When I opened my inbox yesterday morning, I saw a message from the President of Kamra tal-Periti instructing all warrant-holders not to conduct valuation appraisals as stipulated in the newly enacted Legal Notice 60 of 2023 (Valuation of Agricultural Land Regulations).
Clause 2 of this Legal Notice stipulates in no uncertain terms that these regulations establish standards for assessing ‘open market values of all agricultural land’ – that is to mean not just land held under a title of agricultural lease that stems from the Agricultural Leases Reletting Act.
The pretext of the said regulations is, therefore, the ‘open market’. It is thus understood that the said dispositions should also be used for valuation assessments to determine tax assessments associated with land transfers.
This legal notice is also interesting because of its detailed mathematical formulae, based on a number of parameters, including whether or not built structures exist on site, as well as various parameters like wind resistance, ease of access to the site, slope gradient, the depth of soil as well as its structure class classification and salinity.
The Kamra is, however, claiming that the said formulae are incompatible with the standard methods used to arrive at fair market value. In the e-mail I received, it was also stated that practitioners who choose to perform such valuations may find themselves in constitutional proceedings, or worse, personally liable for negligence and unprofessionalism.
‘Għaqda Bdiewa Attivi’ on the other hand, are quite satisfied with the Legal Notice as promulgated. Their representative was quick to point out that periti should not be concerned much about the matter because, at the end of the day, they are not academically qualified to carry out this type of valuations which rest on parameters most architects wouldn’t understand.
In all fairness, ‘Għaqda Biewa Attivi’ may be right to state that not all periti have the training in, say, soil texture classes and salinity. The big issue, however, goes much further than that.
This legal notice is intended to create open market values (rather than ‘socially induced values’) or, at least, that is what Regulation 2 seems to intend.
The odd thing, however, is that this Legal Notice sets a base rate which is to be determined by the Minister. As a matter of fact, it has been reported that the Minister has set a rate of €2,570 per tumolo which, in all honesty, does not accurately reflects the value that such land would normally sell for in the ‘open market’ (thus, under ‘normal market conditions’) as envisaged in Regulation 2.
For a start, Regulation 2 ought to be redrafted in a way that it makes no reference to the ‘open market’ but, if anything, to a value which has regard to our dependence on a sustainable agricultural policy. What I can say is that there are a couple of inspiring European judgments that concede to the notion that a fair consideration dictated by pressing social need does not necessarily have to reflect the open market value. Until then, the set rate of €2,570 per tumolo will continue to remain open to serious questions.