Articles
The small but beautiful world of Malta
www.thepost.ie
The Sunday Business Post Online
20th May, 2007
The republic of Malta consists of the islands of Malta, Gozo, Comino and two tiny uninhabited islands all located together in the Mediterranean sea, fewer than 100 kilometres south of Sicily. The country has had a fairly high profile in Ireland recently, especially since it joined the EU in 2004.
It also hit the headlines last year when Denis O’Brien purchased an apartment in the upmarket area of St Julian’s for tax purposes - in response, Michael O’Leary and Ryanair ran an ad campaign to launch its flights to the island with a large picture of O’Brien bearing the slogan: ‘‘All you pay is taxes.”
Malta is an historic country that has had innumerable owners and conquerors over the years. Its first inhabitants can be traced back to 3,800 BC, and the Ggantija Temple on Gozo is thought to be one of the oldest free-standing buildings in the world, predating Stonehenge by more than 1,000 years.
The islands have been owned or conquered at some stage by the Phonecians, Romans, Turks, Arabs, Spaniards, and even the French for a couple of years.
They were also given to the Knights of the Order of St John of Jerusalem in the 1500s,who became known as the Knights of Malta and gave the island the distinctive cross on its flag.
The Knights were also responsible for some of the islands’ most important fortified towns and buildings, including the capital Valletta, which has been declared a World Heritage Site by the United Nations.
In modern history, Malta has had a strong connection with Britain, a fact which is reflected across Maltese society. The British formally acquired the country in 1814, and it remained a colony until gaining independence in 1964. Driving is on the left, and all official legal documents are drafted in English, which is the official language along with Maltese.
Some traits of the Maltese have been compared to those of the Irish, not least their love of property. This has led to an extremely buoyant and sustainable property industry aimed predominantly at locals. Land is at a premium, so new developments are often restricted to being built on brown belt land which has old buildings in need of replacement.
Conversions or renovations are also generally required to maintain traditional white limestone facades, giving a unique element of uniformity to property on the islands.
The market has never technically had a ‘‘crash’’ - instead, prices stabilise for a period, and then start to increase again gradually.
The result is that property in Malta is by no means cheap, but it is seen as a mature and stable market which is not flooded with foreigners. Until recently, foreigners could only own one property on the islands, but this has recently been relaxed in a limited number of developments, which have been passed as Special Designated Areas (SDAs) where foreign investors can purchase multiple units.
The first and most famous of these was the Portomaso marina project which now houses the Hilton hotel.
Letting of property is permitted, as long as a licence has been obtained from the Malta Tourism Authority.
Licences are only issued to apartments of a very high standard, or villas with pools. In reality, these pools are often no bigger than plunge pools, and large ones are uncommon unless they are connected to a sizeable scheme.
Malta is a minuscule 246 square kilometres in size, but it still dwarfs Gozo, which is a mere 67 square kilometres. Gozo is also far quieter, unsurprisingly, and can only be reached by taking a 25-minute ferry trip from Malta. Many Maltese people own holiday homes on the island.
Malta island itself has a population of just under 400,000, making parts of it very built-up. Traffic can be a problem at the best of times, but the islands are currently undergoing significant road enhancement works courtesy of the EU, so there is an air of bedlam around most streets, with diversions in abundance.
The beaches are predominantly rocky coves although there is the odd sandy beach to be found. It offers plenty of access for boats, a passion on the islands, and consequently there are many marinas dotted around the coast.
Although the Maltese are slow to admit it, one of the biggest attractions of the islands is tax, specifically the lack of it.
Like Ireland and Britain, Malta separates the concepts of residence and domicile - this means that you can be considered resident in Malta even if you are not physically domiciled there.
Foreigners may apply for a permanent residence permit which, when received, means the applicant is not subject to tax on worldwide income. Foreign source income is only taxed in Malta to the extent that it is received in or remitted to Malta.
To qualify, one must own worldwide capital of at least € 350,340 or have an annual income of at least € 23,355.The permit holder is also required to annually remit into Malta € 14,015 plus €2,335) for each dependant, including a spouse. These minimum remittances must not be repatriated out of Malta.
To gain a resident’s certificate, you must also purchase or lease property in Malta. If you remain non-resident, there is not yet a double taxation treaty with Ireland, although one is awaiting ratification. You can, of course, also become physically resident in Malta, paying normal Maltese tax rates but with no minimum tax liability.
On the market
There are a number of interesting projects currently available in Sliema, one of which incorporates the part-renovation of the historic Fort Cambridge.The development offers one to four-bedroom apartments, duplexes and penthouses. The entire project will encompass 380 units spread between three freestanding blocks with views across the bay.
Many units have wide terraces and balconies, and the uppermost floors have spectacular views towards Valletta. Prices for 80 square metre one-bedroom apartments start from € 115,304 with 140 square metre two-bedroom units from €157,233.
Tigne Point is another SDA, located on the south-facing bank of the Tigne Peninsula with wonderful views to Valletta across the bay. The first phase, consisting of 140 luxury two to five-bedroom apartments, is now complete.
This is a car-free development incorporating a shopping, a leisure mall, a central plaza and an underground car park. Prices start from € 370,370.
Fort Chambray is an old city within a fortress at the port of Mgarr in Gozo. This redevelopment project is the only SDA on the island, and it has increased foreign interest there. The site was a fortified city built by the Knights of Malta 250 years ago for the protection of the island’s inhabitants. Many properties in the development have views across the port, and all car parks and vehicular traffic have been kept underground.
The development comprises a number of new residential blocks built in stone by local tradesmen, using traditional methods. The intention is to create a traditional, local village environment in a modern, upmarket setting.
Phase one is now complete, but there are a few units left, with prices from € 420,500.