The Housing Authority is optimistic more property owners will recognise the benefits of its new scheme to rent vacant residences from the private sector, it said.

The government is further strengthening this scheme through tax incentives by introducing a reduced withholding tax rate of only 10%

It was reacting to the Malta Developers Association, which criticised the scheme for being too bureaucratic. The association said owners, who would rent their premises to the authority which in turn would then sublease it to tenants at subsidised rates, would lose all control of their property and what happened to it, as was the case at the time of requisition orders.

But the authority clarified that property owners would retain the right to inspect their property and be entitled to hold the authority, as their lessee, to account for any breaches in lease agreements.

Moreover, the authority would, in turn, be enforcing the strict observance of rental agreements to ensure its tenants fulfilled their obligations, respected their neighbours, and kept the place well maintained. Non-compliant tenants risked immediate termination of their contracts.

The authority said it has been operating a rental subsidy scheme, Scheme R, since 1999, through which people could rent property directly from private landlords and apply for a subsidy on their monthly rent payments. About 1,200 households were benefitting from this scheme at a cost of over €1 million annually to the authority, it said.

The government was further strengthening this scheme through tax incentives by introducing a reduced withholding tax rate of only 10 per cent in the recent budget, it continued.

In addition to Scheme R, it has also been investing in a robust development programme to address the disparate needs of its clients.

“Following the property market slowdown and the resultant rise in the number of vacant residential units, the Authority recognised the need to downsize its development programme and tap into the private property market to meet the requirements of its applicants,” it said in its reaction.