MaltaToday: Notaries still in the dark about euro in contracts
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NEWS | Sunday, 23 December 2007

Notaries still in the dark about euro in contracts

Charlot Zahra

Only eight days until the introduction of the euro on January 1, and notaries are still in the dark on whether to use the euro or the Maltese lira for the purposes of calculating the stamp duty that is charged whenever immovable property is transferred.
So far, the National Euro Changeover Committee (NECC), which has handled all aspects of the switch to the single European currency, has not issued any legally binding guidelines to notaries on how to convert the euro in their calculation of the stamp duty applicable on contracts for the transfer of immovable property under the Duty on Documents and Transfers Act (Chapter 364 of the Laws of Malta),
This has led Roland Wadge, the president of the Notarial College, which comprises all the Notaries registered in Malta, to send an e-mail to his colleagues warning them that the authorities still had to give a response about whether values for the purposes of tax were to be rounded off to the nearest Lm100 or to the nearest €100 when calculating stamp duty as from January 1.
In his e-mail, sent on a Friday evening two weeks ago, Wadge said: “Regarding rounding up for purposes of Tax calculation I still cannot confirm whether values for purposes of tax will be rounded up to the nearest €100 or still remain to the nearest Lm100 (or €232.94) even after the entry of the euro, even though the council had communicated with the authorities that this should be the preferred position, that is, rounding up to the nearest €100.
“I will do my best to confirm the position with the powers that be next week,” Wadge concluded his e-mail.
In the case of primary residences, the first Lm50,000 of the value of the property is taxed at 3.5 per cent, while the remainder is charged at 5%. For all other types of residences, the amount of stamp duty that is levied is 5%.
Lawyers who spoke to MaltaToday said that it would not be “proper” to just convert the present tariff from Maltese Liri to euros and apply it as it is without getting into a lot of complex mathematical formulae.
For instance, the Lm50,000 tariff, which is a round figure, would convert to €116,468.67, which is not a round figure and therefore more subject to errors when the tariff is calculated.
Therefore in the case of a secondary residence costing Lm50,000, the amount of tax charged at 5% would be a simple Lm2,500.
However if you had to calculate the tax for the same property in euros, the amount would be €5,823.3835.
“The tariff should be re-calculated from scratch in euros or else it would not make any sense,” the sources insisted.

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