Further incentive schemes launched for property restoration

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Further incentive schemes launched for property restorationThe Minister for Tourism, Culture and the Environment Mario de Marco together with the Minister of Finance the Economy and Investment Tonio Fenech have today launched two tax concession schemes to further stimulate investment in restoration and conservation of Grade 1 and Grade 2 scheduled buildings and buildings within Urban Conservation Areas (UCAs) for the purpose of selling or renting as well as such buildings used for commercial purposes.

The statement said that these schemes form part of the larger package of financial incentives announced in the government budget for 2012 with the aim of promoting sustainable urban regeneration.

Under the scheme for the restoration of properties for the purpose of selling or renting, persons or companies that restore their property scheduled in grades 1 and 2 or property within a UCA for the purpose of selling or renting within the eligible period starting from 20th December 2012 until 31st December 2014 shall be entitled to the tax concessions enacted through articles 31C, 5A(5)(d) and 56(9)(c) of the Income Tax Act (Cap. 123) as follows:

1. A10% rate of tax on income from rent for residential purposes and 15% on income from rent for commercial purposes; and

2. In the case of sale, a final tax of 10% instead of 12% on the transfer value, or the payment of 30% tax instead of 35% on the gain.

The total tax benefit as detailed in (1) and (2) above shall not exceed the maximum of 50% of the total amount of eligible expenditure invested in restoration, provided that the maximum value of tax benefit received in respect of a Grade 1 and 2 scheduled building shall not exceed €30,000 per beneficiary and provided further that the maximum value of tax benefit received in respect of a building in UCA shall not exceed €20,000 per beneficiary.

Furthermore the total amount of benefits received by any beneficiary under this and all other de minimis schemes shall not exceed €200,000 over the applicable 3 year financial period, and provided further that the above tax benefits shall be claimed before 31st December 2015.

The minimum size of eligible expenditure in restoration and conservation that shall qualify for assistance under this scheme shall not be less than €5,000.

Due to limited funds, this scheme is being made available to a maximum of 1,000 building/applicants on a first come first served basis. Only one building per applicant is eligible to qualify for support under this scheme.

In cases where the work carried out is not in compliance with this notice or to the satisfaction of authorities involved in the management of this scheme, the authorities reserve the right to reduce the size of the applicable benefit/s under this scheme.

Eligible expenditure that may qualify for this incentive includes the cost of works related to restoration, cleaning and maintenance of the facade, repair or replacement of doors and apertures, repair or replacement of traditional wooden/masonry balconies, paint and plaster works, consolidation and restoration of the internal building structure that includes repair or replacement of ‘xorok’ and timber/steel beams, arches and ‘kilep’, reconstruction or maintenance of roofs and wells.

Costs of materials, labour, hire of equipment, professional fees (the latter include architect’s fees, specialist consultancy, project management costs capped at maximum rate of 5% of the total restoration costs), as well as MEPA permit fees and other government charges that are directly related to restoration would be eligible for the grant.

A Government Notice to this effect, which explains in detail the provisions of the scheme has been published today in the Government Gazette.

Applicants will have until 31st December 2013 to apply for this concession in accordance with the process described in the Government Notice and in the relevant guidance for applicants available from the MEPA website www.mepa.org.mt.

The scheme is being administered jointly by MEPA and the Inland Revenue Department (IRD). Further information regarding the scheme may be requested by phone on 22901549 or via email on investifdarek@mepa.org.mt for queries about applications, restoration methods and MEPA permits and on phone number 22962296 for queries about tax matters.

In the coming weeks, MEPA together with the IRD will be holding a number of public information sessions to explain the details of the scheme.

The second scheme announced today aims at stimulating investment in restoration of commercial properties. This scheme aims to promote the restoration, conservation and maintenance of Grade 1 and Grade 2 scheduled buildings and buildings within Urban Conservation Areas (UCAs) that are or shall be used as commercial premises.

Companies that commission such works shall qualify for a tax credit of up to:

1. €20,000 covering 20% of eligible costs for the restoration, conservation or maintenance of a building in a UCA; and

2. €30,000 covering 30% for the restoration, conservation or maintenance of a Grade 1or Grade 2 scheduled building.

This incentive shall be available until the 31st December 2013, yet may be closed earlier if the allocated funds of €2 Million are fully committed at an earlier date. Applications shall be received as from 2 January 2013.

All the necessary information, guidance and application forms in relation to this scheme will be available on www.mepa.org.mt and www.maltaenterprise.com.

The measures are aimed at promoting sustainable urban regeneration and reversing the trends of residential vacancy, dilapidation and urban decay.

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    10 Responses

    1. James A. Tyrrell says:

      Whilst the restoration and reuse of old buildings is an excellent idea isn’t it a pity they didn’t think about that before spending close on 100 million Euros on a new Parliament building designed by a foreigner! A case of do as I say not as I do.

    2. John Edwards says:

      James, please tell me; do you ever have any positive thoughts?

      • James A. Tyrrell says:

        I’m assuming that was a rhetorical question John so I’ll let it pass unless of course you would like to be the latest Gonzi supporter to try and justify the spending of so much money on something that was basically illegal. This project violates Malta’s Structure Plan which states: “Parliament and ministerial offices must make use of existing palaces and auberges in Valletta whilst an administrative centre will be built outside Valletta to house all Government departments.” Now is there some part of that you don’t understand John because your beloved Gonzi obviously either didn’t understand it or just plain and simple ignored it in order to satisfy his own arrogant needs.

      • John Edwards says:

        Obviously not then

      • James A. Tyrrell says:

        I take it that’s your way of saying, no I can’t justify the spending on the new

    3. Pat Holtom says:

      James A. Tyrrell Please refer to your original comment.

      • James A. Tyrrell says:

        With all due respect Pat if you have a question ask it. I have better things to do with my time than play silly little games.

    4. Pat Holtom says:

      Alright James, I will ask you a question….. Why are you so fixated with Maltese politics?

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