Government to pay rental costs for families on pre-1995 leases in major reform

Landlords of properties bound under pre-1995 leases will be able to claim up to two per cent of the property’s market value in rent, in a major reform announced Saturday. 

Government will be paying the additional rental costs thousands of families are expected to face as a result of constitutional challenges to Malta’s rent laws.

Almost 10,000 families will be affected by the reform. 

The total outlay is expected to be €1 million in the first year, €3 milion in the second, and €5 million in the third year.

Pensioners and social welfare beneficiaries in pre-1995 housing leases will have their rental costs covered in full by the state up to a maximum of €10,000 per year, while tenants in full-time employment will pay a maximum of 25 per cent of rental costs.  

Tenants in high-value properties where rent runs to more than the €10,000-a-year limit will be offered alternative accommodation by the state.

Rent will be established by the Rent Regulation Board, which will appoint an architect to value the property in question.

Prime Minister Robert Abela said that tenants affected by the change will be offered help and free legal advice by a new department to be set up within the Housing Authority. “Tenants should not be made responsible for the state’s failure to act quicker and more decisively,” Abela said.

Maltese law bars landlords from refusal the renewal of a pre-1995 lease, and they must contend with ‘fair rent’ controls. But that law was successfully challenged in local courts as well as the European Court of Human Rights.