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MAY 2012 |

but, all told, it has managed to weather the storm better than many other Mediterranean states,” he says. “The national unemployment rate is currently the sixth lowest amongst all 27 EU member states and infl ation fi gures have also remained amongst the lowest in the region.

“Notwithstanding the current global economic climate the local real estate

MALTA Developer profi le

market has held its own, especially at the upper end of the market and whilst there have certainly been dips and corrections in the low to middle segment there certainly has been no dumping or double digit drops.”


Last year Malta’s tax system was somewhat streamlined, making it very

Tourism and culture

Statistically Malta attracts a diverse range of tourists. Data from Malta Inter- national Airport – the only airport that currently serves the entire Maltese archipelago – shows that over 3.5 million international passengers flew to Malta in 2011, compared to just over 3.2 million a year previous. Visitors fly- ing from the UK were way ahead of the rest, with over one million passen- gers from Great Britain & Northern Ireland coming to the island. Away form the usual suspects in Europe, however, there were huge jumps in visitors from the Middle East and Asia, with a 50% increase for the former and an astonishing sevenfold increase for the latter. Away from practicalities Malta is certainly not short on attractiveness, not

just in terms of beauty but also heritage. The island has nine UNESCO World Heritage Sites, and as Bilocca explains, a rich and diverse history. “Some of the heritage temples here pre-date Stonehenge (in the UK) says

Bilocca. “Our location in the Mediterranean sea meant Malta was – and still is – a good way to control and access that part of the world. So over the years we’ve had Turks, Carthageans, Romans, the British colony … everything. It means that all of these cultures from around the world have left their mark here in some way. Vassallo believes that its positioning in the Mediterranean also makes it a

great sailing hotspot. “[Malta has] wonderful sailing, beaches and secluded coves – good

berthing and facilities and the fact that Silicy is just a short hop away also makes Malta an ideal yachting base,” he says. Vassallo also points that the island’s relatively tiny size can also work in its

favour. “Strange as it may sound, what I call the convenience of proximity [is a selling point],” he says. “Since everything and everyone on the island is some 10 to 20 minutes or so away there are no huge commuting times to contend with and this generally means more leisure time to enjoy and a far more active social life for all.” Bonnici adds that Malta’s quality of living serves as a huge incentive for

overseas buyers. “A Mediterranean climate (over 5 hours of sunshine a day) isn’t all that

Malta has to offer,” he says. “Malta’s many other virtues in the 9 categories of the International Living index combined to earn it 3rd place overall, pipped to the post by the U.S. and New Zealand. That ranking speaks volumes for the size of Malta’s quality offering relative to the island’s land mass of just 122 square miles.” But what factors are they? “How about a stable government, economy

and a modern health service?,” he replies. “These factors carry a lot of pull for wealthy English and Europeans looking to get away from their frosty climes. In fact, frost and snow are unknown in Malta with temperatures of 70 degrees Fahrenheit (21 degrees C) in November. Flights to many European capitals are just three hours away.” “Crime is low, education levels high, the locals hospitable and English-

speaking with 48 English language schools. As a result, homes and apart- ments here have now attracted the international set. So has the historic harbours, 5-star hotels, restaurants and summer nightlife. “But overseas domestic buyers aren’t the only ones to recognise the

reputation of the island’s property potential,” he explains. “Malta’s success in attracting City hedge fund managers to redomicile to the island as a result of a well regulated and cost-competitive jurisdiction has spurred more demand for high quality homes in the sun.”

attractive to overseas buyers. “A recent Central Bank of Malta

report outlined that assets held by foreign nationals in Malta have topped the €28 billion mark this year,” says Vassallo. “This is set to increase in part due to the introduction of recent tax legislation, which has been specifi cally designed to attract wealthy international purchasers to our shores. The introduction of the Highly Qualifi ed Persons Rules was implemented to bolster the fi nancial services industry.”

Despite this, Malta does have some restrictions on overseas property buyers. People from EU-member states must live at least fi ve years in Malta before being able to property freely on the island. Before this time they must do as all non-EU buyers do and apply for a visa under the Immovable Property (Acquisition by non-residents) Act, colloquially known as the AIP Act. According to specialist Maltese

legal fi rm Zammit Law, companies and other such bodies are subject to different rules. “Companies and other bodies of

persons are subject to a different set of rules,” it states on its website. “Where such company or body is established in and operating from an EU member state, such entity may freely acquire real estate that is required for the purpose for which it has been set up provided that 75% of its share capital is held by a person (or persons) who is a citizen of an EU member state and who has resided in Malta continuously for a minimum period of 5 years.”

“Any other body of persons will

require a permit, which will only be granted if the property is required for an industrial or touristic project or as a contributor to the development of the economy of Malta.”


However, overseas property investors get around this legal obstacle in purchasing real estate by buying in what are called Special Designated Areas (SDAs). Property in SDAs is exempt from the restrictions set out in the AIP Act. As realty fi rm MXP states on its website: “In these areas, permanent residents can purchase property with the same property rights as Maltese


citizens and thereby enjoy the great capital growth as well as rental yields that these prime areas offer.” Bilocca explains: “SDAs have a

scale of maybe 100 units or even more. They are more architecturally artistic and have a lot of luxuries, such as swimming pools, tennis courts and the like.” “A positive is that they have no restrictions for buyers. So you can use them to generate rental yields.” They cater for both the top- and mid- range of the market, too. “Places like Tigne Point and Portomaso are very much luxury. However there are other SDAs such as Ta’ Monita and Madolina Village which offer cheaper prices.” Vassallo agrees that SDAs’ lack of barriers for overseas buyers proves a big plus.

“Any site earmarked as a special designated area always fi gures high in overseas buyers’ search itineraries because there are no purchase

“When one purchases an SDA, one has the automatic right to rent the property”

restrictions for foreigners purchasing property in these areas,” he says. “In the case of Special Designated Areas (SDAs), one may purchase more than one property and rent them out without restrictions.” Indeed, Vassallo believes that renting overseas property in Malta is having somewhat of a boom.

“It is currently experiencing something of a boom particularly with overseas tenants from the fi nancial and i-gaming industries,” he says. “Tigné Point apartments for example, with their central location and south after amenities are generating unusually high returns with one bed garden units fetching anything from €1,200 per month whilst seafront homes generally start from about €3,500 per month and have on some occasions topped the €6,000 per month mark.”

The right to rent out properties for rental yield is another benefi t of SDA projects for Bonnici. “When one purchases in an SDA,

one has the automatic right to rent the property,” he says. “This is not a normal condition for foreigners to be able to do in Malta.

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