Notary Public & Commissioner for Oaths

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Urban Conservation Areas

Created on Wednesday, 06 January 2016 14:44

With reference to the preferential rate of duty on the purchase of property situated within an Urban Conservation Area, as announced by the Minster for Finance during the Budget Speech, please find following the guidance note issued by the Inland Revenue Department:

In the case of a transfer inter vivos of immovable property situated within an urban conservation area or scheduled by the Malta Environment and Planning Authority in terms of article 81 of the Environment and Development Planning Act or any Act which may be substituted therefor, the duty otherwise chargeable in terms of the Duty on Documents and Transfers Act shall be chargeable at the rate of two euro and fifty cents on every one hundred euro or part thereof (i.e.: 2.5%) of the amount or value of the consideration for the transfer of the property or of the value of the property, whichever is the greater.

GENERAL TERMS AND CONDITIONS OF THE SCHEME

1) The reduced rate of duty applies to a transfer inter vivos of immovable property when:

  • the transfer is made on or after the 1st January 2016 but before the 1st January 2017 to a person who does not require a permit by the Minister for the purposes of the Immovable Property (Acquisition by Non-Residents) Act.
  • together with the notice referred to in article 51 of the Duty on Documents and Transfers Act, there shall be submitted to the Commissioner for Revenue a certificate issued by the Malta Environment and Planning Authority certifying that the property falls within a development area known as an Urban Conservation Area" (UCA), or is a scheduled property in accordance with article 81 of the Environment and Development Planning Act or any Act which may be substituted therefor.
  • no relief was claimed under this scheme in respect of any previous transfer of the said property.
  • no relief is claimed under article 32C of the Duty on Documents and Transfers Act.
  • there is no intention to demolish the property. The notary who receives any deed of such a transfer shall record in the deed a written declaration to that effect by the person so acquiring the property and the notary shall warn the said person of the importance of such declaration.

2)The person who acquires the property must submit to the Commissioner for Revenue any information, forms and documentation that the Commissioner for Revenue may require by means of a notice in writing within the period, not being less than thirty days, specified in the notice.

3)Relief granted under this Scheme shall be forfeited if at any time during the period of ownership the property is demolished or there is a change in the property or any part thereof whether on account of a reconstruction or conversion such that it does not retain the same character, or in the case of a breach of any condition referred to paragraph (1).

4)When the relief from duty under this Scheme is forfeited as provided in paragraph (3), the reduced rate of duty shall not apply and the duty chargeable on the transfer shall be the duty that would have been chargeable in accordance with the provisions of the Duty on Documents and Transfers Act had the relief under this Order not been claimed and availed of. Provided that the duty so chargeable shall not be less than the duty already paid when the property was acquired.

5)In the event that duty on a transfer becomes chargeable in accordance with paragraph (4), the excess, if any, of the amount of the duty so chargeable over the amount of duty that was paid on the deed of that transfer shall become payable to the Commissioner by the person to whom the transfer was made: 

  • if the person who acquires the property fails, without reasonable excuse, to submit to the Commissioner for Revenue any information, forms or documentation requested in a notice in writing within the period, not being less than thirty days, specified in that notice, immediately upon the expiration of that period;
  • if the property is demolished after the date of acquisition, on the day the demolition works commence;
  • if there is a change in the property or any part thereof whether on account of a reconstruction or conversion such that it does not retain the same character, on the date the reconstruction or conversion works commence.

Source: Inland Revenue Department

 

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