Government to reduce stamp duty from 5% to 1.5% on transfer of family businesses

Finance Minister Clyde Caruana has criticised the Opposition’s proposed income tax measures, arguing that the figures presented by the Nationalist Party do not add up and would create a far greater financial burden than claimed.

He said people expect seriousness and accountability from political parties when it comes to public finances, particularly when proposals directly impact the country’s economic stability.

Speaking about the proposal presented by Adrian Delia, the minister said the PN has “made a mess” of its calculations. According to the presentation, the measure would affect around 300,000 workers and guarantee a minimum annual benefit of €1,200 for every worker.

The minister argued that a simple calculation exposes what he described as a major discrepancy in the opposition’s figures. Multiplying 300,000 workers by €1,200 each would result in a total annual cost of around €360 million.

Caruana also said that from an analysis the cost would be more around the 400 million euro marknot the €110 million to €130 million proposed by the PN.

The minister questioned how the opposition could promise workers a larger annual benefit than the government’s proposals while at the same time claiming the policy would cost substantially less.

“They went astray with the numbers twice,” the minister said, insisting that the opposition’s projections were unrealistic and financially inconsistent.

The minister questioned how the PN could claim it would give workers more money every year than the government’s proposals while simultaneously spending far less.

He argued that the discrepancies undermine the opposition’s credibility on economic management and public finances, adding that “they went astray with the numbers twice.”

No wonder the PN hasn’t replied to my questions on how their objectives are tied to the country’s public finances, Caruana said.

Justice Minister Jonathan Attard meanwhile spoke about a set of business-related measures being proposed that form part of “a responsible and balanced approach towards the economy” that recognises the practical realities faced by businesses while safeguarding fiscal sustainability and legal certainty.

For instance, permanently reducing stamp duty from 5% to 1.5% on the transfer of family businesses between relatives in order to facilitate succession from one generation to another.

“The measures being presented form part of a responsible and balanced approach towards the economy, which recognises the practical realities of businesses while safeguarding fiscal sustainability and legal certainty,” the Justice Minister said.

Attard stressed that family businesses, self-employed workers and SMEs play a crucial role in wealth creation and employment, making it essential for the regulatory and fiscal framework in which they operate to remain “clear, predictable and fair”.

He said experience has shown that succession and business transfer processes can create uncertainty and unnecessary burdens, particularly in sensitive circumstances.

“In this context, targeted changes are being proposed to address these challenges prudently, by reducing administrative obstacles and providing safeguards in situations where the transfer process cannot be completed immediately,” he said.

The minister explained that the proposed measures are intended to support business continuity without creating fiscal distortions or risks, while also offering greater certainty to families and enterprises.

Among the proposals, the government plans to permanently reduce stamp duty from 5% to 1.5% on the transfer of family businesses between relatives in order to facilitate succession from one generation to another.

Another proposal would allow the donation process to be registered from the date the transfer procedure begins, ensuring heirs would still benefit from the reduced 1.5% stamp duty rate if the process is concluded within one year following the death of one of the donors.

Attard described the measures as part of a broader vision of social justice and sustainable economic growth.

“This is the principle of social justice we believe in: an economy that creates wealth and distributes it fairly,” he said.

He added that while the government would continue supporting higher earners, priority would remain focused on the middle class, families and those requiring greater assistance to move forward.

According to Attard, the central message of the government’s economic vision is that a country succeeding economically must also deliver a better quality of life for its people.

“The vision presented is built on stability, responsible leadership and a strong economy that allows sustainable investment in families, businesses and communities,” he said.

He said the proposals are designed to ensure economic growth translates into tangible improvements in daily life through stronger services, guaranteed energy subsidies, annual bonuses worth €1,000, flexible work arrangements, greater support for first-time buyers and tax reductions for young people and families.