New government scheme will see shops in Valletta leased through a 45 year emphyteusis

Kevin Schembri Orland Thursday, 7 May 2015, 10:25 Last update: about 10 years ago

The new SHOPS scheme launched today by Parliamentary Secretary for Planning Michael Falzon will see certain government properties rented for 45 years.

The scheme will launch next week and will originally affect shops, restaurants and bars in Valletta. All those under the previous schemes will need to switch over. He argued that this will allow those with shops to use them as security when seeking finance.

All shops with a lease will need to switch over to this new ground rent. Valletta is divided into four zones, Zone 1 - pedestrian areas (Republic street and now Merchant street), with tenants being charged 500 euros per sq metre per year. Zone 2 where 300 euros per sq metre will be charged, zone 3 will see 100 euros per sq metre and zone 4 - 20 euros per sq metre.

Those occupying the basement of a building for such use will be required to pay 10% of this and those onabove floors also paying reduced rates.

Currently this scheme will not count for other forms of government property such as offices, however the Parliamentary Secretary hopes that the scheme will expand in the future. It will, however, expand to government properties (shops and catering establishments) outside of Valletta.

He said that the GRTU were on board with this new scheme. Michael Falzon stressed that those abusing government property will no longer do so. He stressed that should a property be rented, the person would be able to rent the property to a third party, with permission by government, however will not be able to divide the property into smaller ones and rent them separately.

As for cases where the person renting the property is currently not the person operating the shop or restaurant, agreement will need to be reached between the two, or all parties involved, and then go to government in order to fall under this new scheme. The government, he said, holds the right to deny permission to rent a property if, for example, someone wants to establish a gentleman's club on Republic Street.

The old scheme will no longer operate and the Parliamentary Secretary said that government reserves the right to use all legal means possible against those abusing government property.

A 500-euro administration fee will be required.