New rules to allow 50-year extension of government land leases expiring by 2030

Property owners with expired government leases will be able to extend the concession by 50 years under new regulations out this week.

A legal notice is expected for the first time to lay down at law the conditions for extensions of residential, commercial and agricultural land leases that have expired or will expire in the next seven years.

The rules are expected to address the situation of 1,800 properties.

The scheme will not apply to emphyteutical concessions approved by parliament; concessions exceeding 1,500sq.m (except for agricultural purposes); kiosks; concessions granted following a call by tender; and agricultural or rural lands within the development zones.

Concessions granted on lands and property that are not agricultural leases will have the new ground rent calculated at 2% of the open market value for the specific use. The sum will be revised every 10 years by 10%. In the case of agricultural holdings consisting of arable land, the recognised emphyteuta shall be given a title of agricultural lease (qbiela) and the new rates will be established by the authority.

The market value of the properties will be established by independent architects.

These rules will address a saga that has been dragging on for years, leaving property owners in limbo. Existing laws allow the Lands Authority to evict property owners upon expiration of leases, contemplate an extension of the concession or issue a tender for the land. However, the manner by which the extension is to be granted is not specifically regulated at law, leaving the authority to decide on an ad hoc basis.

Apart from this, the registration of lands and property that had been passed on by the church to the State as part of the 1993 concordat is still ongoing with the result that certain leases have long expired.

The slow progress in registration also means that more properties and lands could eventually benefit from the scheme.

The new rules will give small property holdings certainty for the future, while allowing them to regularise their position for the expired period based on clear rules.

A payment of one lump sum must be made for the occupancy of the land in the cases of expired concessions, under the same terms as stipulated in the original concession.

“This scheme sends out a strong message of certainty to all those whose residential property, fields or commercial establishments faced an uncertain future, who can now apply for this scheme to secure a stronger title and plan on investing further into their holdings,” Lands Minister Silvio Schembri said on Tuesday.

The 50-year lease extension will provide a stronger title that allows individuals to secure bank financing for investment.

The scheme is open to those with expired land leases or those that will expire by the end of December 2030.