Stamp duty U-turn claims rejected by Taoiseach

The Government strongly defended a decision to reinstate a lower stamp duty rate for investment funds that bulk buy homes to lease to the State for social housing amid opposition claims of a U-turn.

Taoiseach Micheál Martin and Minister for Housing Darragh O’Brien insisted the move was necessary to ensure the delivery of up to 2,400 homes through leasing arrangements were not put at risk.

The amendment was passed by 74 votes to 59 with no abstentions. The Government had the support of just one Regional Independent TD while all opposition parties and other Independents rejected it.

Minister for Finance Paschal Donohoe said the amendment aimed “to ensure the supply of more social housing as quickly as possible” and was introduced because of a risk that the housing need thousands of families would not be met.

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He said there were “qualifying conditions” that the lease has to be agreed within two years of acquisition and must be for a period of at least 10 years.

He rejected opposition claims the Government was only interested in the market and insisted the reality it is the largest builder of State-approved and financed homes.

Sinn Fein finance spokesman Pearse Doherty said however it was “nothing but a political stroke” and a “brazen step” to “give investment firms a tax break when they snap up homes from under the noses of struggling homebuyers”, outbidding them and approved housing bodies by as much as €80,000.

Cuckoo funds

Sinn Féin leader, Mary Lou McDonald, accused Mr Martin of “hijacking” the Finance Bill with a “sneaky amendment” to incentivise cuckoo funds to “snap up” complete estates, a charge the Government denied.

Mr Martin argued that the delivery of up to 2,400 social housing units through leasing by funds to local authorities could be jeopardised if the lower stamp duty rate was not reinstated for such arrangements.

He said that “if we turn off the tap immediately”, families on the housing list could lose out.

He asked Ms McDonald “should they be left on the street or in unacceptable conditions?”

State ownership

Mr Martin also signalled the State would “transition to different models” including one where the State would end up owning leased properties.

The issue of bulk buying housing shot to the top of the political agenda in May when an entire housing estate in Maynooth, Co Kildare, was purchased by an investment fund. Stamp duty was increased from 1 per cent to 10 per cent on the purchase of 10 or more houses over 12 months.

Mr Martin said at the time that no local authority should be engaging in a long lease with institutional investors, although he acknowledged that “a limited degree of leasing has some importance”. The Opposition accused him of doing a U-turn on these remarks.

Mr O’Brien on Wednesday argued that the amendment did not amount to a U-turn, insisting it was a “a short-term measure” .