The Chamber of Commerce has welcomed the reform of old rents, announced by the prime minister on Saturday, but has sought clarification on various aspects.
In terms of the reform, landlords of properties bound under pre-1995 rents will be able to claim up to two per cent of the property’s market value in rent.
The reform will see the government absorb most of the additional rental costs thousands of families, particularly pensioners, are expected to face as a result of the change, which is intended to wipe away a law that courts have repeatedly deemed to be unconstitutional.
The Chamber said certain issues still require clarification and discussion, not least on the amount budgeted for the implementation of the scheme, which appears too low. In addition, clarification is required about the mechanisms to assess the market value of the properties concerned.
The Chamber said means-testing of the sitting tenants should be accompanied by a valuation of all their assets, including any other properties owned, and whether they effectively reside in the rented property or merely hold tenancy by virtue of the address on their identity documents. It is also unclear, it said, whether or not tenants in part-time employment will be fully subsidised.
The Chamber said it will study this proposal in greater detail and will be requesting a meeting with the prime minister and the parliamentary secretary for housing to further discuss and possibly refine the government's proposal.
Praise for proposed reform
The ADPD party said it was deeply satisfied by the reform proposed by the government.
"Government’s proposal to carry out a root and branch reform of the remaining pre-1995 tenancies is a responsible and courageous political move as through it this government is shouldering the shortcomings of all its predecessors which have ignored the matter over the years," party chairperson Carmel Cacopardo said.
"The proposals put forward by government are acceptable in principle. However, it is expected that when government publishes its detailed legislative proposals these are accompanied by the studies carried out which substantiate the proposals made. We await a healthy public debate which is adequately buttressed by well-researched background information," he added.
The party said that from what has been stated so far, it was clear that the determination of rent will not be left completely to the whims of market forces as it will be capped at 2% of the property's value. This will go some way to address the fallout created as a result of the complete liberalisation of the post-1995 rental market.
"It is positive that the reform will ensure that no current tenant currently residing in properties subject to pre-1995 tenancies will end homeless. This will be so due to the fact that as a result of the proposed reform, through the taxes that we pay, the state will in most cases shoulder the revised rent due, or else the state will provide alternative accommodation.
"The proposal will address an enormous social problem with a substantial financial outlay consisting of millions of Euros annually. These costs have to date been borne by the owners of the impacted 10,000 properties for countless generations. It is just and right that the whole community, through the state, now steps forward to shoulder the problem in a spirit of national solidarity with the most vulnerable amongst us."
Cacopardo said it was with deep satisfaction that ADPD supports this proposal that at long last starts reasonably addressing equitably a social problem which has been practically ignored for over sixty years.