I propose to take Questions Nos. 57 and 58 together.
Finance Act 2013 introduced the regime for the operation of Real Estate Investment Trusts (REITs) in Ireland. The function of the REIT framework is not to provide an overall tax exemption but rather to facilitate collective investment in rental property by removing a double layer of taxation which would otherwise apply on property investment via a corporate vehicle.
Property rental income and gains arising are exempt from tax within the REIT and are taxed at the investor level when distributed. The legislation requires that 85% of all property income profits be distributed annually to shareholders. The REIT is subject to corporation tax on income and gains not arising from the property rental business of the REIT.
I am advised by Revenue that due to the obligation to maintain taxpayer confidentiality it does not disclose information in circumstances where the number of cases is so small that it might facilitate identification of the taxpayers involved. As this is the case with Real Estate Investment Trusts (REITs), it is not possible for Revenue to provide the data requested. However I would note that REITs are required to be publicly listed companies and as a result they publish a wide range of detailed information including financial reports and details of their property portfolios.
I am aware of concerns expressed in relation to purchases of residential properties by large-scale investors and the potential consequences for first-time buyers. However it is also acknowledged that insufficient supply is a primary driver of price pressures in the housing market and it is my understanding that REITs are engaged in the development of projects for long-term rental, thereby contributing to the overall supply of property. I therefore do not currently have plans to change the REIT tax structure. However the Deputy will be aware that I committed that my officials would undertake a review of the impact of REITs and Irish Real Estate Funds (IREFs) on the residential property market, with a report to be presented to the Tax Strategy Group this summer, and work is ongoing in this regard.