Urban Conservation rental properties to benefit from reduced Government taxes

The government in the next few weeks will announce a scheme of reduced tax where properties in urban conservation areas are rented out, Finance Minister Tonio Fenech said today. He was speaking as the government launched a scheme whereby heirs can transfer their share of properties in urban conservation areas to one heir who would be responsible for their restoration. In so doing the heirs would be exempted from the 5% duty on the transfer of the property.

The scheme, originally announced in the Budget, is the second phase of another scheme where the government is issuing rebates of up to 20% on the cost to restore grade I and grade II scheduled properties in urban conservation areas. That scheme had attracted 800 requests for information, but so far only 95 applications have been submitted. Details of the new scheme were announced by Finance Minister Tonio Fenech and Environment Minister Mario de Marco.

The new scheme applies only to 2012 and 2013. Dr de Marco said the new scheme should lead to the restoration and use of properties which have been vacant because of problems between the heirs. He said that in the next few weeks the government will also announce a scheme to encourage the use of the use of these old vacant buildings for residential or commercial purposes.

Mr Fenech, giving a pre-view, said that when such properties were rented out, rather than paying tax at 35%, landlords would pay 15% if rented out for commercial use and 10% if rented for residential use. Dr de Marco said these schemes were giving the construction sector a focus, so that instead of building on virgin land or demolishing old buildings, the developers restored old buildings and put them to use.

Source: The Times of Malta online