News

MDA insists its Budget proposals as agreed before general election

Saturday, September 16th, 2017

The Malta Developers Association presented a substantial document with concrete proposals for Budget 2018, some of which can be implemented immediately.

MDA President Sandro Chetcuti, who headed a delegation of Council members, augured that the Prime Minister and his Government would continue to achieve further progress and success in its endeavours to take the country to the next level. He praised Government’s initiatives that have truly brought the best of times in terms of employment and a booming economy.

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Both PN leadership contenders request meeting with MDA

Sunday, September 10th, 2017

The two Nationalist Party leadership contenders, Dr Adrian Delia and Dr Chris Said, held separate meetings with the Malta Developers Association Council. The meetings, held at the request of the two candidates, turned out to be two long, fruitful discussions.

Both Dr Delia and Dr Said acknowledged the good work of the MDA and its highly valid contribution to the country.

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older news

MDA calls for less bureaucracy and more fiscal incentives to promote property ownership

Malta Developers Association President Michael Falzon was one of the keynote speakers at a Business Breakfast with the theme The Property Industry… where is it going? held at the Palace Hotel on 11 October.

The other speakers were Angelo Xuereb, President of the Federation of Building and Civil Engineering Contractors, Perit Vincent  Cassar, President of the Kamra tal-Periti, and Trafford Busuttil, Chairman of the Real Estate Business Section of The Malta Chamber of Commerce, Enterprise and Industry.

Among those in attendance were Finance Minister Tonio Fenech, who made the closing remarks, and Labour MPs Roderick Galdes and Perit Karmenu Vella, who took part in the lively discussion that followed the presentations.

Perit Falzon called on government to:

  • promote sustainable development by avoiding bureaucratic procedures and the application of policies in a narrow and bureaucratic manner;
  • reconsider the tariffs for development applications, which have become exaggerated and can be considered another tax instead of the simple payment for services to applicants; and
  • reconsider the Capital Gains Tax, which is one of the highest in Europe.

The new permanent residence scheme, introduced after the unnecessarily long nine-month period of reconsideration, laid down two impracticable conditions for non-EU citizens: the payment of a €500,000 bond plus a further €150,000 for dependents and the condition that they need to live for at least three months a year in Malta.

Foreigners who want to own property in Malta did not want any tax preferences or permanent resident status, Perit Falzon argued. So much so that of the 6,000 properties sold to foreigners in the past three years, only 123 were bought by people who wanted to enter the scheme. It is developers of a certain stature whose projects started with the sale of land from which Government was paid a lot of money who are going to be hardest hit.

The building industry needs to be stimulated not subsidised, Perit Falzon affirmed. Particular attention should be paid to tariffs on developments in:

  • urban conservation areas (UCAs), where development should be encouraged; and
  • villa areas where open spaces are being calculated as if it were being built. In this way overdevelopment of these areas is being encouraged.

The MCA is calling for a change in the procedure in which government appoints architects to value property after the sale contract has been concluded since the current procedure is leading to unjust fines:

  • government-appointed architects cannot be impartial since their client is the government; and
  • whoever needs to sell cheaply for reasons of liquidity or other business commitments is being punished.

The MDA is suggesting that the choice to pay 12% on the price of sale or 35% on the capital gain should remain permanent. It also calls for the lowering of CGT from 12% to 7 % for:

  • new buildings that reach the highest targets for the EU Energy Performance of Buildings Directive – these certainly cost more since there are higher expenses for insulation and double glazing;
  • buildings in ucas where a number of properties are being vacated daily – government needs to encourage investment in these areas; and
  • contracts with first-time buyers.

With the Federation of Estate Agents, the MDA is asking for the introduction of a system of Final Withholding Tax on income from rental of residential properties so that the rental market can continue to grow and there will be a greater use of vacant properties with incentives for these to be modernised.

The MDA is recommending that the 1% up-fr0nt payment on promises of sale be removed and an administration fee of between €50 and €500 be introduced depending on the value of the promise of sale. This is because in many transactions a lot of research is needed before the contract can be drawn up and to remove the invonvenience of government having to refund the money when the contract is not signed.

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