Government pushes to improve supply and quality of housing
The 2018 Budget gave special attention to the housing and rental markets, with numerous incentives put in place to bolster supply and increase efficiency. The first-time buyers’ scheme has been extended yet again – those who are buying a property for the first time will benefit from a stamp duty exemption on properties valued up to €150,000.
A second-time buyer’s scheme has been introduced, where those looking to sell their primary residence in exchange for another one can benefit of a stamp duty refund worth up to €3,000. This measure is particularly useful for families who need a larger property due to having more children, or elderly couples who are looking to downgrade because children have left the house.
In order to be eligible for the second-time buyer’s scheme, you must not have any other property than the primary residence looking to be replaced. Upgrades to luxury villas and other luxury dwellings will not grant you eligibility for this scheme.
Government pledged to provide assistance to all those wishing to buy and restore vacant property in the centre of towns and villages that fall under the Urban Conservation Areas (UCAs). To further encourage the use of vacant properties in UCAs, government pledged to reduce the stamp duty from 5 per cent to 2.5 per cent.
The incentive to purchase a residential property in Gozo where a stamp duty reduction was reduced from 5 per cent to 2 per cent has been extended for the year 2018.
No new regulations have been imposed on the rental market, however government has issued a ‘white paper’, where a number of regulatory measures aimed at protecting both the tenant and the landlord are to be discussed. Legislative change is still a while a way, and must go through the normal Parliamentary process, however some measures being contemplated by government are:
– Obligatory registration of each rental contract, without which a landlord will not be protected by the law;
– Contracts must regulate by how much rents can go up and how this will work over the duration of the contract;
– The contract must cover a reasonable minimum period of time, while retaining flexibility for the tourism market and short-lets;
– Implementing a deposit retention scheme reducing rampant abuse where landlords keep deposits despite dwellings being left in could condition;
– Lastly, revision of laws making it simpler and more efficient for landlords to take action against tenants who do not pay their rent or breach their contract.