When a couple and/or an individual is buying a property for the first time in their lives in order to be able to use it as their sole ordinary residence, no tax will be due on the first €200,000 of the value of their property. The remaining balance of the price will be taxed at the rate of 5%.
It is crucial to keep in mind that one cannot have any titles (sales, donations, datio in solutuum etc) intervivos (during life) in their names to be able to qualify as first time buyers (expect what will be mentioned hereunder i.e. exemption). In fact, an individual will also be considered to have lost the first time buyer’s scheme just by acquiring a grave.
The only exemption where one would still benefit from the first time buyer’s scheme even if they had a transfer intervivos in their name was only introduced lately through Legal Notice 277 of 2021, effective only for transfers from 9 June 2020. This introduction allows individuals who had already acquired a garage of not more than 30 meters squared before buying their first ‘sole residence’ property to still benefit from the First Time Buyer Scheme when acquiring their residence.
On the other hand, one could have inherited various properties and still be considered as a first time buyer. This is due to the fact that inheritance is not considered to be a title intervivos.
Regards,
Notary Dr. Clara Farrugia Grixti
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