The truth about AD's proposed property hoarding tax

Joe Borg's letter (Tax On Vacant Property Will Raise Prices, September 22) seems to have had the dual purpose of gloating at people deprived of the enjoyment of their property and misrepresenting Alternattiva Demokratika's proposals regarding the taxation from the third property onwards which are completely vacant.

Mr Borg feels smug about the fact that a referendum abrogating the unjust and archaic rent laws has not been held. He ignores the Nationalist government's foot-dragging in this regard and incredibly attempts to blame AD for this ongoing injustice. Mr Borg would do well to note that it is the Gonzi administration which has been fobbing off land-owners for a long time with promises of White Papers and amended laws which never materialise. The MLP has conveniently kept mum on the issue. AD has been the only political party to take up cudgels on behalf of the owners (many of whom are just ordinary people, some of them barley getting by on a miserly minimum pension) who are paid a pittance instead of a reasonable rent.

We come now to AD's proposals regarding taxation on property hoarding. It is an established fact that there are some 40,000 residential units which are vacant. While a good number of them are not on the rental market because they are not in a fit state, many others are not up for rent simply because their owners prefer to sit on them and allow their capital to appreciate. This leads to a great percentage of housing stock - a valuable resource in such a small country - not being available. AD's proposal consists of incentives for this property to be put on the rental market. The idea is that properties which do not constitute one's home or holiday home (villegjatura) will be subject to a flat rate 15 per cent charge on the assumed value of the rent of the property. However any rent received from the property will be tax free. It is a completely avoidable tax. Most people do not own more than two properties and the people who are most likely to be caught in the tax net in this way would be speculators who continue building more units even though there are already many empty ones.

Mr Borg calls Alternattiva Demokrattika's down-to-earth and practical proposals dreamy and unrealistic, yet he does not offer any constructive criticism or suggestions. Instead, he emulates the Nationalist Party which ignores accelerating property prices while benefiting from donations in kind from the same contractors who have contributed in no small way to the problem.