None of the residents who benefitted from the previous property scheme had applied for long-term residence and would therefore not have been eligible for social services – a fear raised by the PN in its reaction to the new Global Residence Scheme announced last weekend, according to sources.

Parliamentary Secretary Edward Zammit Lewis pointed out in Parliament on Tuesday that non-EU nationals are only entitled to social services such as health treatment if they have the status of long-term residents, as set out by subsidiary legislation 217.05, and who have resided legally and continuously in Malta for the preceding five years.

There are also other onerous conditions. They could not have been absent from the islands for more than 10 months in the previous five years, have to prove that they have stable and regular resources, and appropriate accommodation. The applicant and any dependent would also need to have medical insurance, he explained, which would eliminate the possibility of being entitled to free health care or any of the social benefits like stipends that were mentioned.

Sources said that the government is also planning to impose another condition, which would prove to be a considerable deterrent to those who wish to apply for long-term residence. They would immediately become subject to normal rates of tax on their worldwide income. The subsidiary legislation that led to the phasing out of the High Net Worth Individual Scheme (introduced in 2011 to replace the phased-out Permanent Resident Scheme) had an immediate impact on sales of property to foreigners, with one industry source saying that close to 100 preliminary agreements were cancelled.

“Although we might be able to get some of these clients back, many of them will already have found property elsewhere,” he said.

These numbers quoted by the source also put into context figures given by Opposition MP Tonio Fenech in Parliament. He said that of the 3,500 properties purchased in Malta in the past four years, only 23 were purchased under the Permanent Residence Scheme. This figure was already released in the past and was met with a huge amount of apprehension by the market players.

The Global Residence Programme requires that the value of property bought in Malta by foreigners be at least €275,000. If the property to be purchased is situated in the south of Malta or in Gozo, the minimum value would be €220,000. Applicants would also be eligible to rent property on an annual basis of €9,600 in Malta or €8,750 in the south of Malta or in Gozo. The requirement to place a bond of €500,000 – considered to be one of the greatest deterrents to the success of the scheme – was removed.

The Government is committed to introducing the necessary subsidiary legislation by the end of June 2013.