New conditions for redemption of groundrent on government properties

The government is to introduce new conditions to a scheme for the redemption of the groundrent of government properties so as to deter speculation, Parliamentary Secretary Jason Azzopardi said this morning.
He said the scheme was suspended at the end of January in order to clear a backlog of applications and introduce new measures to prevent abuse and speculation.
The scheme was originally introduced for former Church-owned property and then extended to all government-owned properties used as residences.
Since its announcement in 2002, the scheme attracted more than 2000 applications and in view of the extensive verifications needed, there is currently a backlog of 3,000.
“For this reason, the scheme has been temporarily suspended and no new applications are being received,” Dr Azzopardi said.

He said the Government Property Division was using this opportunity to create a database of the pending applications in chronological order.
The pending applications would be considered according to new parameters, including increased checks to ensure that the properties were really used for residential purposes. The controls would include evidence from the electoral register, water and electricity bills and inspections.

In terms of another new condition, the property must continue to be used as a residence by the owner for 20 years after the sale or redemption of the ground rent and there cannot be any speculative development,” Dr Azzopardi said.
Should a property be sold, a percentage of the proceeds would have to be given to the Government Property Division. That percentage would follow a scale according to the time that would have passed since the emphyteusis would have been redeemed. The percentage would vary from 10% to 25%.

Dr Azzopardi said the reform’s ultimate aim was for greater efficiency and to discourage speculation of government property. It would also ensure that the Church-State agreement on the transfer of Church property to the State could be fully respected. The agreement had laid down that Church property was being transferred to the state for social purposes.

The above article was published on The Times of Malta online: Thursday, 26th February 2009 - 10:43CET

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