Property rent: Muscat to reduce final withholding tax to 15%

Labour Party leader Joseph Muscat said that a future government would reduce the final withholding tax on rent from 35% to 15% and reopen consultation with stakeholders on the Permanent Resident Scheme.

Addressing a seminar organised by Labour's Business Forum on the construction and property sector, Muscat said these were two of the proposals the party intends to propose in the coming weeks.

On the final withholding tax, Muscat said the party's proposal was to incentivise the rent market. "This proposal will not only incentivise the market, but will see an increase in government revenue and a reduction in tax evasion," he said.

Muscat added that incentives given by the Nationalist government to those renting property to the Housing Authority set at a rate of 5% would be retained.

The second proposal unveiled by the Labour Party was to review the Permanent Resident Scheme.

Muscat said this commitment would be carried out in the shortest time possible. "We do not agree with how the PRS was reviewed and we intend to reopen consultation. We expect that adjusting the PRS will provide a fresh foreign injection to the property sector."

He described the two proposals as "an injection of courage in the property sector".

During the seminar, Muscat heard how the MEPA reform resulted in more bureaucratic problems for the client and an increase in tariffs.

He described the two proposals as "an injection of courage in the property sector" and said that his party's proposals would be over and above the incentives that already exist today.

Replying to questions raised by architects and property developers, Muscat said that the higher MEPA tariffs resulted in less income.

Muscat also said that in the coming weeks the PL would be discussing the dual role played by MEPA as an environment and planning authority.