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Private Residential Leases (Tax Rebate) Rules

Private Residential Leases (Tax Rebate) Rules

Lessors shall be entitled to a partial/full rebate of the 15% tax on rent from private residential leases of a duration of at least 2 years.

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Anthony Pace

Partner, Head of Tax

KPMG in Malta

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Lessors who derive rental income from private residential leases of a duration of not less than 2 years and who opt to be taxed at the final tax rate of 15% (in terms of Article 31D of the Income Tax Act) shall be entitled to a tax rebate. Such is made possible through the publication, on 23 June 2020, of Legal Notice 258 entitled Private Residential Leases (Tax Rebate) Rules, 2020.

The Rules apply in respect of income derived on or after 1 January 2020. In determining the duration of the lease, no regard shall be made to any period of renewal or extension of the original period. The lease must be registered with the Housing Authority.

The tax rebate will be in the form of a deduction from the tax chargeable at 15% on the rent from each lease, as declared in relevant form (currently form TA24). The amount of tax rebate ranges from EUR200 to EUR500 (pro-rated in case of leases that start/end during a year) depending on the duration of the lease and the number of bedrooms of the leased premises, capped at 15% of the rent.

The Housing Authority shall be providing the details of the qualifying long private residential leases to the Revenue Department.

Private Residential Leases (Tax Rebate) Rules

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