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Alternattiva Demokratika – the Green Party yesterday presented its first set of proposals on rent reform by tackling the thorny issue of the inheritance of rents from deceased tenants to their heirs.
An archaic system that allows heirs to inherit a rented pre-1995 property without changes to the rent they pay the landlord, AD said the system must be abolished, except in the case for spouses. It is now proposing that income from rents is taxes at a flat 15 per cent and penalties for any evasion become harsher: “Government should send a clear message to the market that it is encouraging rent by rewarding the honest but castigating those who attempt to evade even a low tax rate such as 15%,” party chairperson Harry Vassallo said yesterday.
The first proposals follow up on AD’s referendum campaign to gain some 30,000 signatures to call for a referendum that abrogates Malta’s rent laws.
AD yesterday said it wanted the inheritance of leases to be abolished, with a limited right to the passage of the title of rent to the members of the immediate family only in exceptional cases. “This must be recognised to be a burden on the landlord which must be borne either by the tenant and, in his or her default, by the state,” Edward Fenech, spokesperson on the economy said yesterday.
The abolition of leases would mean persons living with their parents would not be able to keep on paying the same rent as that paid by their parents. They will either have to accept a new rate set by the landlord, or else have to move out of the house if the landlord decides not to renew the rent.
In order to safeguard the investments of deceased tenants in properties which were never carried out by their tenants, AD proposed that landlords pay the heirs the total value of legal improvements to a rented property carried out by the deceased tenants. “The landlord will either pay the heirs the improvements made to the property less 5 per cent for every year since the improvements were made, or translate that same value as depreciated into an additional period rent in lieu.”
In order to determine the value of improvements beforehand, Fenech said AD was proposing that within a period of one year every tenant must declare whether any improvements have been made to the property rented. “The tenant must have them certified and valued by an architect. Improvements have to be certified to have been of a nature that appreciated the value of a property.”
In a third proposal, AD yesterday said that in the case of commercial properties used for non-retail purposes such as warehouses and stores, the party was proposing complete liberalisation of these leases with a six-month grace period to be given to the tenants, who have the option of extending the lease for one year upon payment of a fair rent in advance. “Thereafter the landlord shall have the right to take repossession of the property.”
Green Party chairperson Harry Vassallo yesterday said it was shameful that government did not maintain “its many promises” to publish a White Paper when it was expected in January 2006. “It is a disgrace that government chooses to play petty politics with this matter that has caused tremendous pain to thousands of people on whose back government had ridden for over 60 years.”
Vassallo called government’s behaviour “cowardly” and said its “insensitive procrastination” and the Opposition’s complete silence were “shameful acts of crass immaturity by a political class locked into stalemate by their greedy quest for votes.”
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