That Dáil Éireann:
— the housing crisis continues to worsen for renters and first-time buyers;
— residential property prices have increased on average by 14 per cent in the last year according to the most recently published Residential Property Price Index by the Central Statistics Office; and
— average rents nationally now stand at €1,524 per month, an average of 10.3 per cent higher than the same period in the year previous, with the average rent in Dublin now standing at €2,056, a rise of 8.9 per cent;
further notes that:
— the expanding involvement of institutional investors, which include Real Estate Investment Trusts (REITs) introduced by the Fine Gael-led Government in the Finance Act 2013, and Irish Real Estate Funds (IREFs) is having a detrimental effect on the Irish residential property market and the private rental sector;
— the tax advantages and exemptions gifted by the Government lock struggling home buyers and renters out of affordable accommodation from the new supply coming on the market and are a factor in the massive increase in rents being charged;
— REITs and IREFs pay no corporation tax on income from their property rental businesses nor capital gains tax accruing on the disposal of assets of their property rental businesses;
— institutional investors have developed monopolistic and oligopolistic pricing power in local areas throughout the State;
— this is distorting rental and property markets to the detriment of workers, families and struggling home buyers, and is pricing middle and low-income earners out of purchasing or renting from the private market;
— a recently published research report by BNP Paribas Real Estate states that 4,900 private rental sector properties were bulk purchased by investment funds in 2021 at 32 per cent above average asking prices; and
— investment by these institutional investors in the residential property market reached €2.27 billion in 2021, 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 IREFs;
— amend the Planning and Development Act 2000, to empower planning authorities to determine that the tenure mix of all new residential developments is based on local tenure need as determined by the Housing Need and Demand Assessment;
— repeal the "Build to Rent and Shared Accommodation Sectors" section of the "Sustainable Urban Housing: Design Standards for New Apartments – Guidelines for Planning Authorities" (2018); and
— provide additional capital funding to local authorities and Approved Housing Bodies to forward purchase such developments for the provision of social, affordable rental and affordable purchase homes, given some developments require forward purchase agreements to ensure their viability and delivery.
Workers and families are in the grip of a cost of living crisis. Low- and middle-income households needed actions that met the scale of those challenges. A Government that understood the challenge they face would respond to support them. However, we know this Government does not get it and has failed to meet that challenge. The package announced last week will see Ministers receiving the same financial support to light and heat their homes as workers on the minimum wage. That is crazy. This Government will spend more than €12 million on electricity credits to more than 62,000 holiday homes throughout the State while low- and middle-income households face price spikes in the cost of gas, electricity and home heating oil. This is a Government that is out of touch, out of ideas and out of time. A Sinn Féin Government would have provided targeted support to low- and middle-income households at speed and at scale. This Government has failed to respond to the challenge.
The failure is no more evident than in the area of housing. This Dáil and this Government should be constantly reminded that the housing and rental crisis did not fall from the sky. It did not happen by accident; it happened a direct consequence of the policies and decisions made by Fianna Fáil and Fine Gael elected representatives. Ministers, some of whom have been at the Cabinet table for more than a decade, often comment on the housing crisis as if they were some type of spectator but they are key players in the housing crisis, and you cannot spin reality. In the 12 months to November, house prices rose by 14%. We are close to reaching what I believe is and has been the objective of this Government for the past decade, that is, to push house prices back up to Celtic tiger peaks. It is to pump up the housing market, to maximise its proceeds for shareholders, developers and institutional investors. The problem the Government faces is that policy has now damaged the quality of life and life prospects of renters while locking workers and families out of home ownership. The average rent across the State now stands at €1,500 and in Dublin at more than €2,000. That is the legacy of this Government and the Minister for Finance, Deputy Donohoe. It is renters struggling in this city and right across this State. Saving for a deposit while paying extortionate rent is impossible while house prices seem so far beyond the reach of many. The October budget, like the measures announced last week, ignored and forgot the struggles of renters. We in Sinn Féin have called for rents to be reduced and then frozen. A Sinn Féin Government would introduce a refundable tax credit for renters to put one month's rent back into their pockets. A Sinn Féin Government would ban rent increases because rent increases because renters cannot afford another rent increase.
While the Government continues to ignore the struggle of renters and homebuyers, it rolls out the red carpet to institutional investors like vulture funds and cuckoo funds. It provides them with tax advantages that allow and encourage them to price homebuyers out of the market and push up rents.
They pay no corporation tax on their rental profits and no capital gains tax when they sell the property. They are the winners of Government policy, while renters and home buyers are certainly the losers.
In 2019, real estate funds enjoyed an operating profit of €1.2 billion and they did not pay a cent in corporation tax on those profits. I have not made a mistake; real estate funds in 2019 enjoyed an operating profit of €1.2 billion and they did not pay a cent of corporation tax on those profits. In the first half of last year, IRES REIT, which owns more than 3,800 properties throughout the State, made profits of €27 million. It did not pay a red cent in corporation tax on any of those profits, which were made on the back of renters paying sky-high rents.
Sinn Féin has warned this Government and this Minister for years that the sweetheart tax deals he granted these funds would undermine the efforts and interests of renters and buyers. That has come to pass. Now is the time for change. It is long overdue. This motion calls on the Government, once again, to end the tax advantage it deliberately gifted to investment funds in the housing market and instead fund and empower local authorities and homebuyers to purchase homes that can be bought or rented at affordable prices. That is what a Sinn Féin government would do and, even at this late stage, that is what Fianna Fáil and Fine Gael should do. They should roll up the red carpet and stop allowing these funds to pay no tax.