Capital Gains and Property Transfer Tax

Whether it’s local or international, our conveyance specialists will make light work of each transaction and maximise profit.

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Capital Gains Tax in Malta

Gains realised through the transfer of assets aren’t automatically subject to tax in Malta. It’s only assets that are specified in the Law that attract such a tax. These are mainly immovable property, securities and similar instruments, intellectual property, and going concerns. Such gains are generally added onto the taxable income of the company or individual in the computation of the tax charge. It’s worth mentioning that capital gains occurring outside of Malta are only taxable in Malta if they accrue to taxpayers who are resident and domiciled in Malta.

Property Transfer Tax in Malta

When it comes to the transfer of immovable property, the regime applicable by default is the Property Transfer Tax (PTT), rather than traditional Capital Gains Tax. PTT is actually a transaction cost and not a tax on the element of gain. The rate levied is usually set to a flat rate of 8% of the transfer value or selling price, but there are some exceptions. For example, if the seller acquired the property before 1 January 2004, PTT is levied at 10%. However, if the seller inherited the property before 25 November 1992, PTT is reduced to 7%. The tax is further reduced to 5% if the property is sold within 5 years of acquisition.

How AE can help

At AE, we have a team of tax specialists who are capable of deftly handling all the complexities of capital gains and transfer tax. Whether this involves immovable property or international property rights and shares, we can handle it all. Should you require assistance in the actual conveyancing of immovable property, AE can put you in touch with AE Legal.