Notaries refusing to process UCA property tax

Malta’s notaries are refusing to process any property taxes on rates introduced by a legal notice for properties in the urban conservation area.

Malta’s Notarial Council unanimously instructed notaries to process all property contracts and taxes due in line with standard laws, before the Council obtains all necessary clarifications from the finance ministry on the new scheme.

“Notaries must be in a position to give clients legal certainty, without any part of their contract being subject to some penalty because of this scheme’s serious shortcomings.

“Ignoring this directive could result in additional taxes or penalties due on future property transfers, the responsibility of which would be borne by both the original parties and the notary, due to the lack of clarity of this legal notice,” the Council said.

Under the legal notice, no income tax and no duty on documents and transfers is payable on the  first  €750,000 of the value of any property transfer made after 12 October 2021. When the value exceeds €750,000, the income tax and duty on documents and transfers on the excess will be chargeable at regular rates, but the portion of the transfer value relieved from income tax and duty on transfers shall be deemed to constitute the first part of the transfer value.

This rule applies to property transfers on buildings constructed at least 20 years before date of transfer; vacant property on the date of transfer for at least seven consecutive years.

But the property transfers are tied to a condition that these properties are not subequently demolished by the aquirants.