Momentum calls for vacant property tax to tackle housing crisis

Momentum has called for a tax on the second vacant property onwards to address Malta's housing affordability crisis.

"How are all those citizens who earn less than €40,000, and there are many, going to be assured that they get basic decent housing during their whole lifetime?" Momentum Treasurer Carmel Asciak asked.

Momentum’s proposal comes as a study published last week by Calvin Vella for Solidarjetà, alongside National Statistics Office figures, confirmed that young people and those beginning their careers face extreme difficulty in renting or owning property.

Momentum noted that whilst Housing Minister Roderick Galdes can afford multiple residences in Malta, Gozo, Britain, Sicily and north Italy, and the prime minister, apart from his Marsaskala residence, Zejtun villa and Xewkija bed and breakfast, is rumoured to also have a ranch complete with horses in Sicily, the study clearly shows the majority of locations and regions are not affordable to tenants.

Under Momentum's proposal, a person owning six properties with five occupied would not be taxed on the one vacant property. However, if only four were occupied, they would avoid tax on the fifth property but would be taxed on the sixth, as it would be the second vacant property.

The organisation said this measure would discourage owners from holding empty properties, lower market prices for purchasing or leasing, and generate funds for social housing projects.

The Solidarjetà study analysed 38 household scenarios against median market rents. It found only three scenarios could cover median rental costs, and only with government subsidies. The research showed single individuals on minimum wage cannot afford a one-bedroom flat in any of 20 localities assessed.

Even those earning €35,000 annually are overburdened in every locality for one, two and three-bedroom flats. The study follows the Housing Authority's standard that housing costs should not exceed 25% of disposable income.

The study's recommendations, which Momentum supports, include introducing rent controls through temporary freezes and caps on increases, incentivising long-term contracts, ending no-fault evictions, and compensating tenants for illegal evictions.

A key recommendation is establishing a minimum quota of 30% for social and affordable units in all new developments by 2030. The study argues that market-driven construction alone has failed to meet the needs of both low and middle-income households.