Bogus addresses for Malta’s IIP applicants can be reported to police

Applicants of the Individual Investor Programme – Malta’s €1.15 million passport scheme – risk being reported to the police if addresses supplied by their agents to Identity Malta, do not correspond to their real, physical address.

Justice minister Owen Bonnici said in parliament that the abusive use of properties and their addresses for IIP applicants can be reported to the police and Identity Malta, risking the refusal of the application for the acquisition of a Maltese passport.

Bonnici said a new Address Management System that Identity Malta had introduced in 2016 had made it harder for anyone to register for a residence permit under a bogus address, or an address which belonged to someone else.

In 2016, Identity Malta set up a compliance unit to investigate potential abuses after a MaltaToday investigation found properties registered to new citizens appeared to fall below the threshold of prices.

MaltaToday’s story – “Letterbox millionaires – Not all Malta’s golden passport buyers are buying €350,000 property” – made reference to a number of IIP citizens whose properties were clearly not falling either within the €350,000 acquisition mark or the €16,000 annual lease value.

In an investigation carried out by the Regulator of the IIP, it turned out that in the 13 cases selected by MaltaToday, 11 had leased their premises and in six of these cases the lease value was “nearly equal to the threshold” save for a €200 difference.

The regulator said this statistic implied the figure had been rounded upwards so that the rental would be in line with the IIP rules, or that the applicants had specifically selected a property that did not significantly exceed the minimum €16,000 threshold.

Subsequently to MaltaToday’s report, Identity Malta started to request accredited agents to provide a qualified architect’s declaration to confirm the values of the properties being leased and purchased; and has set up a Compliance Unit tasked with monitoring and investigating potential abuses.

The agents contacted by the IIP regulator even admitted that some of the properties purchased or leased by their clients might actually cost less, because there were not enough properties on the market to be leased out at €1,350 per month and so they were pushing up the prices of places that cost less. “They remarked that if a client was willing to pay more for a property whose value is less, why were they (the agents) obliged to intervene?”

But the regulator noted that this assertion was incorrect, finding 2,152 properties on the online database of one of the main estate agents being leased at €1,000-€1,500.