The Opposition is urging the government to revoke a Budget measure through which property sellers no longer have the option to choose from capital gains tax or a final withholding tax.

“The present tax regime is unfair, as sellers are being forced to pay tax even if they make a loss,” PN deputy leader Mario de Marco told a news conference yesterday at the party headquarters.

He backed his claim quoting recent statements issued by the Federation of Real Estate Agents, the Notarial Council and the Chamber of Commerce, who all raised concern that this would negatively impact the property sector.

Following the last Budget, every sale of property which has been on the market for 10 years is being taxed at 10 per cent final withholding, whereas the rest is taxed at an eight per cent rate.

The present tax regime is unfair, as sellers are being forced to pay tax even if they make a loss

“In response to this, sellers were raising prices to recoup the tax increase,” the PN deputy leader said.

In addition, the fact that fiscal receipts were no longer required to prove that part of the profit was spent to carry out some expenses, might pave the way for tax evasion, he said.

Opposition spokesman Claudio Grech said the government should have at least given a transition period to allow the property sector to adjust to this measure.

He added that the new tax regime had also negatively impacted bond issues which had been based on profit projection from the property market.