Means testing is to be scrapped when calculating rent subsidies first introduced last year, with the government seeking ways to help lower-middle-income earners struggling in a booming rental market. 

Central to the new measures is a mandatory requirement for all rental contracts to be registered with the Housing Authority as from next year. The requirement, which features prominently in a white paper currently being debated by stakeholders, is considered non-negotiable by the government. 

Rent subsidies

Rent subsidies announced last year will be improved and the means testing they were previously subject to will be waived, because the system had been penalising lower-middle-income people.

The rent subsidy will be raised to €3,000 for single persons, from €1,600, and up to €5,000 for a family with two children, subject to a number of conditions which will be announced in the coming weeks.

Incentives will also be announced for landlords who rent out their properties on long lets below market price. They will receive a substantial discount on capital gains tax due when the property is eventually sold after the rent expires.

Equity sharing scheme

The government also unveiled plans for an equity sharing scheme aimed for those aged over 40 forced to rent because they cannot afford to buy a house.

Over 40s often find it hard to get onto the property ladder, with banks reluctant to offer them mortgages due to their relatively short career trajectory and others who are divorced or separated paying significant chunks of their income in child support. 

These people will now be offered the chance to buy a residence jointly with the government. They will buy half the property, with the government buying the other half and paying the loan on that half.

Once the loans are settled, the tenant can either buy the other half of the property from the government, or else pay the government a rent on it. Arrangements will also be made in case the tenant dies.

The Finance Minister said the government also plans to partner with NGOs in social housing projects, transforming dilapidated buildings in their possession into housing.

Existing housing schemes rolled over 

Existing schemes, including the first- and second-time home buyers’ scheme, schemes for properties in Urban Conservation Areas and an offer of paying lower duty when buying property in Gozo, will be retained.

The government will also issue new regulations on property equity release, whereby people can leave their home to the government in return for being able to stay in a home of the elderly free-of-charge.


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