A normalisation of property sales in Gozo

Activity still remains at a good level after the preferential stamp duty scheme on property purchased in Gozo came to an end.

The preferential stamp duty scheme on property purchased in Gozo ended this January after it had been in operation for more than seven years. Figures published by the National Statistics Office (NSO) show that while there was a decrease in the number of promise of sale agreements registered in February compared to previous years, activity still remained at a good level when compared to that before the scheme started.

Last month, 107 promise-of-sale agreements were signed regarding properties in Gozo. This was 15 less than the number signed in February last year. On average, in the months of February when the scheme was in place, the average of promise-of-sale agreements was 126. This means that in the past month activity was 15% below this seven-year average.

While this may seem like a significant reduction, one needs to consider that, before the scheme, in February 2016 the number of promise of sale agreements that were signed was only 75, or about 30% less than last month. Furthermore, in February 2012, prior to the change of administration, activity was restricted to just 32 promise of sale agreements, or 70% lower than the number observed this year.

As a proportion of all agreements signed last month, those on property in Gozo accounted for 9% of the total. In contrast, before the scheme started, this proportion was only 5%.

Activity in the Gozo property market during February of several years

 2012201620172018201920202021202220232024
Final deeds5073110119190197160190137137
Promise of sale327584121158104154139122107

While new promise of sale agreements for properties in Gozo now have the same stamp duty as for the rest of the country, final deeds relating to agreements signed before the end of January will still pay the preferential stamp. Thus, there is a considerable backlog before the scheme’s end affects the number of final deeds of sale. For instance, in the two months before the scheme ended there was a noticeable acceleration in the number of promise of sale agreements: 364, or about 30% more than the average observed during the other months during which the scheme was in operation. Therefore, in the coming months one expects the number of final deeds of sale relating to property in Gozo to remain significant.

In fact, 137 sales contracts were signed in February, the same number observed last year. Thus, Gozitan properties made up 14% of sales last month, whereas before the scheme started the proportion was around 8%. 

That said, the real estate market in Gozo had already started to moderate in 2023, with the number of apartments sold reaching 553, versus 747 the previous year. The number of apartments sold in 2023 was the lowest observed since 2018. 

With the removal of the preferential stamp duty on property purchased in Gozo it is expected that this trend will gain further momentum.

Photo: Daniel Cilia/Times of Malta

0 0 votes
Article Rating
Subscribe
Notify of
guest
0 Comments
Inline Feedbacks
View all comments