Property Ground Rent in Malta
In Maltese ground rent is also known as ‘cens’ or emphyteusis and this refers to a financial payment or amount – usually paid on an annual basis – that is attached to an immovable property. This can be attached to airspace or a piece of land and will apply to any structure erected on/under it. This fee is paid by the leaseholder or owner of the property to the owner of the land/airspace and although it is still fairly commonplace in Malta, it is considered as a somewhat of an antiquated practice.
When a property is sold under condition of an emphyteusis, a legal and binding relationship is created between the transferor (known as the ‘dominus’) and the transferee (known as ‘the emphyteuta’). Buying a property under this condition interestingly will also dictate what can and cannot be done with the property.
The practice harks back to when Malta fell under British rule. The buyer of the property acquires the right to the property built upon the land itself but the ground on which the structure finds itself remains in the hands of another and this person is known as the ground rent owner. Thus, the buyer/s of the structures on the land pays an annual fee to the land owner for use of the land. Terms affecting ground rent can vary, but they often involve long lease periods: anything from 99 to 999 years. Ground rents are usually nominal and fixed but may be adjusted from time to time. Ground rent can apply to both private and government owned land.
To ensure legal protection for both the property buyer and the land owner, these agreements are usually registered with the Public Registry. The owner of the land that has the ground rent rights will have certain obligations and rights while the owner of the property will enjoy the right of use and occupation of the building for the duration of the ground rent lease period.
Ground rent may be transferred or inherited by both of the parties with the same rights and responsibilities going to the heirs but it can also be redeemed by the property owner. The process of redeeming the ground rent may not be opposed or interfered with in any way by the ground rent owner.
The Types of Ground Rent in Malta
As pointed out earlier, over the years concerns have been raised about the practice of ground rent as many people feel it needs to be modernised or be replaced with alternative arrangements in the long run. In Maltese law we find perpetual, temporary, revisable and non-revisable emphyteusis so it is important to find out which applies to your property, if at all.
- If you are interested in redeeming your ground rent, the documentation for the application to fill in for the redemption of perpetual revisable ground rents can be found here.
- If you are interested in reading more about the 2019 SCHEME FOR THE PURCHASE OF THE TEMPORARY DIRECTUM DOMINIUM (TDD) OF GOVERNMENT PROPERTY OR LEASED PROPERTY USED AS AN ORDINARY OR SUMMER RESIDENCE, click here.
- If you are interested in reading about some of the most frequently asked questions about the Temporary Direct Dominium Scheme, click here. On this page you will also find an application form.
As always, the best advice is to consult with a professional such as a lawyer or notary in order to determine exactly what the legal terms are if you have ground rent that applies to your property.