GREEN PARTY LEADER Eamon Ryan TD has come under pressure following last night’s vote to allow funds to side-step 10% stamp duty if they lease back homes to the State for social housing.
The controversial government amendment was passed in the Dáil last night with Finance Minister Paschal Donohoe claiming that “in many cases homes would not be built” if the amendment was not passed.
Speaking in the Dáil this afternoon today, Sinn Féin’s Pearse Doherty called the vote “a political stroke” while Social Democrat’s co-leader Catherine Murphy TD said it was “an abuse of public money” to continue with the approach of leasing properties from the funds.
In May, the government introduced legislation requiring that 10% stamp duty be paid for bulk purchases of 10 or more properties.
It had come about as a result of the fallout from Round Hill Capital buying 135 homes at a new development in Maynooth, Co Kildare.
The revelation that investment funds could side-step the stamp duty cost by way of a government amendment has caused consternation among opposition politicians in recent days.
Speaking today, Murphy said that the funds already benefit from favourable tax treatment and sign “lucrative” deals with local authorities to lease out the properties, so do not need the “sweetener” of side-stepping the stamp duty rules.
“The cuckoo funds are not content with paying virtually no tax on their profits, they’re not content with the extraordinarily lucrative 25-year contracts and very secure investments, those investments have been described by some as government bonds on steroids, no the State has to further sweeten the deal and exempt them from this Stamp Duty increase if it wants them to play ball,” she said.
Murphy added that the Taoiseach had said a number of weeks ago that funds should not be incentivised to lease properties to the State so this amendment was “a screeching U-turn”.
Transport Minister Eamon Ryan said in response to Murphy that the leasing arrangement from funds “is not the approach we want to take” but it is a “short term emergency measure”.
“What we will see in the Housing for All strategy, which we will publish shortly, is a change in how we do leasing arrangements and a recognition that this is not the approach that we want to take,” he said.
Ryan said he “doesn’t disagree” on Murphy’s underlying point that the long-term leasing arrangements are not preferable.
“These are short-term emergency measures to address a particular problem, the key thing we need to get right now is the new Housing for All and a different approach to housing,” he said.
Murphy rejected that this can be termed a short-term strategy when the leases will be signed for 25 years.
“The local authority is going to pay the equivalent, if not more, in terms of a mortgage for 25 years, it will then refurbish the house and hand it back to the original owner. You couldn’t make this up, this is not short-term, this is an abuse of public money,” she said.
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