For yet another year, the Malta 2020 budget has seen government put forward a number of positive measures from which employers, employees, pensioners and citizens at all levels of the social ladder are expected to benefit.

When it comes to the property market, a good number of measures have also been announced, with government focusing on improving affordability.

The Malta 2020 Budget - A Property Perspective

Interest-free loans up to €17,500 repayable over 15 years

The government has announced that persons under the age of 40 years with low income will be eligible for an interest-free loan of up to €17,500 to cover their 10% deposit payment, repayable over 15 years. The scheme is expected to be rolled out in the coming months, and further details on how it will work will be announced shortly. This forms part of a series of measures announced to improve access to housing.

First-Time-Buyer scheme extended

Until this year, first-time buyers were exempt on paying stamp duty for the first €150,000 of a property’s value. The scheme, which was available for property contracts signed till end 2019, has now been extended till end 2020.

Till now, first time buyers were exempt from paying stamp duty on the first €150,000 of the property price. This has now been upped to €175,000, with a maximum saving of €6,125 for the property buyer.

Reduction in duty for second-time buyers

Individuals who sell their first residential property to purchase another residential property are currently eligible to a refund of duty of up to €3,000 (or €5,000 in the case of persons with special needs) provided that they do not own any other property at that time. This measure is being extended to qualifying acquisitions made during 2020.

Existing property related schemes to be extended

In addition to the first-time buyer scheme, other existing schemes, such as when buying property in Gozo, and in Urban Conservation Zones will be renewed for another year.

When buying property in Gozo a stamp duty rate of 2% (instead of 5%) will continue to apply, whilst purchases of property in Urban Conservation Areas will carry a stamp duty rate of 2.5% (instead of 5%).

Transfers of promise of sale agreements

People who sell a property to a third party which is still on a promise of sale will now be subject to a 15% tax on the first €100, 000 gain. Any further gain will be taxed at 35%. This activity was previously all taxed at 35%. This tax would have to be collected by a notary in the same way that a tax for transfer of property is collected.

Rental benefits

The housing benefit scheme for tenants paying more than 25% of their income has been extended for another year. Furthermore, the annual salary capping to benefit from this initiative has also been increased, from €14,500 to €19,000 for single persons or couples. In the case of a couple with two children, their eligibility cap will rise from a maximum income of €28,600 to €32,000.

The Housing Authority will also maintain over 50 social housing blocks in various localities.

Reduced tax rate on inherited property

Persons who inherit property and opt to take it up as their main residence will be able to benefit from a reduced tax rate of 3.5% on the first €175,000.

Other property related measures

  • Tax exemptions for the purchase of vacant properties and properties in Gozo are also expected to be announced in the coming months.
  • A Building and Construction authority is being set up to regulate and monitor the construction industry.
  • Tax incentives will also be introduced for contractors who invest in new machinery. This will be done through Malta Enterprise, who will be offering incentives to construction operators to replace equipment with new machinery which pollutes less.
  • Refund schemes for restoration will also be rolled over. These schemes provide a number of rebates on renovation works on certain properties.
  • The new budget measures also made reference to a new exemption for those who buy a property they have been living in but did not own. This would apply even if the applicants were not first-time buyers.
  • Following the setting up of a new Agency on Land Registration, a new online system will be introduced to facilitate the registration of new property.

Other Key Budget Measures

An Economic Perspective


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Although not growing at the same rates as in the last few years, Malta’s GDP growth is still strong compared to the EU average. In fact, the economy for 2020 is expected to keep flourishing with Malta’s GDP projected to grow by 4.3 per cent, with a surplus of 1.4 per cent and the island’s debt-to-GDP ratio declining further to 40.4 per cent.

The Government aims to keep unemployment low at 3.5% during 2020 resulting in a 4.1% improvement in the employment.

The inflation for 2020 is expected to be at the rate of 1.6%.

New proposed industries mentioned during the budget speech include the space sector and the drones sector, though which government aims to attract foreign investment in research and new innovative technologies.

Government will also be investing further in AI. Amongst others student scholarships in the field will be introduced, and an AI innovation hub will be established.

Further investment in the Fintech field is expected. This will include investment in the Internet of Things and cyber security spheres.

Environment-Friendly Measures


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  • The government committed itself to announce a cut-off date for vehicles with combustion engines by early next year.
  • Electric car owners will pay lower electricity rates as of January 1, 2020.
  • Single-use plastics will be banned completely as of 2022.
  • A beverage container recycling scheme will be operational by end of 2020.
  • The government announced that it will embark on drafting a a national strategy to make Malta Carbon neutral by 2050.
  • Measures to improve waste management were announced including the development of a new plant to convert waste to energy. Government also plans to carry out additional studies on the quality of air and biodiversity.
  • 2020 will see the government kick-off work on doubling the Ta’ Qali national park area and on roofing the area leading down to the Santa Venera tunnels, turning it into one of Malta’s biggest urban open spaces.
  • €2 million will be allocated for afforestation programmes.
  • The Malta Stock Exchange will be implementing new initiatives next year to promote the issue of new Green Bonds—these initiatives are aimed to incentivise projects in the sector of environmental protection and sustainable resources and clean energy.

Family & Social Measures


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  • As of this Budget, when buying high-value items including property, cash transactions will be limited to a maximum of €10,000. This forms part of a number of efforts being introduced by government to fight money laundering and the use of enormous amounts of hard cash.
  • A new industrial estate offering commercial property options will be set up in Marsa. A new sports facility and a new recreational zone will also be part of this project.
  • Income tax on overtime is to be reduced to 15% on the first 100 hours above regular hours for those earning up to €20,000 in basic income and who are not in management positions.
  • The cost of living allowance for 2020 will be  €3.49 a week, up €1.16 from 2019.
  • Employees will benefit from an additional day of leave to make up for public holidays that fall on weekends, now up to a total of 216 hours.
  • People earning up to €60,000 will receive a tax refund of between €40 and €68.
  • The reduction of stamp duty to 1.5% on the transfer of family businesses will once again be renewed for 2020.
  • Pensions for senior citizens will increase by an extra €7 a week, inclusive of the cost-of-living adjustment. The tax-free maximum threshold will also be raised, thus ensuring that all government pensions remain tax-free. Low-income pensioners will also get an annual supplementary income of €150.
  • A new financial crime agency will be set up. Known as the Financial Organised Crimes Agency, it will work in collaboration with the existing Economic Crimes Unit.
  • Three new ferry landing points will be constructed in Gozo, as well as new facilities for fishing vessels.
  • As of 2020, government will be providing families with a €300 grant for every new-born or adopted child.
  • Families will be receiving a one-off payment to cover milk and bread price increases. This will amount to €35in the case of families of two or more persons, and €15 for singles.

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to find out more about the property-related measures
announced in the Malta 2020 budget

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