Fine Gael is pushing for a doubling of the tax on investment funds that purchase houses in bulk.
Speaking on RTÉ radio’s This Week programme on Sunday, Minister of State Neale Richmond said the higher rate had worked “to an extent” and had “slowed down” bulk purchases, but describing Fine Gael as the “party of home ownership”, he said there was now a case to double the rate to 20 per cent.
Mr Richmond said that even though the Government had voted down a Sinn Féin proposal to increase the rate at the start of the year, the proper time for budget proposals was in the autumn. He said institutional funds had some role to play but not to the extent they were currently doing, which he said saw 600 homes being purchased in bulk this year.
He said he would be raising the proposal in talks with Minister for Finance Jack Chambers this week but had not discussed it in detail with him yet, nor the Minister for Housing, Darragh O’Brien.
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Mr Richmond indicated that if it was not included in the budget he would push for it to be included in the Fine Gael election manifesto. He did not directly address questions put to him on RTÉ that he was trying to put pressure on Fianna Fáil, but said that he did not believe his suggestion would cause friction within the Coalition.
After a controversy arising from the bulk purchases of homes in a Kildare housing estate, the Government introduced the 10 per cent rate on purchases of 10 homes or more in May 2021. It applies to bulk purchases of houses rather than apartments and kicks in when ten or more houses are bought by a single purchaser in any 12 month period.
However, bulk purchases have continued in some instances with examples in north Dublin. In January, the then-Minister for Finance Michael McGrath argued that the higher rate had applied to under one per cent of residential transactions, indicating that activity at this level was not significant.
A Fianna Fáil source said that the party would not oppose such a move, but that there would likely be some resistance within the Department of Finance amid concerns over the impact on some companies balance sheets and capital flows into Ireland.
The source added that data suggested the practice had been effectively clamped down on, but that high profile examples such as Ryanair buying houses to accommodate crews meant controversy could flare up around the practice – although this was different from the original problem which the Government was seeking to control.
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