Issue link: https://maltatoday.uberflip.com/i/885114
maltatoday, TUESDAY, 10 OCTOBER 2017 Budget 2018 8 Housing and the rent market A White Paper will be pub- lished to address the recent price hikes in the rental mar- ket, with a promise not to in- troduce rent controls. The recent price hikes have resulted in a drastic increase in the number of people who are finding it hard to make ends meet. Such tenants are "not poor enough" to benefit from subsidies but are "not rich enough" to live comfort- ably. The government is thus planning the publication of a White Paper with the promise of zero rent control. The idea is to create a solid legal framework that aims to be fair with both tenant and landlord. The White Paper, which will be up for consulta- tion, proposes the obligatory registration of the rent con- tract. Failing to do so, the landlord won't have any legal protec- tion. The contract would regu- late the amount by which the rent would increase and the period of time. The White Paper will propose a discus- sion to increase the minimum rental period, which currently stands at six months – whilst retaining "the f lexibility" for short lets and the tourism market. In a bid to protect the ten- ant's deposit from a land- lord's abuse, the government proposes a deposit retention scheme where the government will act as a middleman for the security deposit paid by the tenant. Another proposal is to re- vise the law and make it easier for the landlord to take steps against tenants who breach the contract or fail to pay the rent. Increasing social housing property Building up on a scheme first launched last year, the gov- ernment will be widening the thresholds of those who will be able to benefit from rent subsidies. Moreover, elderly persons aged 65 and over will enjoy special thresholds. In just a month, the Housing Authority received 200 appli- cations from owners putting their property up for social housing. The scheme, which sees the Housing Authority renting the property from pri- vate owners for 10 years, will be open for a full year. Additionally, the Hous- ing Authority will be offer- ing financial assistance of up to €25,000 to owners of un- used property, helping them to restore the property with the condition that these are rented out to the authority for 10 years. This scheme will be open to the first 100 proper- ties and the property must be rehabilitated in six months' time. Through EU funding, the authority will spend close to €16 million to install lifts in some 109 blocks of apart- ments. The spend is over and above the planned regenera- tion and maintenance of fur- ther property used for social housing. From social housing to residences for the elderly In a bid to free unused so- cial housing property – or social housing property that is being used illegally – the government will be reduc- ing the fee that is paid by the elderly who are now residing at St Vincent de Paul. There are multiple situations where a pensioner retains the key to a social housing property, despite having moved into the elderly care residence. In a bid to get back the key, instead of the usual 80% cut from the pension, an elderly person who returns the key to the Housing Authority will only have 40% of their pen- sion deducted. The scheme will apply to any residence for the elderly, including private and church homes. Depending on the pension level, an elderly person will be able to save up between €1,350 and €2,700 that would have otherwise been used to cover their stay at an elderly care residence. Bank of Valletta to join social loans scheme Like APS Bank, Bank of Val- letta will start offering social loans to 100 prospective own- ers. The aim of the scheme is to help more people become owners of their property. Priced at a reduced interest rate, the APS loan currently provides successful applicants with up to 100% financing for amounts not exceeding €100,000 and will not require saving up for a front contribu- tion. Introducing the second-time buyers scheme Whilst extending the first- time buyers scheme – ex- empting tax duty on the first €150,000 – the government will be introducing a scheme for second-time buyers. The scheme will apply to homeowners, who own just one property and decide to sell it, to buy a second one. The property owner will ben- efit from a tax reduction, with a maximum of €3,000. Per- sons with disability will ben- efit from up to €5,000. The government will re- tain the financial support of- fered to owners of property in Urban Conservation Ar- eas (UCA). Preserving a UCA property will translate into a stamp duty of 2.5% – as op- posed to 5%. A 2% stamp duty will also be offered to those who buy a residential property in Gozo. Using a property to increase pension or income The government will set up a working group to discuss the introduction of equity release facilities, by which a person would receive a monthly in- come for their property from a financial institution. The institution would gain own- ership of the property at the passing away of the owner whilst the heirs would receive the remaining balance that would not have been paid to the owner in time. Affordable rents: White Paper to address the new gap EVERY pensioner is to get a pension increase thanks to a weekly €2 rise in both contributory and non-contributo- ry pensions. Over 90,000 pensioners will benefit from the budget measure, which is ex- pected to cost some €9 million, accord- ing to Finance Minister Edward Sci- cluna. Moreover, the government is increas- ing the threshold of non-taxable pen- sions to €13,200. Over 4,500 services pensioners will receive an increase of €200, at a total expenditure of €1 million. Elderly persons aged 75 years and over, and who continue to reside in their own home, will continue to receive an extra €300 allowance. Pensioners who continue working after reaching retirement age, and who are still paying their national insurance arrears, may benefit from a new system which cal- culates their pension based on the arrears which would have now been covered. Pensioners who have not yet reached 65 years of age, and who work part- time, will as from next year start paying 15% national insurance from earnings. The government will next year issue once again the savings bonds targeting those who turn 62. All pensioners to get an increase