Malta's 2019 Budget: What's in it for you? - NM Group News

Malta’s 2019 Budget: What’s in it for you?

Category: Malta

Malta’s 2019 Budget

Following the reveal of Malta’s 2019 budget, it’s easy to get lost in all the hoopla that surrounds new proposals and developments – especially when the main question you want the answer to is ‘what’s in it for me?’ In this blog post we will be breaking down 4 new government incentives that will save you money, as well as a number of developments in technology, the property market and general economy.

Equity Sharing Property Scheme for over 40s

This new scheme will facilitate property ownership for anyone over 40 through purchasing property as a joint partner with the Government.

How would this work?

John is a 46-year-old professional and has been renting an apartment for a few years since separating from a previous marriage. With retirement occurring in less than 20 years, John has found it quite difficult to finance the purchase of an apartment through a commercial bank loan, as the loan can only be honoured until his retirement age.

Through the Equity Sharing scheme announced in the 2019 Budget, John would be able to purchase half the property, with the government purchasing the other half. This would result in more affordable monthly repayments. John would then have the option to either buy the other half from the Government or pay rent on the portion of property owned by the Government.

Reduced VAT on musical instruments

VAT rates on musical instruments has been reduced to 5%.

How would this work?

Gabriel is an 18-year-old student with a passion for music. Over the summer he has been saving up to purchase a guitar that costs €999 excluding VAT.

If he had to purchase the guitar before the 2019 reduced VAT measure kicks in, the guitar would cost Gabriel €1,179 (including 18% VAT). With VAT on musical instruments reduced to 5%, the guitar will cost Gabriel €1,049 in 2019, resulting in savings of €130.

Property transfer tax incentives for property owners

The Government will be launching property transfer tax incentives for property owners renting at affordable prices.

How would this work?

Claire has purchased a second apartment for €190,000 with the intention of renting it out for a number of years and eventually selling it off at €230,000, once it increases in value. Given the scenario, she would have to pay property transfer tax of €18,400 (8% of the transfer value) once the transfer is complete.

With the newly proposed property transfer tax, Claire would pay less than the €18,400 in property transfer tax.

Cost of Living Adjustment (COLA)

  • A €2.33 weekly wage increase will be given as a cost of living adjustment. This is also attributable to pensioners in full and pro-rata to students.
  • Minimum wage workers to get €3 a week over-and-above COLA, provided they have been on minimum wage for at least one year

 

Further to this, the 2019 Budget also promises the following developments:

A rent reform white paper will be released to protect both property owners and property occupants through obligatory registration of properties and rental contracts.
This new government entity will focus on marketing Malta as a hub for digital economy and disruptive technologies.


The addition of an extra day of leave for full-time workers will bring the total number to 26 days of leave per year.

The government will be carrying out 45 actions over the next three years to strengthen the fight against money laundering.

 

Do you have any questions about the 2019 budget? Just drop us a line and one of our team members will get back to you as soon as possible!