Dáil Éireann debate -
Tuesday, 1 Oct 2024

I move:

(1) THAT for the purposes of stamp duty charged by virtue of the Stamp Duties Consolidation Act 1999 (No. 31 of 1999), that Act be amended—

(a) in section 83DB(1), in the definition of “relevant instrument”, by the deletion of “, where the instrument was chargeable, in respect of the whole or part of the consideration under the instrument, to stamp duty at a rate of 10 per cent”, and

(b) in Schedule 1 –

(i) in the Heading “CONVEYANCE or TRANSFER on sale of any property other than stocks or marketable securities or a policy of insurance or a policy of life insurance”, by the substitution of the following paragraph for paragraph (1):

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and

(ii) in the heading ‘LEASE’, by the substitution of the following clause for clause (i) of paragraph (3)(a):

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(2) THAT—

(a) subject to subparagraph (b), this Resolution shall have effect as respects instruments executed on or after 2 October 2024,

(b) paragraph (1) shall not have effect as respects any instrument executed before 1 January 2025, where—

(i) the effect of the application of subparagraph (b) of paragraph (1) would be to increase the duty otherwise chargeable on the instrument, and

(ii) the instrument contains a statement, in such form as the Revenue Commissioners may specify, certifying that the instrument was executed solely in pursuance of a binding contract entered into before 2 October 2024,

and

(c) the furnishing of an incorrect certificate for the purposes of subparagraph (b)(ii) shall be deemed to constitute the delivery of an incorrect statement for the purposes of section 1078 of the Taxes Consolidation Act 1997.

(3) IT is hereby declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act 1927 (No. 7 of 1927).

Financial Resolution No. 4 provides for stamp duty increases on both the bulk acquisition of houses and on residential properties where the value or acquisition price involved, whichever is the higher, exceeds €1.5 million, with effect from midnight tonight.

Section 31E of the Stamp Duties Consolidation Act 1999 currently provides for a higher 10% rate of stamp duty on certain acquisitions of residential property. This rate applies where a person acquires ten or more residential properties, excluding apartments, in any 12-month period. The introduction of a higher 10% rate of stamp duty in 2021 was one of a number of measures taken by this Government to disincentivise the bulk purchasing of housing by institutional investors and companies. With a view to further discouraging bulk acquisition of houses, this amendment proposes to increase the rate from 10% to 15%.

Separately, this financial resolution will also apply a rate of 6% on residential properties where the value or acquisition price involved, whichever is the higher, exceeds €1.5 million. Stamp duty on residential property is currently set at 1% on properties valued up to €1 million and 2% on any value above €1 million. The existing two rates of 1% on values up to €1 million and 2% on the values of more than €1 million continue to apply, with a new third rate of 6% coming into effect only when the value exceeds €1.5 million. It is charged only on the element of the value above that figure. The new 6% rates on values exceeding €1.5 million is intended to apply for a residential unit acquired. Clarification on the aggregation and disaggregation rules will be provided in the Finance Bill 2024 to ensure it applies on this basis.

This is utterly useless. It is useless, fruitless and toothless. Four out of every ten houses now are being bought by conglomerates from abroad. Did you ever see the beat of it? We are in a housing crisis and the Government will not wake up to the fact it is a housing crisis. We have different schemes to get houses built, we are talking about output and whatever else, and yet we are selling off 40% of them to foreign entities. We had a kite-flying exercise by the Minister of State, Deputy Richmond, some weeks ago when he suggested the stamp duty would be raised to 20%. Now it is 15%. It should be 100% for these people unless they live in Ireland, have lived here for five years, and unless they can prove they are here for a valid reason, have a business here or are working here.

Canada and Australia have done it, but here in Ireland, in a housing crisis, we cannot do it. We say "come on" to all of these big foreign conglomerates and ask them to buy up our land too, where they are buying Coillte land and public land. Ireland is for sale with this Government; that is what it is. The men and women of 1916, 1921 and 1923 would be ashamed and be turning in their graves with what this Government is doing. It is selling out our country. The Government is inviting these companies in here. How are a young couple or a single person to get on to the property ladder when there is this naked basic sale of our assets, our properties and our houses? The Government then talks about housing and what it is going to do. The stamp duty should be set at least at a minimum of 50%.

It is certainly positive to see an increase in the level of stamp duty on the bulk purchase of homes, which I concede, but this simply does not go far enough. The Government resolution simply does not do enough to dissuade the bulk purchase of homes by institutional investors. We in the Labour Party had put down an amendment to increase the stamp duty rate to 20% on the bulk purchase of homes and, crucially, to remove the specific exclusion of apartment blocks. That is something that absolutely should be done and we are very disappointed our amendment has been ruled out of order. We had hoped it would be put because it would have given the Minister's Fine Gael colleagues, in particular, a chance to say whether they really wanted the rate set at 20%. Indeed, the Fine Gael Minister of State, Deputy Neale Richmond, specifically said back in September that he wanted to see a stamp duty rate of 20%. He said that Fine Gael would include that in its manifesto and he told The Sunday Times that the rate should be doubled to 20%. He said, rightly, that clearly there is an unacceptable level of bulk purchasing happening and this is to the detriment of people wishing to purchase their own home.

Just yesterday, I stood in Mullen Park estate in Maynooth, which made news headlines three years ago when a large conglomerate, Ranhill Capital Sdn Bhd, attempted to bulk buy 115 homes in that estate. It was only then, in response to that deal, which eventually fell through, that the Government pushed through new rules in the form of hiked stamp duty to limit property funds from bulk purchasing homes. More needs to be done. I stood with Labour Party Councillor Angela Feeney in the estate, where now, happily, properties have been bought by individual buyers, but it is a real example of what can go wrong when bulk purchasing is facilitated and when a punitive rate is not applied to it. It shows the need to go further than the Government has done.

The tax strategy group papers show that the current rate of 10% applied to 623 homes in 2023, 438 in 2022 and 188 in 2021. That is more than 1,200 homes lost to owner-occupiers and we have no idea-----

I had tabled two amendments to this resolution to increase the stamp duty to 100% and I understand they have been ruled out of order. This increase of 5% being put forward by the Government is pathetic. It shows it is clearly not serious whatsoever about stamping out the practice of multibillion euro funds coming in and snapping up homes, pushing up prices, and pushing out first-time buyers. We saw this happening earlier this year in Belcamp Manor in my constituency where 85% of the newly built homes were snapped up by a fund. Remember this tax and stamp duty applies to funds that buy up homes that are already built, that already exist and which could be made available to and be bought by first-time buyers. It pushes up house prices and makes housing even less affordable. It is a tokenistic 5% increase and is another example that shows this Government is all about the optics but is unwilling to take measures that actually work.

Since this stamp duty was introduced, the measly 10%, the number of homes it applies to and the number of transactions has increased year after year. Last year, there was a 58% increase in the number of homes where this stamp duty on bulk purchases was paid. It is an ineffective measure. Another 5% is not going to cut it. It needs to be an effective rate of 100% as proposed by the Social Democrats. These half measures are not going to work. It is clearly the case these investment funds are more than happy to pay out these kinds of stamp duties because they are making such gains by charging extortionate rents. It is no wonder home ownership is now at its lowest level in 50 years. In particular, it is very disappointing these higher stamp duty rates for bulk purchase do not apply to apartments as well. It would have been expected that the Green Party in government would have supported compact living, higher densities of apartment living and homeownership in apartments, but clearly it does not as this measure only applies to houses and duplexes.

To my mind if we are going to put any kind of stamp duty to try to deter these profit-driven investment funds from bulk buying properties, it should be 100%. Otherwise we are wasting our time. That is what it should be because there is nothing good about these investment funds bulk buying homes. It is disgraceful that apartments are not included. Most of what is being built at the moment is apartments and these funds are buying them up en masse and then charging extortionate rents and passing on the cost. Whatever the constantly inflating cost is, this is passed on into extortionate rents to people who rent those properties, those who can afford them. We need to get these wealth asset management companies, as they like to refer to themselves, who manage the assets of the super-rich and who try to profiteer off the back of our housing crisis, out of the Irish market and out of the Irish housing sector. They serve absolutely no useful purpose whatsoever. It very much highlights the difference in approach between some of us and this Government, which thinks it has to court these investment funds to have a property sector.

Surely we should have realised the folly of that after the last crash and then the stupidity of giving them all the NAMA assets at knockdown prices, and what that has done to create the housing crisis we now face. We need them out of the Irish housing sector, so this is not nearly enough. We need to go a lot further.

Consider the many debates we have had in this Chamber about vulture funds swooping in and buying up homes, in some cases buying up housing estates and in some cases apartment blocks. We have had debates like this and the Ministers across the Chamber shrugged their shoulders, saying, "What can we do?". Today the Minister has an opportunity to do something and again this week the Government simply increased the stamp duty from 10% to 15%. What planet is the Minister living on? These vulture funds are coming in and buying up homes that people need for their families. After buying up those homes, they are then charging extortionate rents. Like others, we want a 100% tax. This should have been done to end the scandalous practice of these vulture funds coming in and buying up homes that should be available for people who need them. The next time we have a debate in this House on the issue, and no doubt we will have more and certainly during the election campaign we will have a debate, the Minister and his party, and Fianna Fáil and Fine Gael, will have to account for the fact that they have failed to take on the vulture funds and they have failed to protect people who want to own their own homes. They have failed on housing anyway in terms of all the targets they set and they have failed to deliver affordable homes. One of the key problems is vulture funds swooping in and buying those homes from under the feet of families who want to purchase their homes. The Government had an opportunity to do something substantial today and as usual this week the Government has failed.

Again it is another failure. Bulk buying like this creates, in effect, a cartel. They are coming into an area, bulk buying the houses and creating a cartel, and then they dictate the prices for the area. They are doing it all in prime locations. If a company in the State is building a housing estate, it must have 30% for social housing. When we look at the scenario where houses are being bought up, however, there has only been an increase in stamp duty from 10% to 15%. The only way we can stop this is to hit them and hit them deep so that first-time buyers get the first opportunity to get those houses in those areas. Otherwise, we are pushing people into other areas that are not prime locations, which could be closed for business or closed for transport. We are actually creating a cartel if we do not send a clear message to these funds. Large companies are coming to this country with investments and to build factories but they are actually buying land themselves to build houses for themselves in their own companies. The cartel crowd have already taken an awful lot of properties from people who were suffering and who could not pay different mortgages through whatever downturns we had, and now they are coming in and doing it to us a second time. This has to stop.

I thank the Leas-Cheann Comhairle for the opportunity. I am aware I only have a little time. Home ownership is one of the biggest issues in Kerry for young people who want to buy or build their own home. The building option is nearly impossible because of planning permission. Home ownership is unattainable because of the cost of houses. It is hard for a young fella or a young couple - a boy and a girl - to get the funds together to buy a house or compete with people coming from abroad who have vast sums of money or with people we do not even know. It is absolutely shocking for young people now to contemplate what they have to go through to own a house.

Local authorities, instructed by the Department of Housing, do not even allow people to buy their council house anymore. One cannot buy any local authority house that was built after 2015. That was a laudable thing that people aspired to doing when they got on their feet, whether it was a rural cottage in the country or one they built on their own land. They were allowed to buy it when they got the funds together or when they were standing on their feet and able to do it. That has been stopped now. People still want to own their own home but they are being disallowed from doing that. We need to have a further debate to see how this can be managed. It cannot just be stamp duty alone. Other avenues are open to the Government to ensure that people who want to own a home can purchase it.

It is grand to see 250 or 270 houses being built in Killarney at the present time, but no young fella can buy one of those houses. They are bought up by voluntary housing bodies and that is grand because someone will benefit from that. There are other people who just want to do the basic thing to own a home, develop it and keep it for life. That is all they want. We are not seeing after those people at all, even in this budget.

The Minister, Deputy Eamon Ryan, and the Government have failed to grasp the enormity of this problem. What the Government is doing is actually only tokenism in trying to stop it. If the Minister had the same interest in attacking this problem as he did in attacking the good people who were out cutting turf, if he had less interest in people planting seeds on south-facing window sills and hoping they would get their dinner from it, if he had less interest in trying to make us all walk from our villages into a centre of population to borrow a motor car that 20 or 30 of us would own in co-ownership, if he had left some of those ideas after him and tackled this problem, he would be remembered more fondly for work and for sensible things instead of some of the fairy ideas that he had. I want to let the Minister know that his recent attack on the roads budget, and the fact that he tried to stop many road schemes throughout the country, will be remembered for a long time. In spite of the Minister, we got a lot of them back on. I am glad that we did but it really was a shameful act to go after people in their motor cars. These are honest-to-God people who pay tax, VAT, VRT and high excise duty on their fuel. They want to get into their car in the morning and go to work. They want better roads for safety for themselves and their families, and the answer of the Green Party and the Minister was to stop, block and obstruct roads that were ready to go to tender. These were bypasses and relief roads. The Minister has done everything he can to stop it and we will remember it for a long time. As long as I am here, I will never let it be forgotten.

I thank the Deputies for their contributions. We share a common interest in changing the market here and this is why we are raising the stamp duty. There were already significant reductions in the instances of bulk buying of apartments on the market and this will further reduce that. Any ones that are going are probably an example of legacy developments. This motion will, I believe, have the support of this House because it looks to put the power back in the hands of small-time or individual buyers. I ask the House to support it for that reason.

I thank the Deputies for their contributions. We share a common interest in changing the market here and this is why we are raising the stamp duty. There were already significant reductions in the instances of bulk buying of apartments on the market and this will further reduce that. Any ones that are going are probably an example of legacy developments. This motion will, I believe, have the support of this House because it looks to put the power back in the hands of small-time or individual buyers. I ask the House to support it for that reason.