The Malta Chamber of SMEs (GRTU) is calling on the government to stop its plans to build social housing in a bid to “revamp the construction industry”.
Presenting the GRTU recommendations for the development industry for the forthcoming budget, the organisation’s construction head and property developer Sandro Chetcuti argued in favour of scrapping the €3.9 million plans to build 300 new social dwellings.
“There is no need to invest more money in social housing,” Chetcuti claimed. “There are good prices on the market and their availability will continue for the next three to five years. If more money is invested on housing, this will continue to kill the property market and create an economic crisis.”
Chetcuti claimed there are apartments being sold at €70,000 (Lm30,000) in Kalkara that were cheaper than the prices given by the Housing Authority. However he could not give figures of how many of such units were on the market.
“There are a lot,” he said.
Blaming MEPA for the oversupply of residential units, Chetcuti said government should direct social housing funds to revive the shared ownership scheme, including a grant of €23,293 (Lm10,000) for first-time buyers.
“Money used for social housing can be redirected and used for this scheme,” he said. “Boosting this scheme would result in increased sale of property, removal of stagnation and the end of apathy regarding the waiting game.”
When told that this would lead to prices going up again, Chetcuti said he would welcome that scenario and then government might want to invest in housing again.
Chetcuti and GRTU Director General Vince Farrugia shot down suggestions that developers themselves were ultimately responsible for the present oversupply.
“The problem is bad planning, not bad development,” Chetcuti said, citing MEPA’s height relaxation and rezoning into higher densities
Nor would they acknowledge the environmental problems brought by overdevelopment.
“I have yet to meet an environmentalist who hasn’t developed a green area when granted the permit,” he said, while other developers present at the press conference hinted at Jeffrey Pullicino Orlando.
GRTU is also arguing in favour of a flat tax rate to owners to incentivise rental and emphytheutical markets, together with tax credits to buyers who decide to rent property instead of buying it.
Another proposal is to extent the five year option granted on final withholding tax to eight years, in a bid “to save substantial numbers of developers from a serious credit crunch” and to save developers who invested badly in land at a very high price.
GRTU claims that developers paying VAT on furnishings and improvements and another 12 per cent on them when selling amounts to double taxation in breach of EU laws.
Chetcuti also shot down the current system of getting government architects’ valuation of property to determine final withholding or capital gains.
Accusing them of “sometimes inflating the market”, Chetcuti said the final price should be that declared in the contract until a solution is discussed with the government.
GRTU is also calling for the introduction of “mixed use zoning” to allow commercial and office use of current housing units in residential zones.
As to prospective buyers’ indecision, GRTU proposes addressing it through a six-month moratorium on the payment of stamp duty on property purchased by first time buyers, including foreigners, on prices up to €116,000 (Lm50,000).