Mark Gaffarena holds a promise of sale agreement on another part of the Valletta property at the centre of a controversial expropriation that enables him to make yet another hefty profit from the next phase of the sale of the building to the government.

He agreed a price of €68,134 for this section of the building – exactly half what he paid for another quarter of the property that he acquired last February.

The agreement was signed last October, before the government had publicly shown any interest in expropriating the property. However, unbeknown to the owners Mr Gaffarena was already in negotiations with government representatives to sell on the property.

Last January, the government bought one quarter of the property from Mr Gaffarena for €822,500 and offered him the same price after he bought another quarter the following month for only €139,762.

The marked price difference led to an investigation by the tax department

The marked difference between the price at which he bought and sold the property has led to an investigation by the tax department.

However, the promise of sale agreement seen by The Sunday Times of Malta seems to rule out any under-declaration on the part of the original owners since any under-declaration is usually done on the public deed once the sale is concluded.

The family that entered into the promise of sale agreement with Mr Gaffarena before the scandal was revealed is seeking legal advice on whether it has any way of getting out of the arrangement.

During negotiations over the staggered expropriation of the property, the government did not contact any of the other owners. Government representatives only dealt with Mr Gaffarena, which allowed him to acquire other parts of the property at a low price since the owners had no idea of the deal.

They agreed to sell it to Mr Gaffarena at that price because it had been rented out to government since 1902 and they could not make use of the property.

The tenant had the right to the property until 2028.