The Malta Independent 27 July 2026, Monday
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Daphne On Thursday: Just leave them empty

Malta Independent Thursday, 25 August 2005, 00:00 Last update: about 14 years ago

Many flats and houses stand vacant because their owners cannot be bothered with the angst and problems of renting them out, for small returns, or even for returns that others might consider worthwhile. This is nobody’s business, except their own, and others, like political activists, Alternattiva Demokratika, environmentalists, and letter-writers to the newspapers, should stay out of it.

What is this compulsion that some people have to interfere in everything, even in private property, property which they themselves do not own? Unable to control the houses, flats or land held in private hands, or to seize them in the name of the state and its ‘people’, they strive instead to come up with bossy-boots ways and means of telling the owners what to do with their property.

I can understand that there should be aesthetic controls – and heaven knows there should be more of them – but if a person wants to leave a house or flat empty, then for heaven’s sake, everyone else should stay out of it. It is an individual’s right to leave his or her property unoccupied if he or she wants it that way. It is not something over which the state, or neighbours with socialist inclinations, should have any control.

We all remember how private property was whipped away by the state abusing the requisition law to fulfil the socialist ‘principle’ that people should not be allowed to have ‘spare’ property when others might have none. No one should be forced, through punitive taxes, fear of confiscation, or others means, to rent out property if he or she does not want to do so.

* * *

There are many reasons why people may not wish to rent out the houses and flats which they own but don’t live in. The main reason is that it’s too much trouble. The trouble gets a lot more complicated when the flat or house is held by several members of the same family, who might get Lm20 a month if they’re lucky, which is not even enough to buy dinner for two.

A mediocre flat, even somewhere central and sought-after like Sliema, cannot be rented for more than Lm100 a month, or Lm1,200 a year. Of that, Lm100 or Lm200 go to the broker, up to Lm350 goes in income tax – because income from rent, unlike apparently income from hosting students, is added on to what you already earn from your work – and then there are the costs of maintenance, which are greater when the flat is being lived in than when it is not.

If a person is comfortable enough to own a spare flat, and he or she is working rather than living off a pension, then the chances are that he or she is also comfortable enough to let those few hundred liri go, and to be content with the property’s capital appreciation.

* * *

Those who say that empty properties should be taxed, so as to force their release onto the rental market, don’t know what they’re talking about. First of all, we have a surfeit of properties to rent, regardless of the wild claims that are made in the media and elsewhere. The rental market in market is made up entirely of expatriates who are here for fixed periods of work, young people who have just left home, and separated men who have walked out on their families (or been thrown out) and haven’t yet got their financial act together to buy another place.

That’s hardly a burgeoning market. It turns over regularly, yes, but demand is far from huge. If it were, rental prices wouldn’t be so low. When assessing rental prices, you shouldn’t go on the sums asked for luxurious villas with pools in prime locations – Lm1,000 to Lm1,500 a month – but on the sort of places ordinary people might live in, like flats and houses in side-streets. The rent for this kind of place, at Lm100 to Lm300 a month even in the urban centre, is next to nothing when you consider that Lm500 a month will only get you a shoe-cupboard in a bad street in the major European cities.

In today’s Malta, landlords and letting agents are chasing potential tenants, rather than the other way round. This means that the price is forced lower rather than higher – basic economics – and while it may be good news for those looking to rent, it is further bad news for actual and potential landlords, who already have a disproportionately low return on their capital investment, even at today’s rental rates.

The mad suggestion of taxing empty property to release it onto the rental market will only serve to add to the glut. More property flooding the rental market, without a concomitant and proportionately higher increase in demand, will only force prices down still further, distorting the market and placing property-owners in an unfairly disadvantaged position.

Those who moot this measure say that lower prices will serve as a catalyst for increased demand (thereby forcing prices back up again!), but I don’t think so. It is in the cultural thinking of the Maltese to regard any amount of money spent on rent, be it Lm50 or Lm500, to be a sheer and utter waste of money. Maltese people rent only if they are forced to do so by circumstances – like being thrown out of the family home, or having no family home to start with and not enough capital and income to buy one. They do not rent because it’s cheap and they might as well do so. They would rather save that Lm50 towards something else, and anyone to whom Lm50 is easily dispensed with is not going to want to live in a Lm50-a-month flat anyway.

* * *

Besides, slapping a tax on empty houses and flats will not necessarily leave their owners with no choice but to rent them out, unless the state also puts into force ancillary regulations that will dangerously violate the rights of individuals. For example, it is all very well to tell the owner of a dilapidated house with no bathrooms or kitchen that he or she will have to rent it out or pay tax on it instead, but it is pointless to do so unless the state, turning dictatorial, can also force this person to spend his money – money which he or she may be unable to spare – on renovating it.

Nobody is going to rent a house with no kitchen or bathroom. Another example: a property owner can circumvent the tax stricture by putting his or her flat on the rental market at an unrealistic rent, so that it will stay empty. What is the state going to do then – trample on the liberty of the individual by telling him how much rent to ask for the flat?

Then there is the most obvious way round it: the method employed by extended families which owned several pieces of property, during the requisition heyday of Mintoff’s government. Grandchildren, sons, daughters, nephews, nieces, siblings at loose ends, even distant cousins, were installed in various houses and flats with a camp-bed and a kettle, on a rotating basis, to claim that they lived there should a political protégée of a Labour minister have his or her eyes on the property.

They would behave conspicuously, throwing parties and inviting friends round, so that all the neighbours would notice – and believe me, neighbours had nothing better to do in those days than hang around twitching the curtains. My husband performed this service willingly as a sixth former and university student, because it gave him a great variety of interesting places to live in, rent free.

Now that ID cards are compulsory, and even 16-year-olds have them, it’s easier to do this than it was in the 1970s. You just switch your son’s or daughter’s address to the empty property, and bingo, you don’t have to pay tax on it. This is a practice already much used by the people who have a second home in Gozo, but live in Malta, and who want to pay the reduced ferry fare offered only to residents of Gozo.

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