Estate agents are gearing up to sell 1,800 mid-range flats for Eur350,000 in a couple of years. Work out what’s going to happen to the market.
As for the estate agents – of course they’re on board. With the government’s plans to “cap the scheme at 1,800” – and it isn’t clear whether they mean 1,800 passports or 1,800 applicants who each have a spouse, children, in-laws and parents who will be getting passports too – they are salivating at the thought of selling 1,800 flats and houses in the next couple of years.
What that sudden pressure will do to real estate prices in the immediate short-term is obvious. But isn’t that just typical of this government? It gives you two cents on the swings and takes nine cents off you on the roundabouts. In the last budget, it gave tax incentives to those buying their first home. And with this measure, it has ensured that the sort of places first-time buyers are after will suddenly all start wearing a price-tag of Eur350,000 as owners try to cash in.
Meanwhile, those who own the sort of real estate currently valued at Eur1 million to Eur4 million, who are hoping to unload it on a passport-buyer, will be left holding their hope. With no residency requirement, those buying Maltese passports won’t give a stuff about the sort of real estate they’re buying because they’re going to have no intention of living in it.
They’ll spend exactly what they are forced to spend to get their EU passport – Eur350,000 – and then take their millions to London or Paris and buy a flat there.
The Eur350,000 real estate requirement is directly tied in to the fact that residency is not a requirement, and reflects it. I suppose even Tony Zahra knows that people who have Eur650,000 to spend on a passport are not going to live in a mid-range side-street flat in some village. If residency were made a requirement, passport-buyers would be snapping up the more expensive real estate and leaving the mid-range pieces for Maltese people with smaller budgets.
Oh, and another thing. We’re told they have to buy real estate in Malta but we’re not told, crucially, for how long they have to keep it, if at all. If they don’t have to keep it (and it’s hard to see how they can be obliged to keep it, given that there is no residency requirement), they buy their flat and immediately put it back on the market. And when it is sold, the money leaves Malta again.
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So the real benefit would be to the real estate agents on flipping these 350K “titles”?
JM is just luring in these selected groups of beneifciaries to support his already crooked plan – to make is more crooked …
Which exactly shows why Scicluna was right when he said that the scheme was made to attract talent to Malta because there is lack of it.
Look at the bunch promoting this, they have no idea of its effects.
The loopholes are so obvious.
The above analysis is enough to send shivers down Malta’s economic spine.
Flats bought as the means to a passport and then sold as soon as possible – what is that going to do to the market?
As the year comes to a close, it is becoming more evident that the record of the Labour government has been dismal. It has bungled every major issue: the sale of citizenship and now the public transport conundrum.
Joe Mizzi has ousted Arriva from alta and now realises he has opened a can of worms.
How will he respond to the apprehension of the hundreds of workers in the transport sector? I know. He will tell them ‘m’hemmx flus’ (no money), which is his typical response to people.
Apparently, ‘m’hemmx flus’ is his only answer to any problem that comes his way. What an incompetent.
The purchase if property may be profitable to those who buy mid range property now, but in the long term it will just make prices of mid range properties more expensive and not affordable to first time buyers.
On a different note – Michel Petite has been made to resign from the EU Ethics Commission as he was also involved in the Dalligate scandal.
http://corporateeurope.org/sites/default/files/attachments/complaint_to_eu_commission_re_michel_petite_swedish_match.pdf
http://deutsche-wirtschafts-nachrichten.de/2013/12/24/tabak-lobbyist-tritt-als-leiter-der-eu-ethik-kommission-zurueck/
Or maybe the same apartment is intentionally re-sold to a number of persons queuing up to buy the passport. So much for 1800 apartments sold.
One single apartment may fulfil the requirements of 10 or more prospects who may collude and avoid more hassle.
In the UK because of a stamp duty threshold, you will find many properties priced at £249,999, but very few within the bracket £250,000 – £265,000.
In Malta you will soon find many properties priced at up to around Eur320,000, then nothing from 320-349k, and everything starts at Eur350,000.
I think he said that both the property and the SE investment should be for 5 years.
This government really can’t figure out what is really needed for our country. We need to look at the long-term and not at the short-term economic benefits of any policy.
An investment scheme would make sense if it includes what follows.
1) Applicant should pay €x, plus €y for each dependent, in taxes in Malta every year for income remitted to Malta. This would put money into the economy and kick it up by the economic multiplier effect.
2) Applicant should buy or rent a property in Malta WHICH CANNOT BE RENTED OUT AGAIN of over €x, throughout the duration of his citizenship. If sold and not replaced, citizenship will be revoked.
3) Applicant should reside in Malta for a minimum of 3 months. This would force him to spend his wealth in Malta and again kick up the economy by multiplier effect.
4) Applicant should have a comprehensive health insurance plus should pay Social Security Contributions, otherwise will not be eligible for hospital care, state/church schools and pension.
5) If any of the above is not adhered to, citizenship is revoked. To reactivate a revoked citizenship applicant should pay another lump sum plus satisfy all criteria again.
And we had thought that our worst political time was under Mintoff and KMB.
Nice, as Onslow would say. Now they can purchase property and as they do not live in Malta they can either sell it or rent it. Good try Mr. Prime Minister, but you still have not fooled us all.
They won’t even need to pay €350,000 for an overpriced apartment – they can get away by renting something @ €16,000 annually and it will cost them just €80,000 for 5 years.
The €150,000 investment in bonds is irrelevant – they can very easily sell them after 5 years.
Bottom line … the price of a Maltese passport is now €698,000 instead of €650,000.
From what I understood, purchasing that low-range property is not even a requisite.
From the Times of Malta (where, of course, rabid Labourites are trying to rip rational comments to shreds):
“Applicants would also be required to make a property investment of €350,000 or take a €16,000 annual rental, both on five-year contracts…”
This means that they don’t even have to buy the property – if I understood correctly. They can just chuck €80,000 over a period of five years into someone’s pocket and be done and dusted with it all.
This also gives rise to the question of whose pockets such money will be going into? Twanny Bronka has quite a few in Gozo, for instance – will these automatically be put up for ‘rent’? Will the real estate agents have an approved list of properties that can be ‘leased’ as given to them by the Government?
Also, why the capping at 1,800 applicants, and not a yearly capping of individuals? To make sure all of Joseph’s Chinese and Azeri friends get in on the scheme?
Simon Busuttil was right to say that the concept of a sale of citizenship remains. This is nothing more than an outright sham – someone should take the time to launch a campaign to start a referendum against this joke.
What was Tony Zahra doing at that press conference “in a personal capacity”?
The MHRA subsequently confirmed that he was not representing them, so his presence there was clearly ultra vires.
Did someone say this scheme continues to showcase Malta as a banana republic? Having persons at a press conference of that sort “in a personal capacity” gives you an idea of the slippery slope we are in since March 2013 as far as ethics, propriety and integrity are concerned.
I think the presence of Tony Zahra is representing the timeshare market of our hotels… that’s easy money especially if the residences are not used.
Can I have your email address please, Daphne?
[Daphne – dcgalizia@gmail.com]
They will disrupt more than the real estate market.
When government bonds are issued they are ‘gobbled up’ within the hour and mostly by Maltese. What will happen now? Will these passport buyers be given a preference?
This is a typical Christmas under a Labour government. Arriva is leaving and we will be selling our passports for a ‘higher’ price.
The sale looked like a closing down sale, so the shop window needed some redecoration to sell the same product for a higher price or rather for an extra five year “investment”, no need to stay in Malta.
Merry Christmas to Daphne and the thousands who follow or contribute to this corner in Malta where logic and levelheadedness still prevail.
Special greetings to Jozef, Baxxter, Ciccio, Harry, Antoine and the rest.
Thank you, Gahan. Wish you all the best.
Cheers, Gahan.
I’ve only just seen your comment, Gahan, so have a spiffing Christmas season yourself, or what remains of it, with plenty of cocktails, crackers, japes and laughs of all sorts, and especially big wet kisses under the mistletoe, possibly from that unattainable office beauty.
What’s spectacular is how none of Scicluna’s suggestions have been taken on board.
It’s also significant how this government wants to peddle bonds outside our shores. Never a good idea spreading sovereign debt to foreign interests.
Meantime, brace for the property spike, and, as you said, this one will distort the market. It seems the urgent need for cash isn’t just a perception. Hints of Zapatero.
So they can buy or rent. If they opt to rent a property we will simply have 1800 empty rented properties for 5 years.
Than we will be 1800 properties closer to a property market collapse 5 years down the line.
These people will buy a house worth Lm150,000 (in euro it sounds much dearer) so we’ll have some demand for that kind of property for a few years.
But then they will put it right back on the market for roughly the same price. The problem is that THEN we’ll have an oversupply with the ensuing possibility of a property market crash.
Muscat is so short-termist. The property market in Malta needs stabilizers, not this kind of unstable temporary schemes that artificially increase demand for a few years only to collapse a few years later.
So they still don’t have to actually live in Malta?
Listening to phone-ins on ONE, the message is that paying government a sum is equivalent to investment.
I suppose it’s better to recieve the cheque directly than getting employed. Majtezwel hux? Burokrazija zejda dik.
F’daqqa wahda kull min ‘izzewweg Maltija’, hadha b’xejn, x’affarijiet dawn.
PS Owen Bonnici said (on TVAM) this morning : ‘1800 main applicants’. So I understand there will be 1800 PLUS acquired citizenships. Perhaps he could elaborate and explain further? How gullible does he think we are?
Albeit both your arguments are very much in order, as I see it, the first one may hit hard those who normally buy small amount/s of shares knowing that generally the ‘interest’ they receive is higher than saving/s accounts they may have in Maltese banks.
This therefore means that those workers who would normally take a few shares in Maltese companies will now have to compete not only with ‘cash rich’ Maltese, but more so with foreigners buying a small propety here and adding some more little cash to buy shares here in Malta.
I confirm my that for me the true Workers’ Party in Malta is the Nationalist Party under the leadership of Dr. E. Fenech Adami and Dr. L. Gonzi, and I am certain it will continue this way under Dr. Simon Busuttil.
I want to add that despite my age, I remember very little of Nerik Mizzi, whilst in the case of Dr. Borg Olivier I can say that I knew him more in my role of a trade unionist, rather than a person involved in politics.
Finally in case my argument is challenged, I will give factual examples of the way the workers were treated under Mintoff; and Dr. Sant as well as the present government.
The capping of ‘the scheme’ to 1,800 is a gimmick.
Once the 1,800 ceiling is reached, a new scheme can then be launched. So really, this limit is a no limit.
As for the purchase (or leasing) of a property in Malta, what is going to stop the holders of those passports from leasing their property (or sub-lease it if they are leasing it), thereby cashing in their investment?
The “new” scheme is merely a cosmetic surgery – a bit like that applied to the Malta Labour Party by Joseph Muscat during the electoral campaign.
The substance of the scheme remains access to the 28 countries of the EU for Euro 650,000, with a flat in Bugibba and some Maltese government bonds on top of it.
What’s worse, if the government continues to give the impression to markets that the Maltese government is bankrupt, nobody is going to want to buy Eur 150,000 of Malta government bonds anyway.
And if the new Maltese passport buyers are first time home buyers and they hurry up, they will even save on the stamp duties during 2014.
It goes without saying that there will be an appreciation in prices for the local buyers, who would not be benefiting anything at all from the scheme, let alone fork out extra money. Not only will labour be squeezing the dosh out of foreigners but also the local citizens. Paying higher prices for property implies also an increase in fees and taxes. This is not for the benefit of the economy but of the few, the very few. What is congruent is the fact that the mid range flats are being targeted to be put up on the market and not property in higher ranges of prices. One has to consider also that people opting for the citizenship as an entry level into the European Union, would not discard the rental option which is not as binding as the purchase of property. What strikes me though is the fact that Labour is using a style it used to implement in its Old format. They enact new legislation when and where an amendment to existing legislation would have obtained the same if not better results.
The PL says it has the consensus of consituted bodies on the rehashed sale of passports and citizenship.
Tony Zahra has a right to his opinion but represents no one other then himself.
The MFSA is not a constituted body but an authority.
I wait with bated breath for the Chamber of Commerce to issue an official statement on the issue as it was vehemently against the original scheme. The scheme has not really changed in principle – they’ve simply added the requirement to buy or rent some property and buy just Eur150,000 of bonds.
There is no residency requirement or even any real investment. The representative of Finance Malta, a gentleman who has worked very hard within the financial services sector, needs to perhaps clarify or advise if he is, as rumour strongly has it, to be appointed the next CEO of Bank of Valletta by the major shareholder, and therefore his presence at the meeting, or rather his non attendance, might have affected the rumoured appointment.
I hope that the Opposition will stick to the promise of the revocation of the law once in government.
It is misleading for Joseph Muscat to claim that citizenship will now cost €1.15 million. In actual fact it may be as low as €875,000.
Besides the original €650,000 a prospective citizen has to rent a place for €75,00 spread over 5 years and buy a small number of shares for €150,000.
This means that the cost has gone up by a mere €225,000.
Moreover the price for dependents’ citizenship has not been touched. A family of five will now pay €975,000 instead of €750,000.
And what about the “bulk-buying discount” for those who buy a larger number of passports? Will that remain?
It’s all down to price for Joseph Muscat but not for the PN.
So once again Mr Lino Spiteri was wrong.
You see, Mr Spiteri, it’s not about the price at all.
A short and quick note to wish you and family a Merry Christmas and New Year. Enjoy the break.
Smells like another iced bun to me. Passports for sale and principles for sale as well. In Maltese we say “jiskappriccak” to sell something you never have considered to sell. This government is evil.
Joseph Muscat never had any intention of changing the passport-selling scheme. With the excuse of entering discussions with the opposition he was looking for endorsementS and MFSA and the others swiftly obliged. How short-sighted. Muscat cannot be trusted.
These measures are actually to pave the way for the shady people the scheme is intended for… legalized run of the mill money laundering procedures.
You don’t even need to buy property but can rent: five years at Eur16,000 a year.
What happens after the passport has been granted and the grantee breaks off the five-year contract?
What a bunch of amateurs are running this country! Or should I say running it to the ground.
Well, after Minister Edward Scicluna spluttered at the European Parliament that the scheme was so full of flaws and, don’t worry, this will be capped at perhaps 50 per year, they now revise the shameful scheme to have 1800.
Is this every year, considering that most applications will bring another 3 or 4 others?
These will all have votes and guess who they will vote for to retain their key to Europe. The Nationalist Party did well not to accept to be an accomplice to this scam, and should persist in all manners to remind all that they will revoke the scheme, with no refund, once in government. We have enough home-grown trash amongst us – we don’t need to import more.
Just a small note to wish the esteemed owner of this site and all regular contributers and their families a happy Christmas and a prosperous new year,
Dear Daphne, I would like to wish you and your family a merry Christmas and a prosperous and happy new year.
Bottom line is that our government was forced to scrap the scheme. Not with immediate effect, but after 1800 rich applicants receive their passport.
Meanwhile, a myriad of destitute migrants keep receiving their EU passport for free. Sadly, this contradiction has less to do with morality, diversity, or an aging population, than with subverting the diversity of European nations into an EU mass of misguided sheeple thorn apart through non-assimilation, division and conflict. It’s called ‘multiculturalism’, where a strong supranational government is ultimately necessitated to control a restless market of half a billion serfs.
But that’s konspirisi tieri and we all know, as we are regularly reminded, that konspirisi doesn’t occur anywhere.
Destitute migrants do not acquire citizenship. That’s a myth put about by racists, xenophobes and other assorted Labour supporters. Despite your loyalties, I’m surprised you fell for it.
Nowadays, all destitute migrants are asylum seekers, and a vast majority of them eventually do get their ‘EU passport’.
Issa jekk xi raġel li ġej minn pajjiż fejn hija pprattikata l-poligamija jitħajjar jixtri ċ-ċittadinanza tagħna x’jiġri? Jekk għall-argument dan ikollu xi 30 mara u mitt tifel u tifla dawn kollha jikkwalifikaw għaċ-ċittadinanza basta jħallsu?
According to PBS news, 1800 is the number of primary passports applicants, that is excluding spouses and children. The figure may easily become multiplied by 4 when secondary applicants are added.
[Daphne – By far more than that if you bring in the parents and in-laws, his ‘n’ hers children and so on.]
Just a short note. Hope dear Daphne you had a blessed and merry Christmas with your family and hope you will have a prosperous new year. Thumbs up. Keep up the good work .
How nice. A PLO Mother Christmas for Soleil and Etoile.
Maybe should ask about the orign of the ‘dirty’ money, and I do not mean the monthly allowance that she is receiving but the origin of her late husband’s money.
I wouldn’t be so proud to receive a gift through the use of that kind of money, but here we are talking about Joseph Muscat.
So one minute we are scratching our heads about how to tackle the issue of excess in unoccupied property and next thing you know is that some bright spark devices a scheme that will only help to double it.
No wonder the speech by Minister Scicluna at the European Parliament had no news value according to the PBS. There was nothing true in what he mumbled