The Federation of Estate Agents has called on the government to reduce tax on the property market in view of the current economic scenario.

It said that the present system of capital gains tax on real estate was threatening to further stall market activity.

"In order to secure a properly functioning market, which is attractive to international investors, the FEA is recommending that the system of capital gains on real estate be rendered a flat 15% on realized profits. As a second best option, the FEA is proposing that the five-year period applying to the 12% final withholding tax option should be extended or, ideally, removed," the federation said.

It said that restrictions on the letting out of real estate by foreigners in Malta were limiting market activity and the federation was therefore recommending that such restrictions should be removed.

It also called for the removal of fees and regulations that distort the rental market and said that a favourable tax regime should be introduced to enhance the efficiency of the real estate sector and its economic contribution.

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