Malta has long experienced an astronomical increase in rent over the past years. With international corporations moving to the Island has led to a large demand and led to increase in rents across the country. To tackle this, the Government of Malta has recently published a property rent reform to cap rent increases amongst others.

The Property Rent Reform in Brief

  • Home rental contracts will have a 1-year minimum duration
  • Rental increases capped at 5% for multi-year contracts
  • Landlords will receive tax credits for long-term contracts
  • Every rental contract must be registered
  • 3-month notice for tenants
  • The housing Authority is tasked to enforce the reform
  • Reform expected to come into force in January 2020
  • Amnesty period for landlords to come in line with the new regulations

The property rent reform aims at tackling the increase in rents but also to control and minimise the large amount of rental income on the black market. The reform also includes more security and better rights for tenants.

Rental Increases Capped

The reform does not interfere with the market pricing directly, so it will still be subject to the free market pricing, but it does provide tenants with more security when it comes to rental price increases capped at 5%. No more rental price surprises for existing tentants.

Contract Durations

The minimum contract duration for rentals will now be one year. This, together with the new notice periods, will offer tenants a lot more security and stability. If the notice period is not adhered to by the landlord, the contract will automatically renew for another year.

For room renting and short lets, the reform is targeting persons who do not intent to stay on the Islands for a longer period of time and introduces there for a six-month contract period.

Contract Registrations

Every rental contract would now have to be registered with the Government in order to better control the market and reduce the black rental market. If the contract is not registered there will be no incentives applicable.

Furthermore, the contracts must also include a full overview of the furniture and fixtures in the apartments to make any disputes easier to tackle.

Notice Periods

The reform introduces a three-month notice period during which they can inform tenants if their contract will be renewed or not. If the tenant is not informed before this time, the contract will be renewed automatically for another year.

Cancellations

For one-year contracts, the tenant has the right to cancel the contract after 2 months with a notice period of 1 month. For contracts of 2 years and over, the notice period is doubled.

Tax incentives

The landlords will be eligible for tax credits of €200 for a 2-bedroom apartment, €300 for a 3-bedroom apartment and €400 in credit for 4-bedroom apartments and over. Three-year contracts will give an additional €100 in tax credits.

Evictions

Upon evictions, landlords had to take tenants to court in order to receive payments due. The reform now introduces the right to demand payment for the period tenants stayed in the property during the dispute.