How the 2017 Budget affects property buyers and sellers
The Hon. Minister Edward Scicluna read out the 141-page Budget over nearly three hours and, as usual, we Maltese differed greatly over whether there was any merit in the measures put forward. The 2017 Budget was heralded as a social budget intended to help the more vulnerable, or derided as a budget that will not bring about real change.
Perhaps we can all agree on the fact that, overall, largely positive measures were introduced with regards to property sales, however whether these measures will be enough to cope with the property market remains to be seen.
All we seem to be hearing about lately is how property prices are shooting through the roof. The Central Bank’s data shows how property prices have increased by an average of 24.8% between 2013 and the first quarter of 2016. Whilst this is good news for property sellers, apart from the spectre of a property bubble, it has understandably led to spreading concern amongst buyers.
So how has the Budget 2017 impacted property sellers and buyers?
First Time Buyers
Buying your first house is meant to be a momentous and happy occasion. The time when you can officially mark your move into adulthood as you leave home. However, with property prices spiralling upwards, it can also be an uphill battle to find a place you can afford.
Thankfully, the government has extended the First Time Buyers scheme for another year. If you are planning to buy your first residential property in 2017, you will benefit from a stamp duty exemption, to the tune of €5,000, on the first €150,000 of the cost of the property.
Property in Gozo
Have you been thinking of buying a property in Gozo? It could be your perfect start or the fulfilment of your dream to have a second home on the island, somewhere to enjoy those idyllic weekend breaks.
2017 suddenly became the year to take that leap.
The stamp duty on buying residential property on Malta’s sister island has been heavily reduced, for only one year. You will benefit from a reduction in the stamp duty rate from 5% to 2%. This will apply if you register a promise of sale agreement with the Inland Revenue Department by the end of 2017, and if you conclude the final deed of sale by the end of 2018.
Calling all would be renovators
If you were staring at a photo of a beautiful, slightly rundown property that you would love to buy but cannot afford to renovate, this Budget might just be what you need.
The government is prepared to reimburse first time buyers for up to €100,000 spent on restoration work done on Grade 1 or Grade 2 properties or those in urban conservation areas.
This measure promotes the idea of sustainable urban regeneration, because Malta’s historic towns and villages are worth protecting as part of our cultural heritage. Properties that are architecturally important are unfortunately very costly to restore, so this measure gets a thumbs up as it addresses this need.
Planning to build a property?
The government has introduced or increased the excise duty on construction materials. Whilst this will definitely impact large scale projects, the Malta Developers Association has warned that it will also negatively affect first time property buyers, or small consumers who want to build a property of their own. This measure is the only negative point in this year’s Budget for property buyers and sellers.
The final verdict
It is three to one in favour of property buyers and sellers this time around.
Taking all the above factors into account, it is clear that this might be the optimum time for you to put your property on the market. On the other hand, if you want to buy a property in Gozo, you should definitely get on to it. If you are a first time buyer looking to buy and/or renovate a property, you can also consider the 2017 Budget a bonus card for the year ahead.
The final verdict is, without a doubt, a positive one.