The Maltese Housing Authority announced the introduction of a new rental scheme. Eligible property owners classifying under this scheme will be guaranteed a lease for a period of 10 years. Gains arising therefrom in favour of the lessor will be subject to tax 5%.
The Maltese property market has long been sought by investors looking for non-cyclical long term capital investments. The market is characterised by steady growth; house prices nearly doubled during the period for the year 2000 to the year 2007. Although the onset of the global financial crisis saw prices fall by 12%, Malta property prices have rallied once again and are recovering steadily.
During December 2011, the Maltese Housing Authority announced the introduction of a new rental scheme. This will see a significant increase in the demand for tenements for let as property owners will be eligible to lease their property to the government. The properties will then be sub-let to third parties who qualify for social assistance. Rent will be paid to the Maltese property owners from the government at commercial rates, determined on the basis of a decision of an independent board. The location of the Malta property and its size are factors considered in determining the rent payable by the government. Eligible property owners qualifying under this scheme will be guaranteed a lease for a period of 10 years. Gains arising therefrom in favour of the lessor will be subject to tax 5%.
The terms of the sub-lease will subject sub-tenants to a number of strict conditions intended to safeguard the property from damage. Sub-lessees will be subject to immediate termination of their lease where a breach of the agreement occurs. The legal owner retains the right to inspect the property, and may hold the Housing Authority to account where the terms of the sub-lease are breached.
