It is important that we have this discussion in the context of overall Government housing policy, which is providing record levels of State investment for all forms of housing. However, Government expenditure alone cannot meet all the housing needs of our State. Modelling undertaken by my Department estimates that approximately €12 billion of development funding will be required annually to meet the targets set out in Housing for All, of which €10 billion will be required from private capital sources. That is what is at stake here: the role of private capital in leading to the supply of new homes. Much of the residential investment committed to by institutional investors is observed by the level of forward commit transactions, that is, the provision of capital to fund the construction of new dwellings, or the agreement to purchase contracts to de-risk a project sufficiently to enable the sourcing of low-cost financing. It is likely that such construction would not occur in the absence of this investment.
While it is important to facilitate collective investment through appropriate regimes, it is equally important to ensure that, where such investment brings a profit, a fair share of tax is paid. As the Deputy will be aware, and as is common for investment funds generally, tax occurs primarily at the level of the investor rather than within the fund. Additionally, in the cases of IREFs and REITs, withholding taxes apply on distributions to investors to ensure collection of tax revenues. In 2019, I made several significant amendments to both regimes to ensure appropriate levels of tax are paid by investors in Irish property. Due to the small number of market participants within the REIT regime, and to protect taxpayer confidentiality, Revenue cannot provide data with respect to the residential holdings of REITs. As REITs are publicly listed companies, however, information, such as annual reports, is publicly available. Regarding the proportion of new units, Coldwell Banker Richard Ellis, CBRE, estimated the level of forward commit investment by institutional investors in the past year totalled just over €2 billion.