Private Residential Leases – Tax Rebate

Deloitte Malta tax alert

25 June 2020

In terms of the Private Residential Leases (Tax Rebate) Rules, 2020 (Legal Notice 258 of 2020) issued on 23 June 2020 (the ‘Rules’), tax rebates shall be granted with respect to tax levied on qualifying rental income.

Below please find the salient features of the Rules:

  • The Rules shall apply to income derived on or after 1 January 2020 from a private residential lease with a duration of at least two years provided that such lease is registered with the Housing Authority as a residential lease in accordance with the Private Residential Leases Act (Chapter 604 of the Laws of Malta).
  • In terms of the Rules, a person deriving income in terms of article 31D(2) of the Income Tax Act (Chapter 123 of the Laws of Malta), i.e. taxation at the rate of 15% on gross rental income, is entitled to a tax rebate in the form of a deduction against the tax chargeable in terms of article 31D of the Income Tax Act.
  • The tax rebate granted in terms of the Rules is determined by reference to the duration of the lease as well as the number of bedrooms in the leased premises, and can vary from €200 to €500 per lease. The said tax rebate cannot however exceed 15% of the rental income derived in a particular year from that lease.
  • The claim for tax rebate shall be submitted together with the payment of the relative tax due by not later than the 30 April following the year in which the rental income was derived.
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