Welcome to Belair Real Estate Malta
Welcome to Belair Real Estate Malta
Malta Chamber disappointed with Non-Residents Scheme property connotation
It is very disappointing that the Permanent Residency Scheme was spun into a property issue, as it was made very evident that this was not the case, John Huber, Officer of the Malta Chamber of Commerce, Enterprise and Industry told The Malta Business Weekly yesterday.
Commenting on a statement made by the Minister for Finance, Tonio Fenech, in parliament on Tuesday, where he said that the scheme which was suspended on 24 Decemberlast year was never intended exclusively to sell property, Mr Huber said the scheme had various benefits, and not limited solely to the real estate sector.
As a matter of fact the presence of Gino Cutajar, chairman of the Importers, Retailers and Distributors Economic Group and Julian Mamo, chairman of the Services Providers Economic Group, as well as Malta Chamber president, Helga Ellul, during last Monday‘s press conference indicated that the impact was not related only to real estate, he added.
These sentiments were echoed by Ian Casolani, chairman of the Real Estate Business Section within the Chamber of Commerce, who told this newspaper that various sectors would feel the spillover effect of the suspension, not just real estate.
The scheme provides economic benefits across the board, the Chamber said in a statement, and thus its suspension is a serious issue, detrimental to a number of sectors, including legal and financial services, tourism, as well as construction and real estate, not to mention philanthropic organisations.
“The effect of the suspension of this scheme is so big that one cannot quantify it, not even the Ministry can do this,” Mr Huber said.
Last Monday Mr Huber said that the scheme had to be reinstated in order to restore international confidence in Malta, after the three months since its suspension, which have been spent in “limbo”.
Mr Fenech, who was replying to a parliamentary question made by Labour whip, Joe Mizzi, went on to claim that the scheme was rather intended to draw people of certain prosperity to Malta.
He said that it had to be revised due to cases of inaccurate advertising and people taking advantage of the scheme, by becoming Maltese residents with all the benefits that it brings.
Replying to the claims of reports of inaccurate advertising of the scheme, Mr Huber admitted that such cases existed, but said that at the end of the day this was no reason to just suspend the scheme.
After all, the control ultimately lies with the permit, which must be issued by the Commissioner at the Inland Revenue Department, he said, and it is wrong to issue a suspension, which affects the whole industry.
The sudden suspension of the scheme is not the way to do things in a serious financial centre, Mr Huber said, as the scheme has been advertised on various sites, and this has created much uncertainty.
Now because of the furore that has arisen over the matter, even those who are present holders of the scheme are worried about the conditions changing and affecting them, he explained.
Many of them have taken a huge decision in leaving their country and buying property in Malta. There are a number of open-ended questions, which need to be answered, such as whether taxes will be increased and for whom, Mr Huber said.
“So far we have not been told what the new conditions of the revised scheme will be, but we have only been given indications, and these indications are tantamount to killing the scheme,” he admitted.
Commenting on claims made by Minister Fenech that the revised scheme is to be presented in the next few weeks, Mr Huber was not hopeful, as this is not the first time this promise has been made.
A number of applications originating from Iran are believed to be the reason behind government‘s decision to unilaterally suspend the Residents Scheme for non-EU nationals indefinitely. The suspension occurred on 24 December 2010 and affected all foreign nationals originating from outside the European Union.
The Malta Business Weekly last month reported that a “sizeable amount” of property sold to non-European Union nationals remains in limbo until government revokes the suspension of the Non-Residents Scheme and foreign nationals would be able to apply for a residence permit once again. Various estate agents had “sold” a number of properties in the five designated areas in Malta and Gozo and these remain hanging in the balance waiting further developments with regards to the Non-Residents Scheme.
The Non-EU Residents Scheme will remain suspended until a solution is found to the “Long-Term Residence” which is granted to non-EU nationals who spend more than five years in Malta.
According to an EC directive, non-EU nationals who purchase or rent a property in Malta according to the established criteria are automatically eligible to a longterm residence permit after five years.
A permit issued to non-EU citizens through the Residents Scheme Regulations provides the permit holder with the right to reside on a permanent or indefinite basis in Malta. Resident permit holders qualify for a 15 per cent flat rate of income tax and access to Malta‘s taxation treaty network. A residence permit does not confer Maltese domicile.
The main conditions for eligibility to become a resident in terms of the Regulations are that the applicant purchases or rents property in Malta and must have an annual income of at least EUR23,300 or capital equivalent to EUR349,000. Applicants are also required to purchase a property with a minimum price of EUR69,000 or rent at EUR4,150 per annum.