Blitz on thousands of unlicensed tourist apartments

Maltese authorities are set to clamp down on owners of holiday apartments who continue to rent out their premises without a licence, MaltaToday has learnt.

Work has been underway for some time for the Malta Tourism Authority to be able to address the problem, which sources said was far greater than initially believed.

They described estimates of 3,000 unlicensed operators as “conservative”.

The rise of online platforms like Airbnb and Booking.com combined with Malta’s ever-increasing tourist numbers, including during the winter months, has provided apartments owners with the opportunity to enter a market they might have previously been unable to.

But as the number of people opting to stay in holiday apartments increases, so too have calls for there to be a proper enforcement of regulations.

Hoteliers and law-abiding operators have long complained that a lack of enforcement was allowing some to gain an unfair advantage by avoiding taxes by operating without a licence.

Arrears on unpaid taxes

Tourists staying in private accommodation made up a quarter of all visitors to Malta in 2013, equivalent to 392,605 individuals. By 2018, the number had increased to 947,292, or 36.5% of all tourists visiting Malta, and the numbers continue to increase.

In order bring the market under control, the MTA has over the past two years invested in “tools” to be able to identify unlicensed operators, with sources claiming that the authority would soon be upping the scale of its enforcement operations.

Any action, they said, would be carried out in collaboration with the Inland Revenue Department, and would see those who have been operating without a licence forced to pay any arrears to be allowed to continue operating.

They said that ultimately it wasn’t a matter of closing these apartments down, because the demand for tourist accommodation will continue to increase. “The idea will be to ensure that there is a level playing field that everyone is operating according to the rules,” a well-placed source said.

Anyone renting out their apartment for short holiday lets is obliged to register and obtain a licence from the MTA. In addition to paying the applicable taxes, such as VAT and income tax, landlords must also collect an eco-contribution of €0.50c per person per night and pass it on to the authorities.

Not just a matter of running an online search

Speaking to MaltaToday last year, Malta Hotels and Restaurants Association president Tony Zahra had stressed that government had an obligation to ensure that rules are obeyed, insisting that there was no reason for unlicensed operators to be allowed to continue operating.

“It’s not rocket science, most of these apartments are listed online, so it’s just a matter of taking the list of registered apartments and cross-checking with online listings,” Zahra had said.

However, the sources said this made the issue seem simpler than it was, since it wasn’t always easy to identify the location of unlicensed apartments. This, they said, was especially true of apartments listed on Airbnb, which doesn’t include addresses in its listings.

“You get a situation where you know someone is renting out an apartment in Sliema, for example, but you have no idea where in Sliema it is.”

In a bid to address this situation, Tourism Minister Konrad Mizzi recently said that an agreement had been reached with the popular holiday website Booking.com, through which only apartments registered with the MTA will be allowed to advertise their apartments on the platform.

Mizzi had said that similar agreements were being sought with TripAdvisor and Airbnb, however, talks with Airbnb have so far proved unsuccessful, the sources said.