The system intended to combat tax evasion in real estate is being revised, giving property buyers the option of appointing an architect of their choice to value their property rather than one being sent by the government.

They can also choose not to appoint an architect at all, in which case the Department of Inland Revenue (IRD) would still carry out verifications to ensure the declared price falls within a certain bracket.

The changes are laid out in a legal notice to be published in the coming days, Finance Minister Edward Scicluna said yesterday.

The practice has been for government architects to be sent to verify that a property’s declared purchase price reflects its commercial value.

Under the new system, this measure will be only taken in exceptional cases when a very low price raises suspicion of attempted tax evasion.

Buyers are no longer being treated as fraudsters

Prof. Scicluna said floor area ratio, the locality and the quality of the views enjoyed would be included in the IRD’s evaluation criteria.

The valuation would also depend on whether the property in question is an apartment, maisonette, terraced house or a villa.

The minister’s announcement came in the wake of a complaint made last week by the Malta Developers’ Association that the new measure, announced a year ago in the Budget, had not yet come into force.

They said a draft legal notice had been ready for months but had not yet been approved due to bureaucratic obstacles.

However, Prof. Scicluna yesterday said that the aim of the reform was to reduce red tape, referring to a World Bank report that had flagged up the highly bureaucratic process in Malta’s real estate sector.

He said a lot of groundwork had been needed to establish clear criteria and a proper mechanism.

“Under this system, property buyers are no longer being treated as fraudsters as those who abide by the law and declare the real market price will not have to go through the previous laborious process,” he said.