In a reaction to reporting on the drop of promise of sale agreements during 2022, the head of the Estate Agents Section of the Malta Developers Association (MDA), Michael Bonello, dispelled fears of the performance of the property market.
Mr Bonello explained that December 2021 was the closing date for the reduced tax and stamp duty incentive schemes that were first introduced as a temporary measure during the COVID-19 pandemic.
“We had seen a massive amount of market activity generated directly through those incentives,” said Mr Bonello. He informed that December 2021 was a record month when compared to the same month in all previous years, “this was an exceptional increase that none of us was realistically expecting to keep going on after the incentives were to be stopped.”
Through the COVID-19 incentive schemes, sellers were able to pay a reduced five per cent property tax rate instead of eight per cent, and buyers could pay a 1.5 per cent rate on the first €400,000 of a property’s value in stamp duty, instead of five per cent.
This sentiment was shared by the president of the MDA, Michael Stivala, who said that current market activity was normal due to the conclusion of the COVID-19 schemes.
It was further explained that the COVID-19 incentives had then been extended to June 2022, which extended the buoyancy of the market for the first few months of that year.
“Whilst there is persistent talk of a ‘property bubble’ from various quarters who may be motivated to push this narrative, our experience on the ground is that there is no credible sign of this happening any time soon,” concluded Mr Bonello.
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