That Dáil Éireann:
— the housing crisis continues to spiral out of control;
— residential property prices have increased by 3 per cent in the 12 months to February;
— residential property prices have increased by 88.5 per cent since early 2013;
— high rents and residential property prices are making it increasingly difficult for workers, families and struggling home buyers to purchase and own their own home;
— institutional investors holding rental property avail of significant tax advantages and exemptions granted to them by the Government;
— these institutional investors include Real Estate Investment Trusts (REITs), introduced by the Fine Gael-led Government in the Finance Act 2013, and Irish Real Estate Funds (IREFs);
— REITs and IREFs pay no corporation tax on income from their property rental businesses;
— REITs and IREFs pay no capital gains tax accruing on the disposal of assets of their property rental businesses;
— institutional investors, including REITs and IREFs:
— enjoy tax advantages and exemptions that are distorting the housing market; and
— are displacing workers, families and struggling home buyers in the residential property market;
— institutional investors:
— have developed monopolistic and oligopolistic pricing power in local areas throughout the State, distorting rental and property markets to the detriment of workers, families and struggling home buyers; and
— are pricing average and low-income earners out of purchasing or renting from the private market;
— the displacement of workers, families and struggling first-time buyers, through the purchase of existing property in the residential market by institutional investors, has been taking place for several years;
— Government policies have facilitated, incentivised and encouraged the displacement of struggling home buyers by institutional investors in the residential property market;
— recent purchases of residential property by institutional investors in Mullen Park, Maynooth and Bay Meadows, Dublin, that have displaced workers, families and struggling home buyers, are a direct consequence of these policies; and
— investment by these institutional investors in the residential property market reached €1.2 billion in 2020, and is expected to grow in this and subsequent years without immediate policy intervention; and
calls on the Government to:
— introduce legislation to end the tax advantages and exemptions granted by the Government to institutional investors, including REITs and IREFs, in the residential property market;
— introduce legislation to impose a stamp duty surcharge on the purchase of residential property by institutional investors including REITs and Irish Real Estate Funds;
— direct the Minister for Housing, Local Government and Heritage to bring forward, as a matter of urgency, measures to restrict the activity of institutional investors in the residential property market and their displacement of workers, families and struggling home buyers from the market; and
— further direct the Minister for Housing, Local Government and Heritage to consider, as a matter of urgency, amendments to the Planning and Development Act 2000, introducing tenure type and mix as a matter of consideration in all future planning applications and approvals.
Táim ag roinnt mo chuid ama. Molaim an rún seo ar son Theachtaí Dála Shinn Féin. Le rófhada anois, an polasaí a bhí ag an Rialtas seo agus an Rialtas roimhe ná cead agus spreagadh a thabhairt do chistí idirnáisiúnta theacht isteach anseo agus gnáthdhaoine a ghlasáil amach as an margadh. Feidhm an rúin atá os ár gcomhair ná deireadh a chur leis an scannal seo anois agus go deo.
In May 2020, one of the State's leading wealth advisory firms circulated a paper to potential investors in the housing market in which it gave an honest and accurate account of Government policy and its impact on renters and homeownership. The paper stated:
The current high level of house prices and rents in Ireland’s residential property market have been driven in a significant way by the Government’s housing policy with favourable policies attracting institutional investors in the market
It went on to state:
The aim of institutions is to maximise their rental income from their properties and developers are also designing apartment blocks to maximise this income for institutions rather than aiming to meet the needs of society
The investment advisory firm concluded accurately when it stated, "The current housing policy has benefited both institutions and developers at the expense of individual buyers." That is the truth of this Government policy. Those are not words according to me or Sinn Féin but to the industry speaking to itself in 2020.
Last week, Round Hill Capital snapped up 135 homes in a new residential estate at Mullen Park in Maynooth, snatching homeownership from struggling homebuyers who had worked hard to save for deposits. The previous week, the same fund snapped up an entire estate of 112 homes in a new development in Dublin called Bay Meadows. For the public and whole generations locked out of homeownership by this Government and those which preceded it, this was simply the last straw. The Government is now scrambling to fix a problem it created in the first place. I have heard Ministers try to claim that this is something new and that it is an unintended consequence of Government policy. Let me say very clearly that this is nothing new. It has been going on for years. In 2019 alone, developers sold off 2,909 newly-built homes as private rental sales in Dublin.
This meant that 57%, six out of every ten, of newly built homes in Dublin were taken off the market and sold, in the majority of cases, to these investment funds. This was in 2019, not 2021. In the same year, more than 3,000 second-hand homes were bought by these funds. This is not by accident, it is by design. The Government has facilitated and encouraged this policy.
Many of these investment firms are REITs, which were introduced by means of legislation brought forward by the Fine Gael-Labour Government in 2013. REITs pay no corporation tax on rental profit. They pay no capital gains tax when they sell their properties and pay little in the way of stamp duty. Many of their shareholders pay less tax on the dividends they receive than the average Irish worker does on his or her wages. Some of them actually pay no tax at all. These investments were afforded tax advantages by the Government. Sinn Féin's motion calls for these tax advantages and exemptions to come to an end.
Far from this being a new request from Sinn Féin, we have been calling for it to happen for years. Only six months ago, I tabled amendments to the Finance Bill calling for the full rate of capital gains tax and a stamp duty surcharge to be applied to these funds only for them to be voted against by Fine Gael, Fianna Fáil and the Greens. Now that the Government has been caught out, it is scrambling to give some appearance of action and an indication that it really wanted to do something.
This motion calls on the Government to take immediate action to introduce legislation to end these tax advantages and exemptions which it and previous Governments have given these investment funds, including REITs and IREFs. It calls for the introduction of the imposition of a stamp duty surcharge on the purchase of homes by investment funds, including REITs and IREFs, as proposed by Sinn Féin in our budget submission last year. It urgently calls for the introduction of measures to restrict the activity of these funds and to end their price gouging, as well as the pushing out of struggling homeowners and buyers from the market.
Investment funds are locking workers and families out of home ownership. This is nothing new. It is not an accident because it has been happening for years. It is the direct result of the Government's policy. Sinn Féin has been calling it out for years. It is now time to bring it to an end. This motion should be supported and investment funds should be stopped from making housing unaffordable.