In effect as from January 1st 2015, one final withholding tax of 8% of the property value was placed on the property transferred, replacing the 12% final witholding tax and 35% tax on profit or gains.
There are currently two exceptions to the above withholding tax system for property in Malta, as follows:
- The first exception is in the case of idividuals who do not carry on the business of property trading. In this case the final withholding tax rate of 5% is applied on the value of the property transferred if the property is transferred within five years of its acquisition.
- The second exception is in the case of properties acquired before the January 1st 2004, or else if a promise of sale or transfer for a property was not received by the Commissioner before the 17th November, 2014, the applicable final withholding tax rate shall be 10% of the value of the property transferred.
A transfer of property, not forming part of a project and not made by the owner of an SDA project, made on or after the 1st January 2015 in respect of which a notice of a promise of sale or transfer relating to that property had been given to the Commissioner before the 17th November, 2014, and which is transferred to the same person or persons appearing on the said promise of sale agreement before the 1st January 2016 may be excluded from the Final withholding tax system if the transfer is made not later than twelve years after the date of the acquisition of the property.
In the case of a transfer of property acquired before the 1st January 2004 in respect of which a notice of a promise of sale or transfer relating to that property had been given to the Commissioner before the 17th November, 2014 the applicable final withholding tax rate shall be 12% of the value of the property transferred unless the previous paragraph applies and the transfer is excluded from the Final withholding tax system.
