The Minister for Finance Prof. Edward Scicluna announced a new property valuation system on Tuesday 11 November 2014 which will reduce bureaucracy on property valuations.
Minister Scicluna explained how the present architect’s valuation system is bureaucratic and a source of harassment for ordinary citizens who happen to be buying, selling, or inheriting properties. It is for this reason that in the Electoral Manifesto there was the commitment to review this system and to introduce safeguards against the current abuse.
Minister Scicluna noted that excessive bureaucracy and red tape is one of the factors that are adversely affecting Malta’s competitiveness, adding that the Government is determined to address it across all sectors.
He explains that it is for this reason that the Government is introducing an option, for those transferring property, of appointing an independent architect to draw up a valuation report of the property to be transferred. This is to facilitate the process and reduce unnecessary red tape.
Minister Scicluna explained that this initiative was drawn up in consultation with stakeholders in the sector, such as the Malta Developers’ Association, the Chamber of Architects and the Notarial Council of Malta to ensure that the initiative is successful.
Prof. Scicluna said that under the previous regime, the tax authorities would investigate every valuation of property submitted by appointing a government architect to carry out an official valuation. He said that these valuations were often done without supervision, and based on subjective considerations.
He noted that while in some instances flagrant abuse was uncovered, such as gross undervaluation of properties, in the vast majority of instances it was innocent individuals who were caught in this bureaucratic net.
Prof. Scicluna explained that by means of the new system, individuals will have the option to appoint a warranted architect to carry out a private valuation, and submit a report which outlines value and characteristics of the property. In this way, the Minister said, the tax authorities can properly assess the declared value of the property.
This property valuation system will be applicable to every transfer of any immovable or any real right over an immovable property, whether inter vivos or causa mortis.
Prof. Scicluna also explained that the new system will be backed up by an internal mechanism based on a number of property characteristics, which will allow tax authorities to review valuations submitted, and approve them once they fall within acceptable benchmarks.
The Minister also explained that the new system is a voluntary one that will work alongside the existing system.
Minister Scicluna underlined that the tax authorities will still retain the option of appointing Government architects to review property declarations in instances of suspected abuse. Those caught abusing the system will be held accountable.
Minister Scicluna underlined that this is another measure aimed at reducing costs and administrative burdens, while at the same time shows the Government’s determination to tackle bureaucracy in a lasting and tangible manner.
– Tuesday, 11th November, 2014