Tax Measure Has Pushed Up Maltese Property Prices
by Robert Lee, Tax-News.com, London
22 November 2004

The president of Malta’s Notarial College, Victor J. Bisazza, has criticised the government’s position on capital gains tax, saying that the imposition of the 35% tax on the sale of inherited property (previously exempt) has helped to push up property prices considerably in the jurisdiction.

"Inheritors who had no choice but to sell their property put up their prices to make up for an increase in taxes," Mr Bisazza commented, noting that prices have risen by about 40% as a result of the tax, the Times of Malta reported.

According to the Times, a pre-budget deal reached between the college and Parliamentary Secretary Tony Abela last year was intended to lead to the replacement of the existing capital gains tax with a final withholding tax of between 7% and 10%. However, the government has since decided that the tax would be retained and extended to all inherited property, much to the college’s consternation.

"With such high taxes, it is no longer profitable to sell property which has been inherited. Our warnings have materialised and we have been proven right," remarked Bisazza.

He also deemed the rate to be excessive compared to other countries.

"Even where it is 35% or slightly more (as in France), there are fair and reasonable amortisation rates which reduce the gain over a passage of time - nullifying it over 10 years for example," Bisazza observed.

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