Environmentalists support developers’ pre-Budget proposal of taxing derelict property but object to their insistence that vacant housing should be excluded from such a measure.
In the pre-Budget proposals presented to the government, the Malta Developers’ Association suggested that the government should give a two- to three-year transition period to allow people to restore dilapidated properties before imposing a deterrent on those who fail to do so.
However, association president Sandro Chetcuti stressed that derelict properties were distinct from vacant properties. He argued that the use of a vacant property was up to the individual, who might be holding on to it as an investment or a gift to family members.
But Astrid Vella from Flimkien Għal Ambjent Aħjar highlighted that fact that vacant properties constituted a burden on the taxpayer through the provision of services such as water, electricity and drains.
If gathered together, vacant properties would amount to a town nine times the size of Birkirkara, Ms Vella pointed out.
Over-development in Malta also added to air pollution, contributed to physical and mental health problems and added pressure to develop outside development zones (ODZ).
“This means that far from being a personal issue, as claimed by Sandro Chetcuti, property ownership entails social responsibility. All property must be used judiciously, not just old properties.”
The NGO agreed with the MDA’s stand that measures needed to be taken to solve the problem of unused and deteriorating old property. However, the measures also needed to respect the rights of property owners rather than forcing them to sell to developers at knockdown prices, Ms Vella said.
A holistic package of incentives would include mediation and other incentives for families caught up in inheritance squabbles. These would comprise stamp duty rebates on sales carried out within a reasonable time period, so as to discourage unresolved issues dragging on for years. There also needed to be a system of subsidies and grants for owners to repair deteriorating properties and make them habitable again.
Martin Galea De Giovanni, chairman of Friends of the Earth Malta, said that while the NGO agreed with the principle of taxing derelict properties, the measure should not be used as a way to push families into selling properties where they were unable to do, so as to become development magnets at a cheap or unfair price.
Such taxes should be reinvested in supporting the regeneration of village cores and schemes such as the Investi f’Darek which helped home-owners repair old balconies and houses.
Considering the size of the island and the precious little open land left, the government should do its utmost to prevent vacant properties from serving as an investment. If an individual preferred not to sell a property, then he should be given an incentive to make use of the property by renting it out, he said.
Environmentalist Michael Briguglio also stressed the fact that speculation needed to be addressed.
The latest census of 2011 indicated that one-third of buildings in Malta were vacant or derelict, a marked increase over that given in the previous census of 1995 which put the figure at one quarter.
This increase further highlighted the pressing need to regulate the property market, including addressing the issue of undeclared rent, Dr Briguglio continued.
Referring to Mr Chetcuti’s argument that owners or developers might wish to keep vacant properties as investment instead of depositing money in the bank, Dr Briguglio pointed out that money in banks was also taxed.
“I’m not advocating draconian measures, but measures which would incentivise good use of property such as, for instance, imposing a tax upon three or more such properties.
“But I definitely agree with measures to reduce the number of derelict buildings. If the government introduces such a measure, we could see consensus reached between developers and environmentalists.”