Vacant dwellings : tax related issues in Malta

Abstract

Purpose: This study reviews the potential implementation of a vacant dwelling taxation in Malta. The study focuses on assessing the problem of vacant dwellings through the implementation of tax related measures. In so doing, this study reviews similar tax regimes in European countries, where similar taxation has already been levied. Design: The objectives of this study were achieved through a comprehensive literature review and a number of semi-structured interviews with selected local tax practitioners and both governmental and non-governmental stakeholders. Furthermore, contacts with European tax practitioners where established. Findings: The findings suggest that vacant dwelling taxation could be introduced in the near future. However, levying vacant dwelling taxation in Malta can result in additional costs for the government, mainly administrative and compliance costs. Furthermore, in line with foreign respondents a direct tax framework should be utilised to implement vacant dwelling taxation locally. Nevertheless, the majority of the interviewees believe that providing more incentives such as a grant on the restoration of dwellings rather than introducing taxation locally could also help reduce the number of vacant dwellings. Conclusions: This study concludes that the subject under study is still at its infancy stages within the local context. In fact, the researcher concludes that the future of vacant dwelling taxation within the local context depends on a large number of factors, which hinder the implementation of the said tax in the future. Value: Given that the subject under study has hardly been studied locally, this research sought to fill this gap. This entails that since in recent years a number of European countries have already levied vacant dwelling taxes on a national level, this research sought to analyse whether the implementation of such fiscal measures would be feasible within the local context, and if so, to assess any implications it would have.