Abela bows to developers owning quarries, increases dumping costs by 33% for their benefit

The government has caved in to pressure from Malta’s powerful construction lobby by approving a 33% increase in the maximum price that quarry owners, who are also developers, can charge for accepting construction waste. This move is expected to add further upward pressure on already soaring property prices.

A legal notice published on Friday raises the maximum fee for disposing of construction and demolition waste from €12 to €16 per tonne, while extending a lucrative tax exemption scheme for quarry operators until 2031.

The new rules have already come into effect.

The decision follows months of pressure from quarry owners, who earlier this year threatened to stop accepting construction waste from third parties unless the government agreed to increase the regulated fee.

As first revealed by The Shift in June, the dispute had brought parts of the construction industry close to disruption, with developers warning that projects would be delayed if no agreement was reached.

Rather than resisting the industry’s demands, the government has now opted for a compromise that effectively rewards quarry operators with a higher regulated price while ensuring they continue accepting waste.

Although quarry owners had reportedly demanded an increase in fees of between €20 and €22 per tonne, the government settled on €16 – still representing a 33% increase that will inevitably be passed on to buyers of new homes.

The legal notice also prevents quarry operators from imposing additional hidden charges by defining the maximum fee to include any service fee, administration charge, processing fee, surcharge or any other payment linked to the disposal of construction waste. Operators who exceed the cap risk losing the tax exemption for the entire year, while those who refuse to accept waste without a valid reason also stand to lose the fiscal benefit.

The Commissioner for Revenue has also been granted new inspection powers, at least on paper, to examine quarries and their records to ensure compliance with the new rules.

The Malta Developers Association welcomed the government’s decision, describing it as a positive step that provides certainty to the sector after months of uncertainty.

However, the increase is expected to have consequences well beyond the construction industry.

Waste disposal is a significant cost in every major development, particularly projects involving extensive excavation. Any increase in dumping fees is ultimately reflected in the final selling price of apartments and houses, adding another cost burden that developers routinely pass on to purchasers.

The latest increase comes at a time when first-time buyers and property seekers are already struggling to afford property amid years of relentless price inflation driven by a flawed economic model boosting the population to increase demand, construction costs, expensive financing and loose permitting.

Rather than addressing the underlying structural problems in Malta’s construction waste management system, the government has once again chosen to accommodate the demands of one of the country’s most influential industries.

The construction lobby is one of the main donors to the governing Labour Party.