Rent Regulation for a Fairer Society

A coalition of seventeen organisations working in different sectors calls for rent regulation in Malta.

[dropcap]A[/dropcap] coalition of seventeen organisations working in different sectors has launched a document with a Proposal for Rent Regulation in Malta. In a press statement, the coalition criticised the fact that “Malta has almost no regulation in the rental market, and the law of the jungle currently applies. This is forcing many tenants to lead precarious lives, with only temporary roofs over their head and no place to call home. There is a pressing need for rules in the rental market in order to establish some fairness and to create more stability.”

The key points of the proposal are:

1. Creating a national registry of property on the rental market

2. Tax on empty rentable property

Under the proposed model the State would introduce an annual tax on:

Property that can be rented (rentable) but is not placed on the rental market. A separate registry of non-rentable property should be created in which owners will have to choose from a set of reasons as to why their property is not rentable. This should be done according to clear rules to prevent abuse, such as a rule stating that a property owner cannot have more than one summer residence.
Property which is placed on the rental market but is left empty for the largest part ofthe year (for example, more than 6 months over a year)

3. A tax regime that incentivises long-lets through lower tax rates for longer leases

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 over 5 years 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.

4. The contracts are expected to abide by the following rules:

Landowners are to register the first price set in the first contract which will be considered The Initial Price. This value determines the range of capping applied to further increase in rent-price.
Landlords are allowed to increase rent-prices yearly during the duration of a contract only by a percentage that does not exceed the cost-of-living-increase percentage.
The rent-price should reflect the Rent Price Index that lists prices in 1) different areas and 2) for different classes of property according to their size and quality. Landlords are to input in the state registry specifications pertinent to their property. An initial price should not exceed 10% of the price listed for that particular category within the Rent Price Index.
A system for the termination of contracts similar to that outlined in employment law.
Provisions for clear rules on deposited money, payment of utility bills and upkeep of property.
Protection for persons on existing lease agreements.

5. Law should provide a legal standing to a tenants’ union that will be included as one of the
social partners.

6. Provisions on discrimination

People should be legally protected from discrimination based on personal characteristics such as disability, race, gender, age, sexual orientation, religion or belief, etc. in any part of the renting process. Sanctions should apply to any discriminatory practice such as discriminatory clauses in contracts and evictions, or refusal to rent, based on discrimination.

The proposal was endorsed by