On the 26th December 2025, two Legal Notices were published, amending the Duty on Documents and Transfers Act.
Amendments to the Duty on Documents and Transfers Act
In line with the announcements made in the 2026 Budget Speech, L.N. 305 of 2025 provides that, with respect to transfers under onerous titles made on or after 28th October 2025, which fall within scope of Article 32(4)(a) of the Duty on Documents and Transfers Act, no duty shall be chargeable on the first EUR 200,000, provided that the person acquiring the property has not previously made any inter-vivos acquisition of immovable property which is used or intended to be used as a residence, and subject to additional conditions.
Whilst in previous years the stamp duty exemption on the first-time buyers’ scheme was extended on a year-by-year basis in the budget speech, this legal notice codifies the exemption into law.
L.N. 306 of 2025 relates to the reduced duty rate on transfers causa mortis of a dwelling house.
Where the property transferred causa mortis is a dwelling house being the ordinary residence of the deceased, and is also occupied at the time of transfer by any of the transferees, the usual provisions apply: duty shall be charged at EUR 3.50 for every EUR 100, or part thereof, on a value exceeding EUR 35,000. As in the past, the first EUR 35,000 is exempt from duty. However, the cap on the reduced rate of EUR 3.50 per EUR 100 now applies to an increased value of EUR 400,000; this cap was increased in the 2026 Budget. If the dwelling house was not fully owned by the deceased, the reduced rate of duty is applied on a pro-rata basis.
Additionally, L.N. 306 of 2025 provides that, where the property transferred causa mortis was not the deceased’s ordinary residence but was occupied by one or more transferees, the reduced rate of EUR 3.50 per EUR 100 applies on the same increased ceiling of EUR 400,000. A pro-rata reduced rate of duty similarly applies if the dwelling house was not fully owned by the transferor.
New 2026 Tax Rates for Individuals
The Malta Tax and Customs Administration has published the 2026 individual personal tax rates. As outlined in the 2026 Budget Speech, four new tax brackets have been introduced. Individuals subject to the married or parent rates will now be subject to different tax brackets, depending on the number of children they have.
Furthermore, Section B of Form FS4 has been updated: employees subject to the parent or married rates must now indicate the applicable tax bracket based on the number of children they have, subject to a number of conditions.
For further information, kindly contact our tax team on directtaxation@bdo.com.mt.