New Federation of Estate Agents launched in Malta

Hoping to increase the weight behind lobbying efforts to reduce property-related taxes, estate agents in Malta have formally organized themselves into a Federation.

Speaking at the official launch of the FEA last week, Federation chairman Douglas Salt said the aim of the organization was to:

  • ensure the various policies and laws concerning the industry protect the interests of both the client and the related businesses
  • ensure all business is conducted ethically between agents and their clients, as well as between the agents themselves
  • raise the standards of the real estate industry in Malta
  • secure the advancement and facilitate the acquisition of the knowledge needed to carry out this business.

The committee of the FEA has been lobbying government since November last year in a bid to reduce capital gains tax and penalties for early sales. Speaking to the Times of Malta, Salt said: "On the lobbying front we had meetings with (Finance Parliamentary Secretary) Tonio Fenech post-Budget for the amendment of the capital gains tax and are still lobbying for the removal of the five years to leave the choice open throughout the ownership of the property.

"We also had meetings with Government on the possibility of a final withholding tax on rental income. This is in the light of recent actions by the Tax Compliance Unit and also due to an increased demand for rental both by locals and foreigners. This increased demand will grow further due to property pricing and also projects like SmartCity that are bound to have a foreign element in their workforce. A final withholding tax will entice more people to put vacant property that they do not wish to sell up for rent."

An early triumph for the FEA was for estate agents' commission to be exempt from the 12% withholding tax. "We have also met and written to the EU Commission local representative on the removal of the clause in the AIP (Acquisition of Immovable Property permit) that prevents foreigners renting out their holiday home for periods of the year," said Salt. "We have started an awareness campaign in the local media on the value for money and benefit of using an estate agent as opposed to paying three per cent just to be on some magazine. On the training front we have approached the Malta Institute of Management [to] design a course for negotiators with an exam certification."

An EGM will be called soon for members to approve a code of ethics with an adjudication panel of non-estate agents - which is currently being identified.

HSBC Bank Malta, the organisation's main sponsor, will provide customers with an FEA leaflet outlining the benefits of using an agency in addition to its own loan literature. Sally Robson, chief operating officer of HSBC Bank Malta, said: "We will be exchanging know-how and expertise to continue to offer a comprehensive service for our mutual customers."

Robson also remarked that the bank's international network meant that it would be easier to introduce new initiatives and financial packages - such as fixed rate loans and the Service Promise, backed by a cash guarantee - which would in turn make the local property market attractive to overseas buyers. "Our collaboration with the federation will no doubt prove to be beneficial in this regard," she said.

The FEA's 2006 council is composed of: Douglas Salt, president; Michael DeMaria, vice-president; Trafford Busuttil, secretary; Mr Sant Fournier, treasurer; Ian Casolani, public relations; Manjri Borg Bindra; FEA Website administrator; Joseph Sullivan, legal and judicial matters; and Joe Mercieca, Gozo.