Labour leader predicts 'tough times'

The new inheritance tax on property would push up prices and cause hardship among the working and middle classes, Labour leader Alfred Sant said yesterday.

There were tough times ahead for hundreds of families, he said, especially as property prices were already rising.

The finance minister's announcement of a tax on property was the subject of a scathing attack by Dr Sant during a news conference in Mosta.

Property inherited after November 22, 1992 (when the law on succession was amended) would now be subject to tax when sold, like all other properties. Property inherited before November 23, 1992, would be subject to a final tax of seven per cent when sold.

Dr Sant said that one had to keep in mind that property was often the only source of investment for several families. A new tax would put new strains on their pockets.

"Families are being forced to pay an anti-social tax for government's incompetence," he said.

Deputy leader Charles Mangion described the imposition of tax on capital gains as a "huge somersault" by the government.

When the government had introduced the capital gains tax in the 1990s, it had specifically exempted inherited property on the grounds that it was already being taxed through the law on succession.

It was worth pointing out, he said, that properties were often inherited by the children of those that made sacrifices in the 1970s and 1980s. An estimated 65 per cent of all families own a home.

Labour's spokesman for social protection, Karl Chircop, said the government had also cut its expenditure on social housing by 10 per cent, its budget for social housing embellishment was down by 33 per cent and capital expenditure for the Housing Authority down by Lm1 million.