The Malta Developers Association is happy. So that’s all right, then.
The Malta Developers Association has “welcomed” the government’s decision to oblige those who buy Maltese passports to also:
1. buy a piece of real estate in Malta valued at Eur350,000; or
2. rent something for Eur16,000 a year for five years.
We were not told originally how long they have to keep their real estate once they have bought their passport. Can they put it back on the market immediately?
No, they have to keep it for five years.
So after five years they can sell it and the money will leave the country with them once more. Some investment in Malta.
They are not obliged to live in Malta or make Malta their primary or even secondary address, so they’re not going to care what they rent or buy.
Then after five years, all the real estate they bought is going to come onto the market in a single, solid glut. Just as 1,800 pieces of real estate all sold or rented in the space of a couple of years at most is going to inflate prices terribly, so having them all come onto the market at once will depress prices five years later.
It’s all swings and roundabouts.
But really, how many are going to bother with the hassle of buying (for Eur350,000) when they can rent instead (for Eur80,000)?
That it is the Malta Developers Association who are happiest says a great deal. They’re happy because a price tag of Eur350,000 is just their market.
13 Comments Comment
Leave a Comment
According to the government, a citizenship cannot be revoked once it is granted.
So, what are they going to do if a purchased property is resold before the five years are up?
At any rate, the supposed capping at 1800 shows that the government was misleading everyone – including the European Parliament – when they spoke of €30 million a year (Scicluna even mentioned €8 million).
1800 passports are equivalent to €1.17 billion in the government coffers – hardly the unimportant amount that government is trying to make us believe.
The Citizenship for Sale Mark II is not different from the original scam in its fundamentals.
The price of the passport and citizenship has remained the same, at Eur 650,000. And the passport will be given outright, for the cash.
The prime minister has added onto that a figure of Eur 500,000 which has to be temporarily parked by citizenship buyers in SPECULATIVE investments (property and government bonds) which can be liquidated at any point after 5 years – although it is still not quite clear to me if this time restriction applies only to the portion of Eur 150,000 which applies to the bonds.
The price of the SPECULATIVE investments is unlikely to go down, and they can be used to earn rentals and interest. So the citizenship buyers will not only be able to earn an annual financial income from the Eur 500,000, but will get a full return of the Eur 500,000 investment once it is liquidated, and possibly make a speculative profit as well.
Which means that under the Mark II scheme, the net price of citizenship could turn out to be cheaper than Eur 650,000 after 5 years.
The scheme still has no element of foreign direct investment in local enterprise operations that create jobs and growth opportunities while establishing a long-term bond between the ‘investor’ and the local economy.
Instead, the scheme continues to guarantee a gift of Eur 650,000 per passport to the Labour government which it can spend as it deems politically convenient. And then there is at least 1,800 new Labour votes, before taking into account family and relatives.
Mark II is even worse, my dear Ciccio.
Because instead of lining Henley & Partner’s pockets, it will now line the pockets of our own, home-grown, Maltese fat cats. To put it plainly, iz-zaqq h**a tal-kuntratturi se tikber iktar.
Astrid must be THRILLED.
Bastards. Vile, evil scum, the whole lot.
I don’t even know why the PN spent twenty years conniving and assisting in the ascent to power of the kuntratturi, when they only gave back a pittance in donations to the party.
Most of the donations went to Labour.
Simon Busuttil had better learn from the mistakes of the past. Ditto for the hunters’ lobby. Did they vote for the PN? Did they f***.
Or the Outer Harbour deserving cases, who were showered with handouts by Lawrence Gonzi? Did they f*** too.
Mistra is only 900 apartments. We need another 900. A land reclamation project, perhaps?
1800 properties at Eur 350,000 is equivalent to Eur 630 million.
If these applicants are not legally obliged to set foot in Malta, then these rented properties cannot be considered to be their residence.
It’s therefore probably possible for the sponsors of Applicant A, to rent a property for €16,000 a year, sub-let it to Applicant B, for the same amount, and share the costs.
But of course the Malta Developers Association would be the happiest of all with the new regulations regarding the purchase or renting of properties by passport-buyers.
It’s a win-win situation for them. After all, they are the PL’s bedfellows.
It’s the prospective Maltese buyers who would be looking to buy property at that price range who will be hit the hardest as that market will definitely be taken up by our new fellow citizens.
They are the PN’s bedfellows too. I would have thought we were more than a nation of real estate developers. But the PN say I’m wrong.
I do not expect that 1800 citizenships will be sold in two years! I expect around 100 a year; at this rate it will take 18 years to reach the cap.
[Daphne – That’s naïve. The Labour Party is interested solely in its own narrow interests, whether in or out of government. Rest assured that if Muscat has capped the scheme at 1,800 APPLICANTS NOT CITIZENSHIPS (each applicant can bring in his entire family and his wife’s) then all of these will be sold between now and 2018. And I’ll say they’ll all be sold more or less immediately, and that is how they came up with the 1,800 figure – a rather strange number.]
Am I right in saying that once they have an address in Malta, they are entitled to vote?
[Daphne – An address is not enough. You also have to be resident in Malta. But I’m sure they’ll work something out.]
It was drawn up for certain friends and the 1800 cap was the guarantee. Why can not anyone see that!
Why only 350,000 Euros for such individuals of talent? Is the government perhaps bound by a maximum fee of one million?
The next thing Henley & Partners would do is to arrange “leases” of properties (one address to 10 families) to applicants via their sister company Henley Estate.
http://www.henleyestates.com/
Oh boy, shouldn’t they bend over and praise the PM for giving them a chance to triple-dip in the honey jar.
Sounds like yet another piece of good advice that Henley came up with.
Money coming in through the door and leaving the country by the back door. If property is held for five years and bonds held for the same period, the tendency is one of appreication. That is, it becomes worth more than what it was bought for. That also depends on the locality, now that the likes of Portomaso towers can be built. The Malta Developers Association would have earned itself a sack of potatoes if they did not acclaim such a proposal. It is their money they are interested and once there is some repsonsible idiot who is shoveling money into their pockets their only stance is to stack it. It is the responsible idiot who has to see that he got his equation right.