SOLUTIONS TO THE issue of global investment funds buying up entire estates to be placed on the rental market can be found in the tax code, Sinn Féin housing spokesperson Eoin Ó Broin has said this afternoon.
Last Sunday, the Business Post reported that Round Hill Capital and its partner SFO Capital, have just inked a deal to buy 135 of 170 houses at the Mullen Park estate in Maynooth in Co Kildare.
The two companies, both headquartered in the UK, also bought 112 homes at the Bay Meadows estate in Hollystown, Dublin 15 last month.
All 250 homes are set to be rented out, raising concerns about the already constrained supply of homes for prospective buyers.
“It’s going to have a big impact on first-time buyers. I’ve been contacted by several people who are very upset. It’s a sign of things to come,” Social Democrats co-leader Catherine Murphy told the Business Post at the weekend.
Speaking outside Leinster House today, Ó Broin told reporters, “This isn’t a new phenomenon — it’s been happening for a number of years.”
“The solutions to this are really within the tax code. These investment firms don’t pay Capital Gains Tax, they don’t pay corporation tax and they don’t pay any tax on their rent roll.
“What they’re doing is they’re going in, buying at high prices, charging high rent and then using that to flip the properties after a short period of time and to not pay any Capital Gains Tax.”
Sinn Féin, he said, would “remove those tax exemptions. They would have to pay that tax on the rent roll. They would have to pay capital gains tax. We’d also increase their stamp duty.”
Overall, Ó Broin said, “Long term, low yield institutional investors coming in and building good quality apartments to rent at reasonable prices: that’s not a problem.
“Our problem at the minute is short term, high yield vulture funds have been incentivised by government policy — tax breaks that have been in place for a decade.”
Pressure
Government politicians have also raised concerns that the demand for homes from global investors is increasing pressure on domestic buyers.
On Sunday, Fianna Fáil MEP Billy Kelleher tweeted, “If something isn’t done to tip the balance in favour of homeownership and disadvantage investment funds, we will be tenants again, like we were a hundred years ago.
“The only difference is our landlords will be investment funds based in London or New York.”
This morning, his party colleague, Minister for Housing Darragh O’Brien said he does not approve of so-called ‘cuckoo funds’ buying up estates for rental purposes.
Speaking on RTÉ Radio 1′s Morning Ireland programme, O’Brien said, “Do investors have a role in housing in Ireland? Yes, of course they do… What I would say is that where funds are coming in and taking homes away effectively from families is a concern of mine.”
However, he said he was against “banning” investment funds altogether from the residential market, which he said would be “radical” and could have major ramifications for investment in general”.
Reporting by Christina Finn
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