The new budget is out.
Despite the general consensus among commentators that there aren’t many surprises in it, everyone is frantically trying to figure out how they might be impacted.
Fear not, for we have compiled a short overview on what the implications for the Property industry might be.
Energy
- Energy subsidies
Energy is the big protagonist of the 2023 budget. For every ten euros of the budget, one will be spent on energy subsidies, or 9.3% of all recurrent expenditures, for a total of €580 million.
These are numbers to watch out for, particularly for its implications for the built environment in matters regarding energy efficiency and energy generation.
- Extension of Renewable Energy Sources & Water Wells Schemes
A total of eight megawatts will be allotted as part of a Feed In Tariff (FID) program for homes with photovoltaic systems that produce less than 40kWp, with the same program continuing for residential homes over a 20-year period.
Schemes for the installation of batteries for renewable energy storage, heat pump water heaters and solar water heaters, and the restoration of old house wells, will also continue.
Measures to assist buyers and renters
- Extension of capital gains tax exemption and property tax
Tax breaks on the transfer and acquisition of certain properties will remain in effect.
Such benefits will include exemption from income tax and stamp duty on the first €750,000 of the value of the property transferred, provided that at least one of the following conditions is met: the building was completed over 20 years ago and has been vacant for over 7 years; is located on an Urban Conservation Area; is built and finished in accordance with).
- Implementation of 1st time buyers’ grant
Delivering on an electoral promise and starting from January 1, 2022, €10,000 (€30,000 if property is located in Gozo), will be granted to first-time buyers over a period of 10 years, provided that the value of the property does not exceed €500,000.
- Extension and modification of the Deposit Payment Scheme
The scheme was originally set up to help those who, despite being qualified for a home loan, lacked the resources to put down the required 10% payment at the time the promise of sale was signed. The cap of the scheme has been raised from €17,000 to €22,500, which would represent the 10% of the maximum refundable amount under the previous and current property value caps (€175,000 and €225,000, respectively).
- Increase in the cap of rent subsidies
This existing scheme to make rent more affordable for low-income individuals and families will undergo an increase in its monthly cap. The cap for one-bedroom houses will increase from €400 to €500, from €500 to €600 for two-bedroom homes, and from €600 to €700 in the case of three-bedroom ones.
Renovation
- Extension of Renovation of Private Sector Buildings Grant Scheme
The Recovery and Resilience Plan scheme will continue to award grants for private sector building renovations worth about €20 million throughout the upcoming year.
- New investment opportunities for renovation works
The Government will issue Expressions of Interest for the Evans Building and the Fisheries in Valletta and the Chalet in Sliema, with the eventual possibility of adding others, in order to revitalize these properties.
Greening efforts
- Urban greening
A new Environmental Agency for urban greening is on the way to coordinate environmental and green urban reclamation projects, the continuation of work in parks, gardens, and open spaces, and valley rehabilitation. Over a seven-year period, the Government has committed to spend €700 million on urban greening projects. In addition, €60 million will be spent on sustainable urban development in Gozo under the Sustainable Urban Development initiative.
- Increase in assistance to businesses to achieve the ESG criteria
Malta Enterprise will create guidelines to help businesses achieve ESG certification. This will include technical assistance from European member states.
Updates and further information about the summit’s developments can be followed on the official blog and on its social media channels.