Taxman silent as real estate agents raise PM’s purchase of ‘grossly undervalued’ Zejtun property
The Commissioner of Inland Revenue is refusing to give any details of the exercise he is supposed to have carried out by law to make an independent valuation of the prime minister’s acquisition of a two-tumoli property in ODZ land in Zejtun.
He is also refusing to state whether there is an open claim against the Abelas over undeclared stamp duty.
The prime minister is also refusing to reply to questions asking him to produce the commissioner’s valuation report on the purchase, state the name of the government architect responsible for it and whether the commissioner had issued an assessment (claim) after this valuation.
Experienced real estate agents told The Shift that the purchase of such a property, spread over two-tumoli of ODZ land at just €600,000 is a super bargain and a rare find.
The footprint of the prime minister’s property on ODZ land.
“This must have been either some sort of present from the original owners to the Abelas or there are other factors that need to be investigated, such as possible undervaluation for tax dodging and other reasons.”
“Such a property at that price in 2017 is just ridiculous. The least that property would normally fetch on the market is nothing less than €2 million and that is a very conservative estimate,” multiple agents agreed.
An independent exercise conducted by The Shift shows that there are currently no such large properties on the market with an asking price of less than €2.5 million. According to the Remax website, one of the largest real estate agencies, a farmhouse in Zejtun on a 760 plot – one-third of the size of the prime minister’s – has an asking price of €1.2 million (see table).
The suspicions of real estate agents that the property was grossly undervalued stems from a common practice of property buyers declaring they purchased a property for less than what they actually paid to pay less stamp duty and to pass onto the seller part of the price in undeclared cash .
No action by the Commissioner
According to the Duty on Documents and Transfers Act, every contract involving the transfer of property is to be sent to the Commissioner for Inland Revenue for review. Stamp duty is set at 5% of the declared price and settled by the buyer. The seller on the other hand must pay capital gains tax.
The law also stipulated that a board would normally discuss the value of the published contract and decide whether to make its own verifications through its architects.
Sources at the CIR office The shift that when it comes to large properties, the valuation is told deemed automatic. When the valuation is ready, the CIR is to decide to issue an assessment and in the case that the property value is undeclared, issue a claim for the payment of the difference, together with a fine.
The property owned by the prime minister and his wife was acquired at a bargain price.
Any objection to the CIR’s action can be challenged in front of the Administrative Review Tribunal in court.
Investigations by The Shift shows that so far there is no pending case before the Tribunal involving Robert Abela and his wife Lydia Abela.
Asked specifically to state whether a valuation report was carried out by the CIR on the contract as declared by the prime minister, the Director for Property Tax, Josette Galdes, refused to reply.
Neither did she want to state who the architect responsible for the valuation was and whether the department has opened a claim on this file.
Galdes told The Shift she is precluded from divulging such information, even though the same law allows discretion over this issue by the Inland Revenue Commissioner.
The prime minister’s massive property enjoys unobstructed views.
No loans and unexplained wealth
The Shift has already revealed that Robert and Lydia Abela signed the contract to take possession of the Zejtun ODZ mansion on July 10, 2017, just five days after the Planning Authority published its approval of the permit, sanctioning a large number of illegalities on the property for a fine of €45,000. The contract was signed by Notary Dorianne Arapa.
While the PA has so far refused to reply to The Shift on whether the fine has been paid, it was also revealed that the final contract for the property was paid without the need for the Abelas to get a bank loan.
By the date stipulated in the contract, the Abelas had already forked out €510,000. A special privilege (ipoteka) on another €90,000 was canceled by February 2018, again without the need for a loan.
Robert Abela’s yacht needs tens of thousands a year to maintain and operate.
During the time that the original owners, Joseph and Alfrida Camilleri from Marsascala, were seeking the sanctioning of their massive property, Abela and his wife were acting as legal advisors to the PA and raking in some €17,000 a month.
Currently, no works have been started on the refurbishment of the Zejtun property and the Abelas are still residing at a seafront penthouse in Marsascala. The prime minister and his wife also own a large farmhouse in Xewkija, Gozo, in which they are also building a large pool following another Planning Authority permit.
Abela also bought a large Azimut 50 Fly yacht two years ago, which has an estimated value of some €300,000 and needs tens of thousands a year to maintain and operate. The boat consumes 200 liters of fuel per hour.
In his latest declaration of assets, the prime minister, in his mid-40s, declared no outstanding loans with any banks.