In 2015, the new Labour government introduced a scheme that allowed government-owned shops on commercial leases in Valletta to convert their lease into a deed for an emphyteusis. Fast forward to the present day, and Malta’s renowned capital city is thriving with commercial activity as a result of this scheme.

The scheme’s success was the driving force that led to the devising of Proposal No. 25 of the Labour Party’s 2022 General Election Manifesto. This outlined the widening of the scheme to not only be limited to the capital city as a point of demarcation, but for all of Malta to benefit. To this effect, a Legal Notice has been published in the Government Gazette.

Who can benefit from the scheme?

Commercial establishments in Government-owned tenements are going to be eligible to apply for an emphyteusis of 50 years. By having an emphyteutical title, business owners have stability, as they have a stronger proprietary title than a traditional lease and can use the property as collateral for financing purposes. The ground rent under this scheme will operate at 2% of the value of the property and increase by 10% every 10 years.

Amongst those eligible for these schemes are persons who have a valid emphyteutic concession that is recognized by the Lands Authority. Additionally, persons who have a valid commercial lease given by the Lands Authority or an agreement to operate a commercial place owned by the government or a property that has the title of a “casa-bottega” are also eligible to apply. To assist applicants with determining eligibility, the Legal Notice includes a schedule that categorizes different types of Government commercial property. By way of example, this includes non-residential buildings, educational institutions, retail shops and buildings related to light industry and storage or distribution.

The impact of the scheme

The expansion of this scheme is a testament to the type of national leadership that the Government is leading with. The original pilot scheme launched in 2015 was a success of its own merit when it was limited to Valletta. By expanding the scheme nationally, it is being ensuring that the scheme reaches those to whom it is addressed and those who can truly benefit from it.

With detailed implementation measures, the dual aim is to give business operators a stronger proprietary title and, equally, incentivise continued investment in the private sector. With an extended period of fifty years, those who are investing in these commercial buildings owned by the Government will be able to secure funding from the banks which shall enable them to invest in their livelihoods.

Through this scheme, everyone using government-owned commercial property will be able to fully shift their focus on long-term planning for their business and future operations – thus ensuring the peace of mind they deserve.

Photo: Efrem Efre