Government u-turn on property sales tax

Notaries in Malta have been left perplexed by a government decision to withdraw a directive on fiscal incentives for property transfers, mere hours after they were published on Tuesday.

In fact, around noon on Tuesday, the Commissioner for Revenue published the new guidelines, whereby government reduced property sales tax from 5% to 1.5% on the transfer of property valued up to €400,000.

The Commissioner immediately disseminated the guidelines to all notaries.

But less than two hours later, the guidelines were withdrawn and removed from the CFR’s website, amid widespread confusion and frustration among notaries.

Notary Clinton Bellizi, president of the Notarial Council of Malta, told BusinessToday that when the CFR withdrew the directive, it said it was seeking further clarification and direction.

“In the interest of legal certainty for both notaries and the contracting parties, and in light of the decision to withdraw the directive, the Notarial Council has directed notaries to continue applying the usual rates of duty and transfer tax until the official legal notices are published with clear indications as to applicability and eligibility,” he said.

And in an email sent to all notaries, Bellizzi advised them to ignore Tuesday’s short-lived directive, “in view of this unprecedented misguidance”.

Bellizzi told BusinessToday he was informed legal notices were currently being drafted and should be published in the coming days.

“Contracting parties will then be able to apply for refunds as applicable,” he said.