provisions of the fourth

proviso to this sub-article, a promise of sale agreement shall be

deemed as being an agreement in relation to a transfer when all

the following conditions are satisfied

(i)

the final deed relative to the said transfer is

made in accordance with the same terms and conditions

agreed to in the said promise of sale agreement;

(ii)

the transfer is made by the same person who

appeared on the said promise of sale agreement as the

person who has promised to transfer the property in

question or his heir; and

(iii)

the transfer is made

(a)

to the same person who appeared on

the said promise of sale agreement as the person

who has promised to acquire the property in

question or his heir; or

(b)

where the said promise of sale

agreement has been assigned to another person or

where an agreement of a promise of assignment of

the said promise of sale agreement has been

concluded, and notice of the said assignment or

promise of assignment has been given in

accordance with the provisions of article 3(6) of

the Duty on Documents and Transfers Act or of

any rules made thereunder by the 31st January

2024, to the same person to whom the said

promise of sale agreement has been assigned or

with whom the agreement of a promise of

assignment of the said promise of sale has been

concluded, or his heirs;

Provided also that this article shall not apply to acquisitions of

property made for the purpose of demolition and the construction of

more than one unit, or to acquisitions of property in the course of a

trade or business

Provided also that this article shall not apply to acquisitions

made by a body of persons

Provided also that where a notice of a promise of sale or

transfer relating to a property given to the Commissioner in

accordance with the provisions of article 3(6) of the Duty on

Documents and Transfers Act or of rules made under that Act before

the 18th October 2016 is either cancelled after the said date or expired

and, either the said property is transferred to the same person or

persons appearing on the said promise of sale which has been

cancelled or expired or, another property forming part of the same

project or situated within the same building is transferred to the same

person or persons appearing on the said promise of sale which has

been cancelled or has expired, any of such transfers shall for the

purpose of this article be deemed to be transfers in respect of which a

notice of a promise of sale or transfer has been given to the

Commissioner in accordance with the provisions of article 3(6) of the

Duty on Documents and Transfers Act or of rules made under that Act

before the 18th October 2016.

(2) For the purposes of this article, "residential property" includes

a garage attached to or underlying such residence or a garage situated

in the same block of residential apartments of which the residence

forms part or a garage of not more than thirty (30) square metres

situated within five hundred (500) metres of such residence or block of

apartments, and acquired together with such residence on the same

deed.

(3) In the case of a transfer of land, the relief granted under this

article shall only apply if one residential unit is to be built thereon, and

such relief shall be forfeited in the case of a breach of this condition.

(1) In the case of a transfer inter vivos of immovable

property or any real right over such property made on or after the

9th June 2020, the duty otherwise chargeable in terms of the Duty

on Documents and Transfers Act on the first four hundred thousand

euro (€400,000) of the amount or value of the consideration for the

transfer of the property or the value of the property, whichever is

the higher, shall be chargeable at the rate of one euro and fifty cents

(€1.50) for every one hundred euro (€100.00) or part thereof

Provided that this article shall only apply where all the

following conditions are satisfied

(a)

the person acquiring the property does not require

a permit for the purposes of the Immovable Property

(Acquisition by Non-Residents) Act or who would have

required such a permit had the property acquired not been

situated in a special designated area;

(b)

the transfer is made in terms of a promise of sale

EXEMPTION OF DUTY IN TERMS OF ARTICLE 23

or transfer notice of which would have been given to the

Commissioner for Revenue before the 1st January 2022;

(c)

no relief is claimed under article 32C of the Duty

on Documents and Transfers Act on the same transfer.

(2)

In the case of an acquisition of an undivided share of

property, the benefit shall apply on a pro rata basis according to the

share of the property being acquired.

(3)

(a) where the Commissioner is of the opinion that two or

more transfers form part of a structured arrangement, he

may order, within five years from the date of the last of

the said transfers, that the exemption granted under this

article shall not apply to those transfers and in such a case

the duty shall be chargeable on each of those transfers in

accordance with the provisions of the Duty on Documents

and Transfers Act without reference to this article;

(b) the difference between the duty chargeable as provided in

sub-article (3)(a) and the duty already paid shall become

payable by not later than thirty (30) days following the

service of a notice on the transferee;

(c) a person served with a notice made under sub-article

(3)(a) shall have the same rights of objection and appeal

in accordance with the provisions of the Duty on

Documents and Transfers Act as if that notice were an

assessment made under article 54 of that Act;

(d) for the purpose of this article, "structured arrangement"

means two or more acquisitions of portions of the same

property made by the same person within a period of six

months which are executed separately rather than by

means of one single transfer, solely or mainly for the

purpose of inflating the benefit of the exemption that

would otherwise be available in terms of this article;

(e) for the purpose of paragraph (d), "portions of the same

property" includes

(i)

adjacent parcels of land;

(ii)

portions of developed property or of

property under construction that are not identifiable as

separate units;

(iii)

the airspace and the property beneath it;

(iv)

portions of the airspace overlying the same

property;

(f)

for the purpose of paragraph (d), acquisitions made by

bodies of persons that are directly or indirectly controlled

and beneficially owned as to more than fifty per cent

(50%) by the same persons shall be deemed to be

EXEMPTION OF DUTY IN TERMS OF ARTICLE 23

acquisitions made by the same person.

(4) The provisions of this article shall be deemed to have come

into force on the 9 th June 2020.