New rent reform to cap price increases - will come into force January 1st 2020

Martina Said - 27th June 2019

The new law is aimed at bringing stability to the sector, the Prime Minister said.


New rent regulations announced yesterday include a minimum rent period of one year, a minimum notice period for landlords and tenants, caps on price hikes, an obligatory contract registration and tax incentives to encourage long-term contracts, Prime Minister Joseph Muscat said at a press conference yesterday.

The rent reform was presented by lawyer Kurt Xerri, who helped draft the new law, entitled Private Residential Leases Act. Dr Xerri said the reform is aimed at ensuring stability through the introduction of a one-year minimum duration on residential contracts.

The law will come into force on January 1st 2020 – all new contracts signed after that day have to be registered with the housing authority.

The Prime Minister stated that, through the reform, a landlord can no longer “kick you out of your house from one day to the next”. Landlords will have to advise tenants whether their contract will be renewed or not three months before it expires. If the landlord doesn’t do so before the contract is up, it will be automatically extended for another year.

While the reform will not be impacting prices, it will be imposing a cap on price increases – landlords can increase rent by a maximum of five per cent from one year to the next. This applies to contracts of more than one year.

For tenants with longer-term contracts, landlords will be eligible for tax incentives. For a two-year contract on a one-bedroom apartment, landlords will receive €200 in tax credits; €300 for three bedroom apartments; and €400 for units of three bedrooms and more.

Commenting on the reform, Parliamentary Secretary for Social Accommodation, Roderick Galdes, said "the rental market should not be a question of success for one and misery for another; I have faith that this law gives the solutions needed to address a number of challenges and be part of a holistic strategy in housing.”

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