Maltese Developers Cry Foul On Property Tax Valuations

By ExpatBriefing.com Editorial 19 April, 2012

The Malta Developers Association has called on the government to rethink the valuation of island property for the purposes of levying the 12% withholding tax on property sales, to take into account the falling price of real estate.

The Association claims that property value assessors are informally being requested by the government to value property based on historic values, rather than the depressed market values presently. The Association further says valuations fail to take into account the inflationary impact of the 12% tax on property prices, which it says presents double tax challenges.

The Association has called for a transparent approach from the Ministry of Finance on property valuations to allow developers to sell property portfolios despite the depressed market. Under the current valuation system, the Association said the 12% tax often amounts to more than the capital gain that was intended to be taxed.

Under rules introduced in 2005, which were subsequently amended in 2006, developers selling real estate within seven years of purchase could opt to pay capital gains tax of 35% or a 12% withholding tax on property sales. After this period, the 12% tax rate would apply.

A comprehensive report in our Intelligence Report series dealing with the issues raised by international property investment, and the possible taxation implications raised by such purchases, with an account of the likely (and some less obvious) potential countries for your consideration, is available in the Lowtax Library at http://www.lowtaxlibrary.com/asp/subs_reports.asp and a description of the report can be seen at http://www.lowtaxlibrary.com/asp/description_report15.asp

Tags: Expatriates | Tax | Investment | Real-estate Investment | Malta | Real-estate | Retirement | Offshore | Withholding Tax | Inflation |

 





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