A White Paper on rent reform is proposing two models to encourage longer leases and set annual increases in rental payments.
The first model proposes the introduction of mandatory minimum rental contracts with annual increases in rent, which would be agreed beforehand between the landlord and tenant.
The second model relies on fiscal incentives rather than the forced minimum duration, to encourage landlords to offer longer leases with agreed annual increases.
The White Paper is also proposing the creation of a new department within the Housing Authority that will be tasked with overseeing the rental market and enforcing rental regulations.
It also proposed that there should be an adequate notice period introduced for tenants and landlords to terminate the rental contract if circumstances change, as well as the creation of a second judiciary chamber to deal with eviction disputes.
The White Paper encouraged the government to invest with the private sector to increase the supply of affordable housing for rent.
The proposals are aimed at primary residences. This means the rental regulations will exclude properties used for tourist accommodation or short lets to foreigners residing in Malta for a brief period.
Housing Parliamentary Secretary Roderick Galdes said fixing rental prices was not an option because it risked stifling the market. “We learnt from past mistakes when landlords refused to rent out property out of fear that they will lose it and not get a good return,” he added.
Mr Galdes said the White Paper was the first in a series of other reforms being planned by the government.
“In the forthcoming budget, we will introduce measures to help people who live in private rented housing,” he said.
The public consultation on the White Paper is open until 30 November and anybody interested can make submissions on www.socialaccommodation.gov.mt