Income and other taxes

Tax refund to individuals

• The tax refund paid in the previous 3 years will be granted again to individuals earning less than €60,000. The refund will vary between €45 and €95, depending on the level of income and tax status of the individual.

Exemption on pension income 

• The maximum amount of exempt pension income will be increased to €14,058. Furthermore, persons claiming married rates will be entitled to a further €3,600 tax free amount in respect of income from other sources.

Further tax credits on private pension schemes

• The maximum amount of tax credits on private pension plans and voluntary occupational pension schemes are being increased. Fiscal measures providing for a further maximum tax saving of €1,500 for single individuals and €2,250 for married couples (where only one of the spouses is in employment) who contribute towards Voluntary Occupational Pension Schemes and Personal Retirement Schemes. 

Tax on assignment or cessation of rights over property

• From 1 January 2021 up to 31 December 2021, any profits or gains (previously capped up to €100,000) arising on the assignment or cessation of any rights acquired under a promise of transfer of immovable property or any rights thereon will be subject to a tax at the rate of 15%.

Reduced tax rate on certain royalty income

• The introduction of a final withholding tax of 15% on royalty income derived from the publication of literary works.

Exemption on certain profits of voluntary organisations

• Exemption on certain profits derived by registered voluntary organisations where the annual income thereof does not exceed €50,000 (subject to the satisfaction of conditions). 

Transfer of business property and securities 

• The reduced 1.5% duty rate on certain intra-family donations of business property and securities in companies has been extended by a further year.

Taxation of property

• First-time buyers of immovable property will now be exempt from stamp duty on the first €200,000 of the value of the property (previously €175,000).
• Continued reduction of stamp duty on the purchase of a residential home for “Second-Time Buyers” in Gozo (reduction from 5% to 2%) and in Urban Conservation Areas (reduction from 5% to 2.5%).
• A reduced stamp duty rate of 3.5% will be applicable for non-first time buyers on the first €200,000 relative to the purchase of a residence. This rate will also be applicable on the first €200,000 of the value of the immovable property (previously €175,000) on inherited immovable property being the residential property of the heirs.
• No stamp duty shall be charged on the first €250,000 (previously €200,000) of donations of immovable property from parents to their children where the immovable property being donated is used for the children’s residential purposes. The additional value of the immovable property is to continue being charged at 3.5%.
• Extension of the reduction of stamp duty on the acquisition of property to 1.5% on the first €400,000 and an extension of the reduction of property transfer tax on the sale of property from 8% to 5%. This is applicable to promises of sale being signed until March 2021 with the final deed of transfer being signed until 31 December 2021.