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Peter Caruana-Galizia LL.D.

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The Malta Labour Party has alleged that Poland has negotiated a much better deal than Malta in the acquisition of immovable property negotiations in the Free Movement of Capital Chapter. The allegation is based on one simple fact: Poland has requested and obtained a twelve-year transitional period for the acquisition of land by EU nationals. And the Labour Party is impressed. Twelve years after accession any EU national can purchase as much of Poland as he or she may fancy and, naturally, afford. This is five years more than Denmark and the Tyrol in Austria. Nothing very earthmoving but as transitional periods go, the longest yet.

The Poles, in fact, are generally outraged at the deal and would definitely not have been amused by last Sunday’s issue of Kulhadd or Alfred Sant’s remarks in his little Jum il-Helsien sermon, marked last Saturday due to the unfortunate clash. Their prime minister, Leszek Miller, has been accused of selling Poland short. Polish land is much cheaper than in neighbouring Germany and the Poles are extremely attached to their vast agricultural plains. Over a quarter of the population live of the land and a large number have very vivid memories of Poland’s every changing borders. It is normal and understandable, given this background, for Poles to be very nervous over the prospect of rich EU Citizens acquiring large tracts of agricultural land for a fraction of the price prevalent in their country, sitting on it for many years, turning those awful grey skinned potatoes into couches, I suppose, whilst waiting patiently for market forces and the aftermath of EU accession to push up prices to the western EU norm and then cash in on the appreciation.

Malta, on the other hand, has no vast agricultural plains and its only appeal, property wise, is as an island-in the-sun on average just a couple of hours away, ideal for the holiday home one has always dreamt of. This type of purchase is at present regulated and will remain so regulated despite accession. Any Greek island would fit the bill, as would the Balearic Islands or the Canaries. Prices compare with the rest of Western Europe and any speculation to be made was made principally during the Labour administrations of the seventies and eighties.

Malta has requested and obtained a permanent derogation on the acquisition of secondary homes by EU nationals. In a nutshell, anything other than a primary residence or permanent place of business can only be acquired following a permit issued by the Minister of Finance in terms of The Acquisition of Immovable Property (Non-Residents) Act. This is precisely the present position and it has been so for decades. The law in fact is a misnomer, as residence has nothing to do with it: the world is at present divided in two, Maltese Citizens and barbarians. An individual with a Maltese passport born and bred in Sunshine, New South Wales, who has never set foot in Malta, can freely acquire an entire village and no authority in this island can stop him. His lawful wife, however exotic, will also acquire in conjunction with him.

Eventually and hopefully, the world will be divided differently: E U Citizens and non-EU Citizens. The EU Citizens will then be further divided in to EU Citizens resident in Malta and EU Citizens resident elsewhere. It is only the former group who will have full capacity to acquire immovable property in Malta and one can safely assume that a good ninety to ninety-nine per cent of these will also be Maltese Citizens. Other EU citizens, including the token Pole following accession, will be restricted in their capacity and will only graduate to full capacity following a number of years residence here. So, basically, not much will change and as this is a permanent position not much will continue to change long after Poland’s twelve years are up.

Quite clearly, Poland and Malta have very different exigencies and no one size fits all solution can work. Malta, with its impossible population density has managed to tie acquisition of property with residence as well as with citizenship whereas Poland has managed to gain a twelve-year breathing space. In those twelve years Poland anticipates catching up and being on the same level playing field. Malta cannot possibly anticipate any appreciable decrease in population density in twelve short years.

This article appeared in the Times of Malta on Thurday 4 April 2002.

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