Two tax concession schemes have been launched to encourage developers to restore old buildings instead of pulling them down to build new ones.
Environment Minister Mario de Marco and Finance Minister Tonio Fenech yesterday launched schemes to promote restoration and conservation of grade one and grade two scheduled buildings and others in Urban Conservation Areas (UCA) that will be sold, rented out or used for commercial purposes.
The first scheme will see people who restore their property pay a 10 per cent tax rate on income from rent for residential purposes instead of 35 per cent. Those who rent for commercial reasons will enjoy a 15 per cent tax rate.
If they decide to sell, they will be taxed 10 per cent instead of 12 per cent on the transfer value, or pay 30 per cent instead of 35 per cent in tax on the gain.
The total tax benefit will not exceed 50 per cent of the total amount of eligible expenditure invested in restoration, provided that the maximum value of tax benefit received for grade one and two scheduled buildings does not go over €30,000 and the maximum value of tax benefit received for UCA buildings does not exceed €20,000.
There are 60 Urban Conservation Areas in Malta and this scheme will be available to 1,000 applications that must be submitted by the end of next year. Only one building per applicant can qualify.
The second scheme targets restoration of commercial properties. Companies that commission this work will qualify for a tax credit of up to €20,000 covering 20 per cent of restoration, conservation or maintenance costs of a building in a UCA, or €30,000 covering 30 per cent of a grade one or two scheduled building.
Applications may close earlier if the€2 million allocated for this scheme is reached.
Dr de Marco said these schemes would encourage people not to repeat past mistakes, where it was more viable to demolish old buildings and build new ones. “Our historical characteristics are part of our heritage and we have to do all we can to preserve our village cores,” he said.
“People are more inclined to live in new premises, creating an urban sprawl. As time goes by, people are living in suburbs, leaving village centres empty.”
More information can be found at www.mepa.org.mt, www.maltaenterprise.com, 2290 1549 or investifdarek@mepa.org.mt.