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LAST UPDATE | 7 Jul 2021
THE DÁIL HAS passed a controversial amendment that allows funds to side-step 10% stamp duty if they lease back houses to the State for social housing.
Last month, the government moved to introduce a new 10% rate of stamp duty on bulk purchases of 10 homes or more last month.
However, the amendment that came before the Dáil this evening will exempt institutional investors from the charge under these circumstances.
Sinn Féin’s Eoin Ó Broin TD was among TDs to criticise the length of the debate, which was given an hour in the Dáil schedule, accusing the government of “not playing by the rules”.
Sinn Féin withdrew a pairing arrangement whereby opposition TDs agree to abstain in a vote if a government TD is forced to be absent from the Dáil due to an unavoidable appointment.
However, the amendment was passed with 74 votes in favour to 59 against.
Speaking during the debate, Minister for Finance Paschal Donohue, who tabled the amendment, said that funds have a role to play in the “provision of rental accommodation which otherwise I believe in many cases would not be built”.
“If we acknowledge we need to build homes at scale, at speed, if we acknowledge that there is a burning urgency and need for the supply of new homes to be quickly accelerated, if we look at what the government is already do with the money that we’re making available… is there a role for the private sector in this?” Donohue said.
The new stamp duty change is aimed at tackling so-called cuckoo funds buying up housing developments from first-time buyers but opposition members have said the new amendment signifies “the white flag of surrender” to cuckoo funds.
Housing Minister Darragh O’Brien has denied these accusations and has accused the opposition of “scaremongering”.
He has argued that the amendment is time-limited and is being brought forward to protect the delivery of social housing for almost 2,500 families by the end of the year.
“In relation to the amendment that we have laid down later this evening, it is to ensure that around 2,400 leases that are currently going through the system, which will be used for social housing and social housing only, would be exempted from the 10% because there would be a risk that some of these would not go ahead,” O’Brien told RTÉ’s Drivetime programme earlier today.
Also speaking on Drivetime, Ó Broin said that “at least 1,000″ of the 2,400 homes referred to already have leases signed, so they are not at risk as the minister claims.
He added that the State should buy the remainder of the homes instead of leasing them from the investors as this would represent better value for money in the long-term.
“If the buyer knows that they’re going to get an exceptionally high rent guaranteed and index-linked over 25 years, that pushes up the cost of that property and then of course the taxpayer has to pay a very hefty bill,” he said.
Stamp duty
The new higher rate of stamp duty is the main component of the government’s response to the ongoing controversy surrounding so-called ‘cuckoo funds’ like the one that bought up the majority of the Mullen Park housing estate in Maynooth earlier this year.
In the Dáil earlier today, Taoiseach Micheal Martin was accused of helping so-called cuckoo funds to evade measures aimed at limiting their role in the housing market with this “sneaky amendment”.
Sinn Féin’s Mary Lou McDonald said the Taoiseach has “not reigned in funds” but is actually facilitating their actions and incentivising them to buy up homes, forcing regular buyers to compete with large investment funds.
“Don’t pretend this helps people stuck in the rental market,” she said.
“This is about big bucks and funds muscling in with the help of this government, into the property market,” she said.
“Same old Fianna Fáil, same old Fine Gael,” she told the Taoiseach, accusing Leo Varadkar and the Taoiseach of living in a “cosy little bubble”.
The Taoiseach moved to defend the government’s plans, stating they “can’t turn off the tap” immediately.
Martin said direct build is the focus on the government, but that the pandemic has slowed their progress.
“We need more houses and right now we don’t have enough supply,” he admitted.
Yesterday, when questioned over the amendment, Martin said the government’s response was being “distorted” with the Opposition focusing in on one single amendment, “as if that constitutes the entirety of Government policy, which of course it does not”.
- With reporting by Rónán Duffy, Lauren Boland and the Press Association
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Credit where due well done although very difficult on families where there is no power. Thankfully we dont get too many storms like the few we had. Anyone see the news the UK still in bits far worse than us.
Still out in rear cross co tipp.fair play to esb networks though cant be easy working true such a backlog
Thank you for keeping this story in peoples mind.So many still have with no idea of when they will be switched back on.
Day 6 without power and im one of those isolated pockets ive been told. Probably be end of week before connection. Im going to go crazy!
A big well done to all the ESB crew, but surely they will consider putting electricity wires down under ground
Think about it….
There are 10s of thousands of KMs of local electricity cabling around the country.
How do you even begin to do that?
It would cost a biblical amount of money.
Or at least cutting back/removing of trees near power lines. A job for Coillte I would think.
There is no utility on Earth that has its rural distribution lines underground for one simple reason: cost. Undergrounding overhead lines would cost many multiples of the overhead cost and this would have to be passed on to the consumer. Our electricity bills are high enough as they are – no one wants to see them tripled, quadrupled or whatever. If it were a realistic option you’d think a place like Florida which suffers multiple major outages every year because of hurricanes would have done it years ago, but no: they have overhead lines as well. Nor would it necessarily result in the elimination of faults – they would still occur due to flooding, cable failures, dig-ins and the like. And it would take longer to repair or replace them. There would also be huge delays in connecting new properties to the network caused by the time involved in digging the trenches, getting permission from landowners and so forth. Nor of course would it be remotely realistic to initiate a programme of replacing the existing network of overhead lines with underground ones. All in all, on the face of it, it sounds like a reasonable proposition but when you examine it deeper it becomes a pipe-dream.
have your say