The Housing Authority has spent nearly €7 million this year to cover rental increases for families living in properties bound by pre-1995 leases, housing minister Roderick Galdes told journalists during a press conference on Monday afternoon.
Approximately 2,140 families have benefitted from rental subsidies introduced as part of a major reform of the pre-1995 rent laws carried out three years ago.
Speaking in 2021, prime minister Robert Abela had projected that the reform would cost government €1 million in the first year, rising to €3 million in year two and €5 million in the reform's fifth year. Back then government had estimated that 10,000 households could benefit from the reform.
The reform was intended to wipe away a law that courts had repeatedly deemed to be unconstitutional, because landlords could neither evict tenants nor increase the rent for properties that were leased before 1995.
As part of the reform, the new value of the rent of such properties is established by the Rent Regulation Board, following an architect's evaluation.
To qualify, landlords must first file for a review of the rent. If successful, they can then claim up to two per cent of the property’s market value in rent.
Pensioners and social welfare beneficiaries living in properties bound by pre-1995 leases get their rental costs covered in full by the state up to a maximum of €10,000 per year, per family.
Tenants in full-time employment are expected to spend up to 25 per cent of their income on rent, with the state paying the balance up to that €10,000 yearly maximum.
In concrete terms, this means tenants experience only a minimal increase in rent, an adjustment made possible through a dedicated government subsidy, said Galdes.
“The reform has been more than just a temporary fix. It has been critical to many, granting stability to many families, enabling them to continue residing in the places they have known all their lives.”
Through the pre-1995 rent law reform, the Housing Authority provides the tenants with the services of a lawyer without charge to assist them in court cases in front of the Rent Regulation Board explained above.
In 2023 it set up 694 free appointments, helping tenants navigate the intricacies of their rent agreements. This year it has already booked 584 legal appointments, Galdes said.
"It’s evident that the reform has successfully balanced the scales, allowing tenants to stay in secure, familiar surroundings while giving landlords a fairer income,” said Galdes.
The press conference was framed as part of government’s initiative to promote Budget 2025, with Galdes noting how “the largest housing budget in history promises continued stability and reassurance for the community.”