How do permit irregularities affect a property's value in Malta?

Perit Matthew James MerciecaArchitect & Civil Engineer

Building & DesignReviewed: 26 August 2026

The short answer

Formal valuation procedures tied to the banks rely on the legality of a development, so rooms that do not match the permit affect what a property is worth. Some irregularities are easily rectifiable and sanctionable under planning policy; others are not, and those can greatly reduce value. Buy without a bank facility and you absorb that risk yourself.

Legality and value are the same question

Matthew ties the two together at the outset. "More than ever before, I think the value of property, and the formalised valuation procedures tied with the banks, rely on the legality of developments. If rooms are not according to permit, then that is going to affect the value of your property."

Buying without a bank means the check is yours

Where there is no lender in the transaction, nobody is applying that test on your behalf. "If therefore you are buying property without a banking facility, and accept certain things that are not according to permit, you are accepting something that is going to lessen the value of your property." A cash purchase removes the friction — and the safeguard with it.

Two categories: sanctionable and not

Not every irregularity carries the same weight. "Many times those changes that are not according to a permit can fall into two categories: those that are easily rectifiable and, according to planning policy, are sanctionable — whereas others could be not sanctionable, and have created an element that is going to greatly reduce the value of your property." The example he reaches for is a familiar one: "having a bedroom without windows. I've seen this many times."

The bank will not accept what you might

His closing point is the one worth carrying into a viewing: "when you accept such irregularities, at least going through a banking process, such a situation won't be accepted." That is the same wall Dr. Laferla describes from the financing side when a bank refuses a home loan. Which category a given irregularity falls into is a sanctioning question, and the place to establish it is the property's planning history — before you commit, not after.

Sources

Perit Matthew James Mercieca — Yitaku Asks video (valuation procedures rely on legality; sanctionable vs non-sanctionable irregularities; a banking process will not accept such a situation)
Development Planning Act, Chapter 552 — development permission and the regularisation of unauthorised development
Maltese lending and valuation practice — bank valuations test a property against its planning position