Reform will ensure seriousness in rent sector but not through strict regulation, Muscat says

The rent reform will ensure that the renting sector will be characterised by seriousness but will not involve any strict regulation, Prime Minister Joseph Muscat says.

Strict regulation will only contribute to more vacant dwellings since property owners would be unwilling to rent, he added.

Speaking in an interview on One Radio, Muscat implied that the new rent reform will have the best interests of both the property owners and the tenants in mind.

"In other countries, there are strict regulations in this sector. But we can't go from no regulation to overcooked severeness. Previous Maltese governments who introduced strict regulations engendered two scenarios: one, owners who had invested money in their property were unwilling to rent, fearing losing control of their own property—this resulted in a lot of vacant dwellings; two, the government lost a number of cases in court for impinging on the rights of property owners, resulting in policymaking that disintegrates in a matter of months," Muscat said.

To avoid such situations, Muscat said that the rent reform would be incentivising those property owners who followed the rules.

"Tenants can't be forced out or have their rent price increased unless they are informed at least three months before this happens. Contracts will be registered through blockchain and pricing cannot increase by more than 5% in a single year.

"If a property owner is contracted to rent to a tenant for two to three years and the price is fixed, the government will give a tax credit to that property owner depending on the size of the property, the contract length and the price," Muscat said, adding that this was a landmark reform.

He said that he couldn't be sure that these incentives would prove effective since there was no precedent for such a reform.

Muscat announced that this reform would be tabled in parliament in the coming weeks and that the government was willing to continue to listen to possible amendments despite a long consultation period.

Muscat was also pleased to announce that the unemployment rate in Malta had diminished to an all-time low.

"Only 1,700 people are unemployed in Malta. This is a historical record," he said, adding that new investments, including in the medical cannabis sector would ensure a further 700 new places of work.

Muscat added that these would be places of high quality work conditions and wages in this sector would be higher than average.