Finance Bill 2017: From the Seanad

The Dáil went into Committee to consider a recommendation from the Seanad.
Seanad recommendation No. 1:
Section 62: In page 69, between lines 27 and 28, to insert the following:
“Shares deriving value from immovable property situated in State
62. (1) The Principal Act is amended—
(a) by inserting the following section after section 31B:
“Shares deriving value from immovable property situated in State
31C. (1) (a)In this section—
‘Act of 1997’ means the Taxes Consolidation Act 1997;
‘arrangement’ includes any agreement, understanding, scheme, transaction or series of transactions;
‘company’ has the same meaning as in section 4 of the Act of 1997;
‘connected person’ has the same meaning as in section 10 of the Act of 1997 and a person who is connected shall be construed accordingly;
‘development’, in relation to immovable property, means—
(a) the construction, demolition, extension, reconstruction of, or the material alteration or refurbishment of, any building, or
(b) the carrying out of any engineering or other operation to adapt the immovable property for materially altered use, and developed and developing shall be construed accordingly;
‘immovable property’ means immovable property situated in the State that is not residential property;
‘interest’, in relation to a partnership, means a partner’s share or interest in a partnership;
‘IREF’, subject to paragraph (b), has the same meaning as in section 739K(1) of the Act of 1997;
‘units’ has the same meaning as in section 88(1)(a) of the Act of 1997.
(b) For the purposes of the definition of ‘IREF’ in paragraph (a), the definition of ‘IREF’ in section 739K(1) of the Act of 1997 shall be read as if there were inserted after the words ‘investment undertaking’ in the first four places where they occur the words ‘or collective investment scheme to which section 88(1)(b)(ii) applies’.
(c) For the purposes of this section, where a company, IREF, partnership or a connected person secures the development of any immovable property, the company, IREF or partnership shall be regarded as developing that immovable property.
(d) For the purposes of this section, if, by any one or more transactions or by any arrangement or scheme, whether concerning the immovable property or stocks, marketable securities, units or interests deriving value from that immovable property, there is a disposal of the immovable property or a transfer of control over that immovable property, that disposal or transfer, as the case may be, shall be a disposal for the purposes of this section.
(2) (a) This section applies in relation to—
(i) stocks or marketable securities in a company, other than an investment undertaking within the meaning of section 739B of the Act of 1997 that is not an IREF,
(ii) units in an IREF, or
(iii) interests in a partnership, that derive their value, or the greater part of their value, directly or indirectly, from immovable property.
(b) For the purposes of paragraph (a), a reference to deriving value indirectly from immovable property shall include value that is derived from stocks, marketable securities, units or interests in relation to which this section applies.
(c) Where the company, IREF or partnership referred to in paragraph (a) (referred to in this subsection as ‘the first-mentioned company, IREF or partnership’) derives its value from stocks, marketable securities, units or interests in a company, IREF or partnership (referred to in this subsection as ‘the second-mentioned company, IREF or partnership’), the circumstances in subsection (6) shall be deemed to apply to the first-mentioned company, IREF or partnership where they apply to the second-mentioned company, IREF or partnership.
(3) Where stocks, marketable securities, units or interests in relation to which this section applies were owned at one time by one person, or by persons who are acting in concert or who are connected persons, and are conveyed or transferred by that person or those persons in parts—
(a) to another person, or
(b) to other persons who are acting in concert or who are connected persons,
whether or not on the same or different occasions, the several conveyances or transfers shall, for the purposes of this section, be treated as a single conveyance or transfer.
(4) Notwithstanding section 88 or the charge to stamp duty applied under the Heading ‘CONVEYANCE or TRANSFER on sale of any stocks or marketable securities’ in Schedule 1, where the circumstances in—
(a) subsection (5), and
(b) subsection (6),
apply, the conveyance or transfer on sale concerned shall be chargeable to stamp duty under paragraph (4) of the Heading ‘CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance.’ in Schedule 1.
(5) The circumstances referred to in subsection (4)(a) are that—
(a) there exists a conveyance or transfer on sale of stocks or marketable securities, units or interests in relation to which this section applies, and
(b) such conveyance or transfer on sale results in a change in the person or persons having direct or indirect control over the immovable property concerned.
(6) The circumstances referred to in subsection (4)(b) are that it would be reasonable to consider that the immovable property concerned—
(a) was acquired by the company, IREF or partnership, as the case may be, with the sole or main object of realising a gain from its disposal,
(b) was or is being developed by the company, IREF or partnership, as the case may be, with the sole or main object of realising a gain from its disposal when developed, or
(c) was held as trading stock (within the meaning of section 89 of the Act of 1997) by the company, IREF or partnership, as the case may be.
(7) Where—
(a) there is a change in the ownership of a company, IREF or partnership in relation to which this section applies that results in a change in the person or persons having direct or indirect control over immovable property,
(b) the circumstances set out in subsection (6) apply to the company, IREF or partnership concerned, and
(c) any contract or agreement relating to stocks, marketable securities, units or interests, giving direct or indirect effect to such change is not otherwise chargeable to stamp duty,
then the contract or agreement shall be treated as a conveyance or transfer on sale for the purposes of subsection (5).
(8) In calculating the part of the value of the stocks, marketable securities, units or interests that is derived, directly or indirectly, from immovable property situated in the State—
(a) account shall not be taken of any arrangement that—
(i) involves a transfer of money or other assets, apart from immovable property, from a person who is connected with the company, IREF or partnership, as the case may be, in which those stocks, marketable securities, units or interests are held,
(ii) is made before a conveyance or transfer on sale of stocks, marketable securities, units or interests in relation to which this section applies, and
(iii) the main purpose or one of the main purposes of which is the avoidance of liability to any tax or duty,
(b) regard shall be had to the gross value of the immovable property from which that value is derived.
(9) Stocks, marketable securities, units or interests in relation to which this section applies shall be deemed to be land for the purposes of subsection (1)(b) of section 83D (inserted by section 61 of the Finance Act 2017) where, following the conveyance or transfer on sale, the immovable property concerned satisfies the conditions for a repayment under that section.”,
(b) in section 88(1)(b) by substituting “Subject to subsection (2) and section 31C (inserted by section 62 of the Finance Act 2017)” for “Subject to subsection (2)”.
(2) (a) Subject to paragraph (b), subsection (1) shall have effect as respects any instrument executed on or after 6 December 2017.
(b) Subsection (1) shall not have effect as respects any instrument executed before 1 March 2018, where—
(i) the effect of the application of subsection (1) would be to increase the duty otherwise chargeable on the instrument, and
(ii) the instrument contains a statement, in such form as the Revenue Commissioners may specify, certifying that the instrument was executed solely in pursuance of a binding contract entered into before 6 December 2017.”.

This matter was dealt with in the Seanad but I said on Report Stage in the Dáíl that a further change to the Bill was needed. The change was accepted by the Seanad and is now before the Dáil for approval. As Members are aware, the rate of stamp duty on non-residential property was increased to 6% on budget day. That rate applies to all related conveyances executed after 12 midnight on 10 October 2017. This measure is intended to ensure that the new 6% rate will also apply when non-residential property held by an entity such as a company is indirectly sold by way of a sale of the shares in the company and, effectively, the company itself. The rate of stamp duty on non-residential commercial property is now 6% and the rate applied to the sale of shares is 1%.

The stamp duty rate differential provides an incentive for parties involved in large property deals to seek to structure transactions in such a way that they will avoid the 6% rate. Such avoidance could take the form of the placing of property into a so-called corporate wrapper or envelope before then selling on the corporate entity itself by selling its shares, which would be subject to a 1% stamp duty rate. The measure also targets partnerships and certain investment undertakings used for collective investment purposes which would hold a significant amount of Irish property or interest in Irish property. The measure is essentially aimed at entities that deal in land or develop land-----

On a point of order-----

If the Deputy lets the Minister finish, he will get an opportunity-----

I know, but we do not have any printout of what the Minister is relaying to the House.

We are on Committee Stage.

We are on Committee Stage.

We are on Committee Stage, and all the relevant documents were supplied to all Deputies. The Minister may continue.

The measure is essentially aimed at entities that deal in land or develop land for non-residential purposes. Not all entities deriving value from property will be affected. For example, a hotel business, car park business or office rental business might be carried on by a company. Although the greater part of the value of such businesses might be attributable to their property assets, the sale of such companies by sale of their shares will continue to be chargeable to stamp duty at a rate of 1% because they will not have acquired or developed the property with the sole or primary aim of making a profit or gain from its disposal but from using the property for its core business.

This is an anti-tax avoidance measure that is being introduced. I wrote to the relevant Opposition spokespeople to explain the background to the measure and why we are introducing it. I commend the measure to the House.

I do not intend to delay proceedings. I welcome the anti-avoidance measure in the Bill. It is appropriate to say that this is not the best way to legislate. The recommendation itself runs to a number of pages, and it is always better to scrutinise such things in committee, to have the appropriate time to do so, although I acknowledge there is no time limit at this point, and to have those staged phases of being able to consider legislation on Second, Committee and Report Stages. That is not the case here but, that being said, the measure is welcome. I have raised this through parliamentary questions and in the House as the Bill was going through. An increase in the rate of commercial stamp duty is something we called for, and I welcome the fact that the Government has moved to increase it. We are mindful that commercial properties were at the heart of the construction collapse and the banking collapse. Despite many people thinking it was a housing problem, it was very much a commercial one. Therefore, we as a State need to be very mindful when we see an overheating market or such signs beginning to emerge in respect of commercial property. When the stamp duty rate was increased from 2% to 6%, it gave that incentive for companies to involve themselves in avoidance schemes. This was also flagged by Davy Stockbrokers. It flagged that this was likely to happen, and real estate investment trusts, REITs, were mentioned in this regard.

I welcome the recommendation and I have no issues with it. I also welcome the briefing note. We were quite considerably aggrieved and displeased by the fact that we were being notified of amendments but were not receiving the relevant briefing notes. A comprehensive briefing note was provided to us, which was very helpful and which speeds the whole process up. I hope this practice will continue, and I thank the Minister's officials for same.

Another matter I wish to raise concerns the costs. We are aware that the four-percentage-point increase from 2% to 6% is estimated by the Government to raise €376 million. I will not rehearse all the issues again. We have serious doubts about this. I raised on budget night the validity of this, how robust these costs will be and what the amount of money will be. Will we see that level of transactions? There is serious doubt in this regard. What is alarming to me is that we found out from the Revenue Commissioners yesterday that there was no engagement between the Department and Revenue to ascertain the figure of €376 million. Revenue informed the committee yesterday that this was simply taken from the Revenue ready reckoner. The ready reckoner is a fantastic tool and is there to inform us, but given we were dealing with budgetary matters, particularly one that will raise €376 million, a telephone call should have been made to Revenue to ask it, given the caveats in the legislation, its estimation of the amount of revenue that would come in from this measure. I am deeply surprised that this did not happen. It only adds to my concern that we may see a hole emerge in the budget because of this measure.

The last thing I will say concerns the anti-avoidance scheme. Given there is now more of an incentive for people to avoid paying the 6% commercial stamp duty, I ask the Minister that if Revenue identifies such schemes and they are brought to his attention, they be brought to the attention of the finance spokespersons of the Opposition as well in order that we move quickly and speedily to close down any kinds of avoidance schemes that may emerge.

I also thank the Minister and his officials for the note we received on this new section, which is a significant recommendation. I have no difficulty with strengthening the anti-avoidance provisions. Clearly, the increase in the stamp duty rate would have created a very strong financial incentive for transactions to be structured in a manner which would avoid the 6% rate.

I will ask just two questions. First, regarding the question of double taxation, it is my understanding that if the home jurisdiction of the company also applies stamp duty, the company will have to pay stamp duty in Ireland and in that home jurisdiction, therefore paying on the double. We have double tax arrangements with the UK but, as I understand, not with other countries regarding stamp duty. Will the Minister clarify this point? Second, regarding enforcement, this section will apply to companies outside of Ireland, and there is some mutual recognition of tax judgment rules. However, the likelihood is that change will be a burden on the compliant, and the consequences may not have been fully worked out. Regarding enforcement for companies that are based abroad and are incorporated and resident abroad, how will the enforcement work its way through?

On a point of order-----

The Deputy will get a chance to speak in a moment.

May I make a point of order? We are debating this important recommendation to this legislation but the House does not have a quorum. I wish to call a quorum, más é do thoil é.

Notice taken that 20 Members were not present; House counted and 20 Members being present,

I remind Deputies that their contributions should be relevant and not repetitious.

I am pleased to see this recommendation included in the Bill. I pointed out to the Minister on budget day that he had left a glaring hole in the technical framework of the budget by allowing company structure to be used as a mechanism to avoid paying stamp duty. The expected revenue from stamp duty is a considerable complication in his budget arithmetic in a situation where he was under heavy pressure to spend more than seemed to be available at the time. I welcome his quick response to address what was, during the last boom, one of the worst and most widely practised instances of tax avoidance and abuse in this city and across the State. This was a notorious loophole that, prior to the cash, cost the Exchequer tens of millions of euro. I do not know whether Revenue carried out an examination of the total cost to the State from this fairly standard mechanism of avoidance, but it was certainly considerable.

I accept that the intent by the Minister in this recommendation is to close off that particular loophole. However, in regard to the valuation of shares versus the underlying valuation of a property, as set out in the recommendation, is the Minister satisfied that the real market value at which the property is being sold for stamp duty purposes is, in fact, reflected in the value of the consequential share deal? Has that potential disparity been accounted for in drawing up this provision? In other words, as it is a transfer of share, it is possible to vary the price of the shares downwards while the property value is up there, which amounts to an avoidance mechanism.

Another issue I raised on budget day is the resting of contracts. Solicitors and others would argue that this is a feature of the property business. However, at the height of the last boom, it allowed transactions to drag on for years and was effectively a mechanism for property owners, by failing to conclude a deal, to avoid stamp duty. In some cases, a licence to develop the land and enter in on the land was given but the property was not actually transferred. We saw examples of this practice in my constituency and the Minister's constituency when the Department of Education and Skills acquired school sites at extraordinarily high prices. Developers engaged in lengthy delays while, one presumes, they got technical, accounting and legal advice on this particular practice. There was a delay while they set up the arrangement and although they subsequently gave a licence to develop, very often the actual ownership of the site was delayed for a further extended period. I am not clear whether it would require amendment in law to address this issue or, rather, regulation by the Revenue Commissioners such that they would examine the reality of these types of transactions. Any site or property bought for development might be subject to this licensing system rather than there being an actual transfer of the land.

A report published yesterday by the Economic and Social Research Institute, ESRI, stated clearly that the economy is heading into another bubble, particularly in respect of land and house prices. There is no doubt about that. As such, although it is not part of the current discussion, we must find a mechanism to reduce bubble prices, especially in the case of house prices and assets being purchased in developing areas for community purposes. Otherwise, the State will be taken to the cleaners or forced to abandon the acquisition of essential sites, including for nursing homes, schools, community centres and sports facilities. The Department, the Minister and the Revenue Commissioners must be alert to that danger in view of the ESRI report. The evidence is there that we are at the beginning of, if not already in, a property bubble. Certainly, site prices are rising at an extraordinary rate. If we look back to the detailed reports on what caused the last crash, one of the trigger factors was the bubble in development land prices. There is a risk that developers will seek to get back every halfpenny they lost in the crash, and will do so at the collective expense of taxpayers.

I welcome this necessary recommendation. Will the Minister clarify whether any companies have got away with exploiting this loophole since the budget and, if so, what type of moneys are involved?

The last time we discussed stamp duty with the Minister in the House, I asked several questions that were not answered. My concern relates to the situation of people who paid a deposit on a site earlier this year but have since encountered legal difficulties that delayed the process. We are in muddy waters here and the responses we are getting from the Department do not shed any light. I understand that in the case of one-off sites, there are problems that can arise compared with the situation regarding housing developments. People who paid a deposit on land before last March but subsequently came up against legal problems - where, for example, somebody has died - which required getting paperwork right and working matters through with the State, appear to be getting sucked into the efforts to crack down on stamp duty loopholes. Will the Minister clarify the status of people in those circumstances? We cannot have a situation where companies are getting away with not paying duty while a small farmer who buys a few acres of land is treated differently.

A relevant question was also asked about double taxation. If the tax is being paid in another country, is it double taxation? If Ireland has an agreement or arrangement on that, what way is it? In fairness to Deputy Pearse Doherty, much of the budget is built on the €376 million to be provided by this measure, which may not turn out to be as good as the Government expects. I am aware from speaking to auctioneers that there is a lull in land. Some people, unfortunately, cannot get the extra money that is required.

I thank the Department officials for spotting this. There was much debate and many amendments in the Chamber from Deputies Fitzmaurice and Michael McGrath and myself about the whole stamp duty issue in respect of land and property. I have dealt with those real estate investment trusts, REITs and such operations. I said at the time that they were Ponzi schemes. We had huge opportunities to bring in some much-needed revenue from these faceless institutions, and we should have done that.

I am delighted that the Seanad was not disbanded when some in the Minister's party tried to disband it, or else this amendment would not be back before the House tonight. The legislation would have been gone on out away from here. I salute whoever it was who spotted this in order that we can block the loophole. It could have cost the State a lot of money. We see how ordinary taxpayers are penalised and put through the mill and scrutinised. We see how women were supposed to leave the Civil Service when they married. Those women are being treated horribly by the State. It is totally inequitable, yet the Government speaks of equality. We have not even got the money to start there. It is vital that there is a sense of fair play. We must be more watchful and have more eagle eyes in this regard. It may mean hiring more staff into the Department with expertise in this area - expertise that I and many Deputies here do not have - to watch for this kind of scheme or anomaly where people can get out under the gap and go away laughing. We, along with Revenue and our Department officials, need to be as creative and as diligent at watching those and blocking those loopholes as quickly as possible. The Taoiseach at the time said he got a wallop when the people rejected the proposal to get rid of the Seanad. I am glad the people did not get rid of it because the Seanad, as well as this House, has an opportunity to scrutinise legislation. It is similar to the referendum to give more power to Oireachtas committees. I am glad that the people also saw that proposal for what it was. It is fortuitous that this amendment is back before the House tonight and we can have a short debate on it.

I hope the Acting Chairman will not forget about me.

I said, finally, I call Deputy Michael Healy-Rae.

I thought the Acting Chairman was going to call the Minister.

How could I forget about Deputy Michael Healy-Rae?

Never forget Kerry.

I am sorry, Acting Chairman. I am glad of the opportunity to address this very important issue. Budgets can often throw up issues that cause confusion and uncertainty in the markets. There was a lot of concern about stamp duty on land transfers. Deputies were inundated with questions and when we asked questions in the Dáil, there seemed to be a degree of uncertainty as to the implication of the measure, especially in cases where there might be complexity in the deal itself, as Deputy Fitzmaurice has pointed out. This caused further confusion. I am glad of any clarity that can be brought to the situation. People had deals that were put on hold and they were going from solicitors to accountants and back to their clients. They were also going to politicians to seek clarification. It caused awful confusion.

Deputy Mattie McGrath never ceases to amaze me. He is obviously a very seasoned, experienced and wise politician and he has made a terribly important point in this whole debate. Consider what would happen if the geniuses who thought it was a good idea to abolish our town councils had gotten away with their genius idea to abolish the Seanad, which was like a race to the bottom. What were they really trying to achieve? I would seriously question the political judgment of those who supported that move at the time. Any politician who had thought it a good idea to abolish town councils and then thought it was a good idea to abolish the Seanad certainly was going on some other motive. It was not for the greater good of the people on this island. We need political representation-----

I am not. Are we in a hurry?

I am sorry. I thought the Healy-Raes and the McGraths were a leg of the Seanad.

Are we in a hurry or something?

I do not know. I am referring to the relevance of the debate.

This is very relevant. I am sorry if the Acting Chairman is in a rush but I am talking about-----

Repetition is included. Deputy Mattie McGrath had mentioned that aspect also.

Maybe someone else could take the Chair if Deputy Breathnach is too busy. My point is about political scrutiny. It is very important that we have accountability and scrutiny. This is why we needed clarification, especially on the whole issue of land transfers on deals that were in process which were held up because of the uncertainty after the budget. At all times political accountability and political scrutiny is of great importance. That is what politicians are there to do, to represent the people who elect them. Now I am finished and I thank the Acting Chairman.

I thank all Deputies for their comments on this section. I will address each in turn, and I will begin with Deputy Pearse Doherty's comments. I take his point about the stage of the process at which we are introducing the amendment. It is a fair point. On Committee Stage I had indicated that a further measure would be necessary. It took my Department some time to make sure we could bring in an amendment we believed would be adequate to deal with a potential vulnerability that could lead to tax avoidance. On Committee Stage I said that I would come back to do this, which I have done. Clearly, in the future if we are in a position to deal with this matter on Committee Stage, that is what we would want to do.

With regard to the Deputy's comment on the yield, we have exchanged views on this on Committee Stage and on Report Stage. Early indications on transactions that have taken place since budget day are that the 6% rate has not deterred or significantly affected the number or value of transactions. We continue to believe that the yield estimate for this measure in 2018 will be delivered. The overall additional yield, however, to be delivered by this measure is a very small percentage of the total tax take we expect to collect next year. There are other reasons for implementing this measure, especially indicating very clearly that we should move into a place where, if we change a rate to stimulate a part of the economy and the part of the economy recovers, we should then be willing to review what that rate should be. A figure of 2% is unsustainably low given that for most of our recent history that rate was at 9% and then moved to 6%.

I am glad that the note we shared was of help to colleagues and it is hoped it will play a role in facilitating the passage of this message here tonight. I heard the views of Deputies about the role of notes such as this into the future.

On Deputy Michael McGrath's questions around double taxation agreements, he is correct. We have one stamp duty double tax agreement with the UK. Other than that particular agreement, stamp duty is outside Ireland's double tax agreements. Do we think this will yield a risk of double taxation? It is our view that it will not because stamp duty is a jurisdictional tax.

In other words, tax is levied where the transaction takes place. The Deputy is correct in saying that we only have a single double taxation agreement.

On possible compliance difficulties that might be caused as a result, this regime will apply to companies or funds located outside Ireland but where the property transaction takes place in Ireland. We do not believe that any compliance costs will be incurred by virtue of obeying this change in our law.

Deputy Burton referred to how, when changes in price levels are apparent, that the taxation regime should reflect that. I agree with her entirely which is why I believe this is the correct measure. It will deliver the yield I mentioned and it is the right measure to take because of the price levels we are now seeing in the economy for commercial property. On Deputy Burton's question about the resting issue, I am told the legislation which deals with this is the Finance Act 2013. My understanding is that the correct legal provisions are in place to deal with this matter but if the Deputy has any concerns on its implementation she should let me know and either myself or the Revenue Commissioners will respond.

Deputy Fitzmaurice and another Deputy asked if we believe that in the period between the stamp duty measure being implemented and my bringing this measure to the Oireachtas this evening we might have lost tax and if we believe any companies might have taken advantage of that period. The answer is "No" because if one looks at the length of time that has elapsed between the change on budget night and where we are now, that period was not sufficiently long to facilitate the setting up of any entities that could have led to the avoidance of the 6% rate. We do not believe that any tax has been lost due to the time which has elapsed but we believe that if we had not introduced this measure, we could see entities being formed that would lead to the avoidance of the 6% rate which is why we are making this change. In terms of clarity regarding transitional periods, it was, by and large, the point when a contract was signed. If a contract was signed before this measure was implemented, it is liable to the lower tax rate. If the contract was not signed, it is liable to the higher rate of 6%. The Revenue Commissioners published a note on this on its website and I can have it passed on to Deputies Fitzmaurice and Mattie McGrath, if it would be helpful.

On the points made by Deputy Mattie McGrath, it is in recognition of the danger of loopholes and vulnerabilities that we are making this change.

In regard to Deputy Michael Healy-Rae, I will leave a debate on the merits or demerits of Seanad abolition to another day. Suffice to say, it is still there. I said that when I was in the Dáil, we would return to this. While the Seanad has much wisdom and many virtues, we said it was an issue we would come back to but I thank the Deputy for his contribution.

The only Deputy who has indicated that he wishes to come back in is Deputy Mattie McGrath.

I thank the Minister for his assurances but how can he assure us that there was no loss to the State during the period when this loophole existed? Deputy Fitzmaurice and I tabled an amendment on budget night and appealed to the Minister and to other parties on behalf of small businesses, shop keepers and whatever. We talk about the rejuvenation of rural Ireland and of towns and villages but Deputy Fitzmaurice and I were approached by people who had been caught in the middle of a transaction. These were people who had gone to the bank and had borrowed as much as they could or people who perhaps had support from family members because the business was so weak and insecure, they would not get the loan from the bank. These people were extended beyond their limits. How are these people going to find the 4% extra for this 6% rate? They cannot.

We appealed to the Minister to give these people some window of opportunity that would allow them to conclude their deal and leave the rate increase to 1 January 2018, which we are nearing. People have approached me who had done deals and had, as I said that night, spit on the hand and shook hands but there was delay with the accountants, tax clearance or solicitors, who as we know, are often not very fast in their work, and they did not have their paper work ready with all their ducks in a row and everything done. These people were caught by that and it places a very onerous burden on people with young families looking to buy premises, especially shops that might have closed or that are going to close, filling stations or other businesses that pay rates, wages, tax, light and heat and keep a village alive. That is the difference. We wanted that window of opportunity and I was very disappointed - Deputy Fitzmaurice can speak for himself - that the Minister did not provide that window.

Compare that to this loophole lying open for the big fellas to exploit again. The Minister tells us that no revenue was lost but can he give us proof of that at the year's end? There are other documents which the Minister promised us. We are not in favour of the big people but are trying to look after the little people and their transactions. These people are also in the Acting Chairman's constituency. He has just looked at me as though he was in an awful hurry. I know there are Christmas parties on tonight but there is time enough for the parties.

I am not in any hurry, the Dáil sits until 11.15 p.m. Deputy Fitzmaurice is indicating that he wishes to come back in too.

Yes, but I am not finished. We are all in a hurry but the hurry goes off us the same as it comes on us.

Relevance please. Relevance and repetition.

It is not repetition.

It is not repetition. The Acting Chairman said the same thing to me too.

What are we repeating? I am entitled under the-----

Unless the House is on fire, I think that we have a right.

Deputy Mattie McGrath should continue.

Thank you. We want support for these ordinary people, ordinary families and ordinary business people who put their hands in their pockets, borrowed as much as they could and perhaps had support from families. Some may also have had some money from the credit union thrown in. We are not talking about the Four Roads to Glenamaddy, like the former Taoiseach announced in Edgeworthstown one morning. He did not know which road to travel, but whatever one he went on it had bigger potholes than the last one. It was only a Ponzi scheme. It would not give a euro for any community or private projects that wanted it. We want to support those people. I am very annoyed that the Minister would not provide this window until 1 January. I do not know where the solicitors were, they might have been on holiday or whatever, but there are many reasons things are delayed. I know first hand of several families who have been caught in this trap and who now have to come up with the extra 4%, which they are unable to do.

I hope I did not repeat anything there.

No. I call Deputy Fitzmaurice.

The Minister seems to be skipping over the scenario that I put to him. I am not happy with the answers that I have received from the Department on different cases. I asked one specific question. Last March a person bought land and put down the deposit. There were legal issues. The deal was done. The solicitor who was dealing with the other side - for the person who died - had to bring affairs up to date. We are talking about a person who bought land in March, paid the deposit and now does not know if they will have to pay the higher rate of stamp duty. We have tried to get clarification on this, along with other scenarios, but we are not getting the clarification we need. I want to know the answer, especially for those with small farms for whom it is costing a lot of extra money. Some €10,000 or €12,000 might not be much to a big company but it is a considerable sum for a small family farm, for instance. This is our big problem. We cannot say "Yea" or "Nay". One would not know what to make of the material that was given to us. Is the response "Yes" or "No"? Something must be done to clarify the matter in cases where someone had paid the deposit.

There was a legal issue on the seller's side to be tidied up, but they had it done in good faith six months before the budget. It was not done on the last day or at the last minute.

The Minister has told Deputy Mattie McGrath that there are other countries with which we do not have agreements. What is the payment system for these countries? Is it a double payment system? The Minister needs to clarify the matter for those companies that are based in Ireland or that come here. He told Deputy Mattie McGrath and me, when we asked about stamp duty at the Oireachtas Joint Committee on Finance, Public Expenditure and Reform that when the Finance Bill 2017 was being brought to a conclusion, he would deal with the issue.

The vulture funds are rampant. I know of someone who is paying what is owed in two tranches over a year. The vulture fund is looking for 10% interest and wants costs on top. That is skulduggery. The vulture funds are not accountable and we cannot rein them in. It seems the Government does not want to do anything about these scumbags as there is no talking to them. It is not the same as owning a house worth €130,000 and owing €200,000. Then the person is on the pig's back because they have to take it. They are ruthless when there is land that could be an asset and they do not give a damn about a Deputy or anyone else ringing them. I spent a few hours recently with a person who was in a bad state. He is going the full distance and paying every penny because the vulture fund refused five offers. People are helpless. This is a wound starting to fester because they are coming after people, and as politicians, we have done nothing to try to help them. The vulture funds have bought loans at 30% and 40% of their value. We have sold the country to foreigners who are now selling it back to us and on every euro they want to make two or three. It is vexing.

I was told that the vulture funds Promontoria and Capita were in and out of the Department of Finance regularly. Will the Minister confirm if that is case? No one is reining them in, as I was told by a member of the Minister's party. He needs to know what these scumbags are doing around the country. The young guns in fancy offices do not give a damn about the people we are trying to represent and perhaps save a life, a family and a farm. It is not big money. I am talking about people who owe between €40,000 and €170,000 or €180,000, and €300,000 is the most. It is not digital money. I offered €24,000 on a €40,000 debt and kept making proposals, but the vulture fund continued to refuse. The person in question is going to sell stock; the family are going to help them to pay the full amount, but the vulture fund has refused, stating it wants costs and 10% interest because I proposed paying one part in March and the second the following March. I have it in black and white in an email. That is the only way I can work to save a family being abroad on the side of the road.

That is what the vulture funds are doing and my blood boils when I am in front of them. It is as if the Black and Tans were back.

They are foreigners and we cannot even get to them directly. We talk to the subbie they have hired called Capita or a new name. They change their companies regularly. The Minister needs to forget about politics. We are talking about human beings all around Ireland. They are Irish people whom the foreign companies have bought. There might be 30 or 40 companies, for example, all of the Promontorias, Aran and so on, as well as Cerberus. There is one thing behind them: torture for families in this country, which is unacceptable, but we can do nothing about them because there are no regulations for them. It is bad enough that someone is going to pay for what he or she bought and that they will make 60% on it. If they bought a farm for €15,000, they will get €40,000 and want 10% interest and add costs. They are looking for blood money. This cannot continue.

I want to take up where Deputy Michael Fitzmaurice left off.

It must be relevant.

I know a family who were ready to pay back the amount they owed, but the vulture funds would not accept it. They were paying back every penny they owed. They got money from family and friends, but the vulture funds will not accept what they are giving them. They will lose their home and business as a result. It is very unfair. As Deputy Michael Fitzmaurice said, they are Irish people. They are our own who were hit by hard times, as they hit many others, as well as businesses. Now, after all the struggles, it looks as if the vulture funds have an idea that they will get double the amount somewhere else and do not want to give it back. They bought it for only one third of what they are asking for now and are still not happy with what they are getting. They want to suck the last drop of blood out of the poor people concerned.

In respect of the window of opportunity on stamp duty, I will give the Minister a case in point. A farmer had to purchase the place alongside his land. It came up for sale when he least expected it. As this only happens once in a lifetime, he did the deal before the Minister announced the changes to stamp duty rates. It has meant an extra cost of €22,000 for him. He had borrowed to the hilt and got money from family and friends to make up the cost. He was not prepared to purchase this place, but it came up for sale. Every farmer has been taught that he or she must expand to survive. This go-ahead man in his 40s has to pay the extra stamp duty. It is not fair.

It is the same for another person who bought a business and is being hit with extra stamp duty which they did not bargain on. It is very unfair that some time was not given. It is grand to say the deal was done between the purchaser and the vendor, but solicitors and auctioneers take time. It was not the fault of the purchaser, the poor farmer. He is now caught in a trap and not sure if he can make up the difference in the money required because the extra stamp duty will have to be paid. I am sorry that there is not a window of opportunity to help him. I have met many people who are in that situation, but they are the two I can remember clearly.

I have been reading the recommendation and while it is a long section, it concerns shares deriving value from a moveable property situated in the State. As it is not about vulture funds, I will have to ask anybody else who speaks about them to desist.

Of course, it is about them.

It is not, unless I am reading the wrong section.

I will respond to the three questions that have been put to me. First, in relation to the timing and as I have said on a number of occasions during the passage of the Bill, if the binding contract was entered into or signed prior to budget day and a conveyance is executed before the end of the year, the rate is 2%. Otherwise, it is 6%. We made that clear in the immediate aftermath of the budget. As to whether I am meeting the so-called vulture funds or companies named by Deputy Fitzmaurice, the answer is "No, I am not". On the question that was put to me for a window of opportunity, if I did what Deputy Mattie McGrath suggests, I would create a window of opportunity for tax avoidance. The whole purpose of the measure and what we are trying to do is to shut down an opportunity for tax avoidance.

If I were to say I was bringing in the measure now and that it would not take effect until 1 January, I would have many interests involved in the holding and selling of property making a swathe of transactions at the lower tax rate.

I did not ask about that.

Deputy Mattie McGrath and others would, justifiably, accuse me in that case of creating a huge loophole which many would seek to take advantage of. I am in the business of trying to close those kinds of loopholes down rather than to open them up.

The question is-----

The Deputy can speak as often and for as long as he likes as long as it is about the recommendation.

Of course, it is about the recommendation and shares deriving value from immovable property in the State. We have a lot of immovable property in the State in the formation of land mass and farms, which Deputy Fitzmaurice spoke about. The Minister did not answer the question he was asked by Deputy Fitzmaurice which was whether it was true that these people have open access to his Department. They had with his-----

He just answered that.

I have just answered that question.

I am sorry if he did.

The Minister answered it.

I accept that. I did not hear. I was looking at the recommendation which the Leas-Cheann Comhairle said was not relevant to scrutinise it. It is about property situated in the State. The Minister is misleading the House and me. I did not ask him for that.

Hold on, Deputy Mattie McGrath. It is very wrong to say the Minister was misleading the House.

I withdraw that so. I was talking about small business people and the Minister came back to say he was blocking a loophole. This loophole is completely different. What I was looking for related to small businesses and transactions involving families or the private entrepreneurs we badly need to keep in our rural towns and villages. By rural towns and villages, I mean places in Kildare too. Deputy Healy-Rae said earlier that Kildare was not in rural Ireland, but there are many villages and small towns in Kildare which are desolate and, as such, it is. I was not looking for loopholes like this to be maintained; far from it. That is why I say, if the Minister is not misleading me, that he is being disingenuous. That is what I want and it is what Deputy Fitzmaurice wanted that night. We appealed to the Minister and put down an amendment which was voted on to give people until 1 January, which is only around the corner, to get their affairs in order, wake up their solicitors and accountants and get their tax certificates, the rest of the money and the deal over the line. Those are people who had deals done. They had spit on their palms, shaken hands and agreed and gathered up the money. That is what I was talking about. I am in favour of all the multinationals and big institutions being prevented from taking advantage of any loophole they see. They are like seagulls landing in the yard when they see one. They would take the false teeth out of one's mouth if one were not careful.

The vulture funds were going in and they had too much access to Government. Deputy Fitzmaurice is 100% right on that. I raised an issue with the Tánaiste last week about a farmer in north Cork and I handed him details on that today. An honest, hard-working family man is trying to do deals with a bank that has dragged him through the courts for two or three years while I and other intermediaries and financial agents have tried to intervene. They will not talk to anyone and just keep going to court because they smell the fact that land prices are rising and that this man has some. To hell with his family and his business; all they want is a pound of flesh. It is not a pound of flesh at all; it is a stone of flesh. As Deputy Danny Healy-Rae said, they want to suck the life out of these families who are being terrorised. They do not get much solace in the Four Courts either. This is happening at enormous expense. They want interest and costs, which are enormous for the high-fliers they have engaged. One never meets a person one can do a deal with. AIB is one of the worst culprits and will not engage with customers. It is the job of the Minister for Finance to ensure they engage and talk. These are our own people being marauded and plundered. I hate to call them "foreigners" but they are outside-of-State vulture funds and they have no interest. We have a few of our own vulture funds which have grown up in our own country.

Deputy McGrath-----

The big horse interests are buying up everything as well and must be looked at. Deputy Fitzmaurice and I put an amendment on a plate for the Government on that but it would not touch it. It should have. They will not sell the property to the farmer or the house back to the family for the same price or 70% of the cost when they came up with it through family and borrowings, but they sold it to a vulture fund or some other Ponzi scheme for 30%. The balance should be made up with the difference in stamp duty. Hit them where it hurts with that and get money in for our cataracts and people who need services.

I do not want to curtail Deputy Mattie McGrath but he might indicate what he is referring to. He is making a Second Stage speech.

I am not. I would not do that to the Leas-Cheann Comhairle at this hour of the night.

The Deputy is here long enough to know.

I know he has a party on tonight.

I am here for as long as I have to be.

I will carry out my duties and the Deputy will stay within the rails.

Make no suggestion that I want to get out of this House.

I withdraw that. I know the Leas-Cheann Comhairle is here most nights as late as me.

That is not the issue.

I accept that. I will conclude. Ample opportunity was there with the amendments put down and we would not be here talking about this tonight only for Department of Finance officials and the Seanad sending it back here to us. That is the value of having the Seanad. We have an opportunity to comment on the other issues on which Deputy Fitzmaurice and I put down amendments to give some semblance of justice and equality to our own home-grown Irish families. That is all I am looking for.

The question is: "That the acceptance of recommendation No. 1 be agreed to." In accordance with Standing Order 72, as the required number of tellers have not been appointed for the Níl side, I declare the recommendation carried.

Question put and declared carried.
Bill reported with recommendation and received for final consideration.
Question proposed: "That the Bill do now pass."

We have a housekeeping exercise. It is a note with which the Minister must deal.

I draw the Chair's attention to two corrections which I wish to request under Standing Order 163. The first correction is to the reference in the Regional Technical Colleges Act 1992 which inadvertently referred to the Act of 1991, which does not exist. I, therefore, request that the reference on page 60, line 12 be changed to read "the Regional Technical Colleges Act 1992." The second correction is the definition of units in section 62, which is on the cream list of amendments made in the House that is before this House today. The definition refers to section 88(1)(a) of the Act of 1997. This is the incorrect reference and I want to remove the reference to the Act of 1997 as the definition should refer to the Stamp Duty Consolidation Act 1999.

The corrections will be made to the Bill.

This has been a very long process, as the passing of the Finance Bill should be. I thank all of the officials who have been involved in supporting me getting to this point. I also acknowledge Deputies Michael McGrath, Pearse Doherty, Michael Fitzmaurice, Joan Burton and Mattie McGrath because an enormous amount of work has gone into scrutinising this Bill. I acknowledge this and acknowledge that on Committee Stage, this process went on across three days and then on Report Stage. I acknowledge the way in which colleagues have approached this. Even if we have disagreed, as we have on many occasions, I acknowledge the effort that went into dealing with this legislation.

I also acknowledge Department officials, the Leas-Cheann Comhairle, the previous Chair earlier and the Minister.

If the Deputy's praise of all of us is high, I will give him another 30 seconds.

Of course, I am. I am big enough to know that when I found out I was voting against something I should not be voting against, I did not push it to a vote. Thank God my colleagues were coming in because it is very important that they did. I acknowledge the magnanimity of the Minister.

Question put and agreed to.

A message will be sent to the Seanad acquainting it accordingly.