High-end properties on demand as IIP applicants reach 400

As applications for the Individual Investor Programme (IIP) reached 400 – at an investment of €450 million – in less than a year, demand for high-end properties is on the rise.

Applicants are required to make an investment in property of at least €350,000 or enter a property rental contract for at least €16,000 p.a. both on five-year contracts.

According to Kevin Deguara, of Re/Max, the majority of IIP clients start by renting out properties and, rather than looking at the prices, the clients start by looking at the property.

“If they like the property then we talk about prices. We have several who are renting but we also have those who become attracted to Malta’s lifestyle and opt to purchase a property,” Deguara said during Breakfast News on ONE TV.

He said that the most properties in demand are high-end properties in designated areas such as Portomaso, Fort Cambridge and Tigne Point. Also in demand are villas, farmhouses and property in Gozo.

Although the entry level is of €16,000 a year, the average rent paid by the IIP applicants is of €40,000 p.a. according to Deguara. He however confirmed that there was a lack of high-end property selection for rental purposes.

He said that clients have spent as much €3 million to acquire a property in Malta.

Lawyer and IIP accredited agent Michael Frendo, former Nationalist minister, said IIP clients managed by his firm were individuals of “immensely high quality”.

“As a firm we ensure that the people we are presenting to Identity Malta have the necessary credibility and integrity. The prerequisites of this programme means that individuals need to be extremely wealthy,” Frendo said.

Based on the meet he has presented to Identity Malta to acquire Maltese citizenship, Frendo said some had come over because they were interested in the programme; others wanted to discover Malta.

“Some of them would have never about Malta so we try and encourage them to look at investment, commerce or to make use of our financial services. The people who opt for this programme are financially successful people who know that part of their investment is retained by the state,” he said.

Frendo explained that his firm refused to accept online applications and a lot of research and filtering of applications takes place.

“Reputation is very important. It is better to lose a client than the reputation,” he said, adding that Malta’s reputation was a key attractive feature of the IIP.

He added that a substantial number of IIP applicants were interested in conducting business on the island. Others who have also introduced Maltese products in the market.

Upon submission of an application to Identity Malta, the applicant must pay the due diligence fees, passport fees and a deposit of €10,000 on account of the €650,000 contribution, less any payments made on applying for residency.

Applicants are also required to invest at least €150,000 in bonds or shares from time to time approved by the Maltese Government to be kept for at least five years. This investment will need to be made in stocks sanctioned by the government as beneficial to the Island.

Capped at 1,800 applicants, the government has also set up a National Development and Social Fund, to receive the compulsory contributions.

Identity Malta CEO Joe Vella Bonnici said that the biggest demand was coming from East Europe, Asia and Gulf.