Foreign property investors should be allowed to own more than one property and other tax incentives are needed to shore up
the real estate market in Malta, it is claimed.
The GRTU, the island’s Association of General Retailers and Traders said it is concerned about a collapse of the property market as bad planning has led to an oversupply of ordinary apartments, even in prestigious areas.
Indeed, the latest figures from the island’s National Statistics Office show that property prices continued to drop in the first three months of this year. They showed an average
decline 2.83% compared with the same period in 2008. Apartment prices have suffered the most, dropping 5.26%
The NSO figures also show that sales were down by over 15% and there has been a decline in sales to British real estate investors, possibly due to the unfavourable sterling to euro exchange rate.
‘Property sales have become much more difficult to achieve and investors are losing confidence in the property market, especially with the amount of taxation they are enduring.
Government action is required to ensue that the available properties on the market reach buyers at affordable prices and there is no collapse of this sector,’ the GRTU said in a statement.
It suggested that first-time buyers should be granted a one year concession during which they would not be charged stamp duty on property valued under €120,000 and changes to the system where owners who rent out their property pay 35% tax.
It wants to see this tax reduced to 5% on residential property and 15% tax on commercial property.
It also recommends extending the five-year period in which owners could choose whether to pay 12% tax on the sale price or 35% on the profit by another three years.
Getting rid of the 1% fee paid on the promise of sale would also help as it is discouraging potential buyers. Even although this fee was refundable, many had to wait for months to get their money back, and sometimes never did.
The organisation believes that foreign property investors should be allowed to buy more property. Currently they are restricted to owning just one piece of real estate and developers should be offered incentives to build energy saving buildings.