A proposal for rent regulation in Malta has been released by a group of 17 Maltese organisations. The document outlines a model for rent regulation in a country where property and rent prices have spiralled out of control.
“Unlike most European Union countries, Malta has no effective rent regulation system in place. This means that tenancies are unstable and rent prices increase without any consideration to the impact on individuals, society and the economy,” the group said.
They also said that vulnerable groups such as the elderly, low-income groups, and youths would be hit the hardest.
The group presented a list of rent regulation proposals that they believed were successful in other European countries and applied them to the local setting.
They are guided by 6 main principles
- The fundamental human right of persons to adequate housing and to have a place they can call home
- Enhancing stability and peace of mind for tenants and landlords, and avoiding situations of precariousness
- Establishing rights and obligations for both tenants and landlords
- Increasing the availability of long-lets for people who want to settle in a particular unit as tenants.
- Retaining the landlords’ right to both set an initial price as well as increase the rentprice over the years, whilst ensuring that this happens in a regulated manner
- Incentivising the placement of empty properties on the rental market
They have a new tax system for leases
There would be four types of leases under the group’s model. It incentivises longer lets for people who want to settle.
● Short-lets: 0 to 2 years – taxed at 25%
● Medium-lets: 2 to 5 years – taxed at 20%
● Long-lets: 5 to 10 years – taxed at 15%, minus 1% for each additional year up to 10 years
● Longer-lets: More than 10 years – taxed at 10% minus 0.5% for each additional lease-year, up to a reduction of 5% tax
They also want to tax empty property
There would be an annual tax on empty properties under their proposal. Properties that remained empty for over half of the year would also be taxed annually.
Contracts would have new rules
The proposal creates a legal framework regulating the drawing up of contracts and the prices therein:
- Landowners caught renting without a valid contract would be sanctioned
- Tenants who report landowners for illegalities should be protected from eviction
- A landlord cannot annually increase the rent price by more than the cost-of-living-increase percentage
- When a new contract is drawn up the price cannot be raised more than 10% of the last monthly rent
- Deposit money could be deposited at a public entity, and not the landlord. If the landlord wants to take a tenant’s deposit he/she will need to provide ample evidence for doing so
- All contracts should be registered in a national registry
And there should be anti-discrimination protections and a tenant’s union
People should be legally protected against discrimination based on personal characteristics such as disability, race, gender, age, sexual orientation, religion or belief in any part of the renting process.
There should also be a tenant’s union that is recognised by law.
A Rent Price Index would also be established
To avoid abuse, the government would establish a Rent Price Index that lists prices in different areas and for different classes of property. Landowners would need to input their property’s details into the national registry.
The seventeen organisations are:
Alleanza Kontra il-Faqar
Forum Komunita’ Bormliża
Malta Tenant Support
Malta Humanists Association
The Millennium Chapel
Żminijietna – Voice of the Left
Malta Gay Rights Movement
The Critical Institute
Women’s Rights Foundation
African Media Association Malta
Koperattiva Kummerċ Ġust
Third World Group Malta