Tax Reduction Scheme

Aim of the Scheme

The Tax Reduction Scheme offers tax exemption for owners who lease their residences at affordable rents and wish to sell the property to their tenants. It also applies to the sale of properties rented by the Housing Authority under the Nikru biex Nassistu Scheme and Skema Kiri.

Both owners and tenants are exempt from paying tax on the first €200,000 if the lease has been ongoing for 10 years, while leases of at least 3 years qualify for a 50% tax deduction.

Owners and tenants shall submit a joint application, which will be verified by the Housing Authority. Once verified, a certificate will be issued and presented to the notary by the applicants, who will confirm its authenticity to prevent any risk of fraud.

The Housing Authority defines affordable rent as 85% of the median rental market rate, based on the leases registered with the Housing Authority.