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A new rule has been introduced into Maltese VAT legislation imposing a VAT charge on the letting of immovable property for a period of less than thirty days. Prior to this amendment, the letting of property was (with the exception of certain types of letting listed under numbers 1 to 4 below), exempt from VAT.

In terms of the new rule, VAT is due on short term (less than 30 days) letting of property made by a person carrying on a business (‘taxable person’) where the property is let in the course of such business. However, the following types of letting are excluded from the scope of the new rule - in other words they are exempt from VAT:

• short term letting of premises used for artistic or cultural activities
• short term letting of premises for residential purposes
• short term letting of garages, stores and similar facilities

Persons carrying on a business (individuals and companies) who lease property for less than 30 days should ensure whether their lease is subject to VAT or exempt. The new rule on short term letting does not affect the current rules on taxable types of letting, which are the following:

1. provision of tourist accommodation and letting of licenced premises – (taxable at a reduced rate of 5%)
2. letting of premises for parking
3. letting of permanently installed machinery
4. commercial letting by a company

The above types of letting are subject to VAT irrespective of the duration of the lease period.

For further information please contact This e-mail address is being protected from spambots. You need JavaScript enabled to view it or This e-mail address is being protected from spambots. You need JavaScript enabled to view it .