Budget 2019 included a raft of measures in the property sector which should increase affordability whilst also guaranteeing the long-term sustainability of the sector.
Those over 40s are now in a position to buy property and there will be no more means testing for rent subsidies. The Government is seeking ways to help lower-middle-income earners who are struggling as the property market flourishes. All rental contracts are to be registered with the Housing Authority as from 2019. This agreement is considered to be non-negotiable by the Government.
Means testing for rent subsidies will be waived for lower-middle-income people. The rent subsidy will be raised to €3,000 for single persons and up to €5,000 for families with two children. Landlords who rent out their properties on long lets below the market price will be awarded incentives and they will also receive a substantial discount on capital gains tax if they eventually decide to sell the property when the rent expires.
An equity sharing scheme is also in the pipeline and aimed at those aged 40 and over who are forced to rent because they cannot afford to buy a property. They will now be offered the chance to buy a residence jointly with the Government. They will buy half and the Government will buy half and pay the loan on that half. After the loans have been paid, the tenant can either buy the other half from the Government or else pay rent to the Government.
Schemes for properties in Urban Conservation Areas, schemes for first and second time home buyers and an offer of paying lower duty when buying property in Gozo will be retained. There is also a property equity release which is being issued by the Government whereby people can leave their home to the government in return for being able to stay in a home for the elderly free of charge.
In a statement, the Malta Developers Association noted with satisfaction that a number of incentives for property buyers that were introduced in the past on the suggestion of the MDA – such as those relating to first- and second-time buyers, property in UCA areas and in Gozo – are going to be continued. It also welcomed the over 40’s equity sharing scheme with government.
Additionally, the MDA said that other suggestions have also been taken up by Government, such as the need for incentivising privately owned parking facilities as well as incentivising landlords to make longer leases and other measures to ensure that there is a provision of affordable housing and affordable rents.