The Residents Scheme Regulations have been amended as part of the transition from the Permanent Resident Scheme to the High Net Worth Individuals Scheme. The amendments became effective as of the 1st January 2011. Consequently, no certificates will be issued on or after such date under the Residents Scheme Regulations.
Individuals who had acquired rights under the Permanent Resident Scheme before 2011 will continue to benefit from the rights thereunder as long as the conditions of the scheme as amended are adhered to. This means that individuals benefitting under the Scheme prior to 2011 continue to pay the minimum tax of €4,192 required by the Residents Scheme Regulations.
New requirements for eligibility
Permanent Residents must comply with three additional conditions:
- the individual must be in receipt of stable and regular resources which are sufficient to maintain himself and his dependents without recourse to the Maltese social assistance system,
- the individual must hold sickness insurance in respect of all risks normally covered for Maltese nationals for himself and the members of his family,
- the property being declared as the holder’s residence cannot be occupied by any person other than the holder of the certificate and his family members.
The Immovable Property Requirement
An important amendment relates to the ownership or lease of immovable property by a beneficiary of the scheme. Prior to the amendments a Permanent Resident was required to prove that within 12 months of taking up residence in Malta he either purchased an apartment for €69,000 or more or a house for €116,000 or more, or leased immovable property at at least €4,150 per annum. Following the amendments, if the beneficiary sells the property or the lease is terminated, the beneficiary must acquire a Qualifying Property Holding to remain eligible for the scheme.
A Qualifying Property Holding is a property bought for €400,000 or more or a property leased for not less than €20,000 per annum.
In all cases the property must be occupied by the individual as his primary residence worldwide (the dwelling house in which he habitually resides in as his principal place of abode worldwide).
The only persons that may reside in the property are the client and his family members (his ascendants and descendants in the direct line, brothers, sisters, spouse/s or persons with whom he is in a stable and durable relationship).
Any individual who applied for the Permanent Resident Scheme before 14 September 2011 but was not issued with a certificate before 1 January 2011 may apply for the scheme available under the High Net Worth Individuals Rules, however will still be deemed to hold a Qualifying Property Holding for the purposes of the those Rules if he:
- purchased property before 14 September 2011 for not less than €116,000; or
- entered into a promise of sale agreement (konvenju) prior to 14 September 2011 to buy a property for not less than €116,000. The HNWI certificate will be granted to him upon proof of purchase of the property submitted not later than 31 March 2012; or
- entered into a lease agreement prior to 14 September 2011 for an amount of not less than €4,150 per annum, and submits a copy of such agreement, to the tax authorities by the 31st March 2012.
