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Malta’s Home Equity Plan For Pensioners Hits Snag Due To Lack Of Interest By Banks 

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Plans to allow pensioners to partially sell their homes while still living inside them have been put on hold due to a lack of interest by local banks, Finance Minister Clyde Caruana has admitted.

Malta has been planning a Home Equity Release scheme for several years, with then Social Solidarity Minister Michael Farrugia saying in 2015 that it could be a solution for pensioners who are at risk of poverty but who own valuable property assets.

It was formally launched in 2019, with then Finance Minister Edward Scicluna saying pensioners will be able to liquidate up to 60% of their property while still living in it until their death.

Pensioners would be able to enter into a contract with a bank and take out a loan in exchange for regular income, giving them extra cash in hand for the remaining years of their life. After their death, the bank would then take control of their assets. 

However, Caruana said during a recent interview with Mark Laurence Zammit that while home equity release initiatives work “really well” overseas, Maltese banks were skeptical of it.

“Some discussions were held with the banks but it doesn’t seem there was a lot of interest; one bank was slightly interested but the others weren’t interested,” he said. 

“We must see why this was the case and whether this scheme can work in Malta. Just because an idea works somewhere, doesn’t mean it will work in Malta too. For example, renting is popular in Europe and America because people move around a lot, but it’s different in Malta.”

“The way we think is different, so just because a concept works in a specific country doesn’t mean it will work here too.”

Do you think such a home equity release scheme could work in Malta? 

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Tim is interested in the rapid evolution of human society and is passionate about justice, human rights and cutting-edge political debates. You can follow him on Instagram or Twitter/X at @timdiacono or reach out to him at [email protected]

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