Property scheme temporarily suspended due to abuse

The government has suspended a scheme which allowed those who leased a residential property from the Joint Office to "redeem" their home and gain full ownership against a small payment.

The scheme is being reviewed to curb abuse because people were selling off their property at commercial rates after paying the government a trivial amount. It was introduced in 2002 for those who leased Church property that was transferred to the state, following an agreement reached in 1991. In 2004, it was extended to government property that did not belong to the Church.

All this is in the balance after a legal notice was published in the Government Gazette last Friday, announcing the scheme was being "temporarily suspended" with effect from January 29.

"This is being done to ensure that pending applications are processed and finalised," a spokesman for the Land Department told The Times when asked about the legal notice.

"The scheme was extremely successful as it offered an opportunity for people to become owners of their home," he added.

But the scheme allowed people to make huge profits by gaining ownership of their properties for a small sum and then reselling it at commercial value, he said.

Therefore, the system was going to be restructured and redesigned to cater for today's needs while curbing abuse.

This was being done at the expense of the taxpayer, he added, so until further notice, no new applications would be accepted.

He did not give any details as to when the scheme would be re-launched and what would change.

However, it is understood that it would be restructured in such a way that, if a property is sold soon after it is "redeemed", the government will have to be given a percentage of the profit. This will be done to discourage abuse, while allowing people to gain ownership of their properties anyway.

When asked whether the suspension of the scheme would render anyone homeless, he said it was "highly unlikely". He explained that very few would have their ground rent term coming to an end in the short-term.

"The scheme was ultimately a concession and the Joint Office cannot be held responsible for ground rents due to expire in the immediate term," he added as a caveat.

cperegin@timesofmalta.com