Minister defends apartment decision ahead of Dáil vote

The Minister for Finance has defended the decision to exempt apartments from a 10% stamp duty levy which is included in proposed Government housing measures before the Dáil tonight.

The higher stamp duty charge will apply where someone acquires ten or more units on a cumulative basis over a 12-month period.

However, it will not apply to those bulk-buying apartments, which is the focus for many in the Opposition already.

Paschal Donohoe said that without the exemption “there is a significant risk that developers would exit from the apartment building market, that projects would no longer be viable, and an important element of our future housing strategy would be lost”.

The Minister is presenting the legislation on the housing market to the house, ahead of a vote.

He said the Department of Finance has conducted research which indicates that the risk for housing estates is “much less significant”.

Minister Donohoe said that the new stamp duty rate, when combined with the Minister for Housing’s complimentary measures, should “ensure greater availablity of housing”.

Sinn Féin finance spokesperson Pearse Doherty tabled an amendment which he said would ensure that the stamp duty would apply to apartments.

Deputy Doherty said that it was “some trick” on the part of Mr Donohoe that after the measures were announced, the share value of the investment funds went up.

He said the Government legislation is the “bare minimum”, but that the public would not “fall for it”.

“This isn’t real,” Mr Doherty said, adding that if the Government was serious the rates should be set much higher.

The stamp duty measure has so many loopholes, “you could drive a horse and cart through it”, he added.

Labour’s finance spokesperson Ged Nash said the “evidence from the markets is telling”, noting one investment fund has seen its shares rise by 2% in the past 24 hours.

Mr Nash said the rate of stamp duty should have been set at “15% or 17%”, and called on the minister to publish the rationale for deciding upon 10%.

He opposes the exemption of apartments, saying “an apartment is a home”.

Earlier the Government was accused of “waving the white flag” to investment funds by the leader of Sinn Féin.

Speaking during Leaders’ Questions in the Dáil, Mary Lou McDonald said the measures would not reduce rents or house prices.

Taoiseach Micheál Martin accused Sinn Féin of exploiting the housing crisis for its own political gain and said the proposals would give the advantage back to first-time buyers.

Mr Martin said Sinn Féin was weak on policy and its figures were not grounded in reality.

“You’re about exploiting the crisis,” he said.

Have new housing proposals made buying any easier?

Green Party spokesperson on Housing Francis Noel Duffy has said he will be tabling a motion to amend the Affordable Housing Bill to allow for 30% owner occupiers in apartment blocks.

Speaking on RTÉ’s Drivetime, Mr Duffy said the measure is “required” to allow people to buy into their communities.

He said he will understand later after speaking with the Housing Minister, whether the measure will have government approval.

Mr Duffy said the Green Party position remains that 20,000 public housing units need to be built per year, and that the majority of these should be cost rental units.

Earlier Ms McDonald also told the Dáil that a deal was being finalised that would see the largest ever private rental sector portfolio put to market.

Developed by the Marlet Property Group, she said that it would see 2,000 homes across six locations in Dublin sold to private investors.

Stamp duty measure ‘completely pathetic’

People Before Profit TD Richard Boyd-Barrett described the Government’s stamp duty increase on investment funds as “hopelessly inadequate and completely pathetic”.

He told the Dáil that the new 10% rate “will not act as a disincentive” to such funds to buying-up homes, and the measures will not apply to apartments “where most cuckoo are active anyway”.

Mr Boyd-Barrett said it was an “absolute scandal” that the State’s Strategic Investment Fund is backing investment funds which are building “box apartments” in Dún Laoghaire and elsewhere.

He said the manner in which cuckoo funds were operating in Ireland was a “scam and a swindle of mafia proportions”.

In reply, the Taoiseach said Mr Boyd-Barrett was “wrong” in his assessment, stating that the new stamp duty rates will act as a disincentive when it comes to block purchasing of homes and “gives the advantage back to first-time buyers”.

The Taoiseach argued that the “fundamental issue” is a question of supply, and he said that People Before Profit’s policies would reduce supply and worsen the problem.

Pointing out that the Government has allocated €3.3bn to housing this year, he said many developments would not have been built were it not for the presence of those investment funds.

Regarding the State’s Strategic Investment Fund, the Taoiseach said Mr Boyd-Barrett knew that the Government does not get involved in its acquisition policy.

Donohoe defends 10% stamp duty proposal on bulk buying

This morning Green Party leader Eamon Ryan said the new housing measures are a start but said “they cannot be the only measures, we’re going to go a lot further”.

He said other measures to support ownership of apartments will be supported.

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Speaking on RTÉ’s Morning Ireland he said the role of the State, particularly in the use of public land and the Land Development Agency, to progress a whole swathe of new apartments for cost rental and affordable purchase will be key.

Minister of State at the Department of Finance Seán Fleming said investment funds are necessary to build apartment blocks.

Speaking on RTÉ’s Today with Claire Byrne, he said a housing estate does not have to be completed before developers are able to sell a portion of the homes, which allows them to have the cash flow to complete the remainder of the estate.

He said this is not the case in apartment blocks, which results in them being much more expensive to fully complete.

Mr Fleming said local authorities will decide the percentage of homes that should be kept for owner-occupiers up to a maximum of 50%.

He also said “a genuine error was made” last night when the Government allowed a Sinn Féin motion to pass calling for affordable housing to be delivered at a maximum price of €230,000 in Dublin and less outside the capital.

“A genuine error was made in the Dáil chamber last night. Minister Malcom Noonan was deputising for Minister Darragh O’Brien, and when it came to the calling the vote, he made an error and the vote wasn’t called.”

Additional reporting Paul Cunningham, Micheál Lehane and Tommy Meskill

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