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Donohoe defends 10% stamp duty proposal on bulk buying

Minister for Finance Paschal Donohoe has defended the decision to
exempt apartments from the Government’s proposal to introduce a stamp
duty charge of 10% on the purchase of ten or more houses.

He said the reason it is a house-focused measure is because he is
“genuinely convinced” that if apartments were brought into the scheme,
it would mean less apartments being built.

“The first step in allowing rent to become more affordable in the
future, and allow for more apartments for people who want to live in
them, is for the apartments to be actually built,” he said.

The Dáil is set to vote today on the proposal under plans agreed by Cabinet last night.

The higher stamp duty charge will also 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.

Speaking on RTÉ’s Morning Ireland, Mr Donohoe said the private sector was needed in order to build to allow
people to buy and rent in affordable ways.

He said the measure will be kept under review to ensure it will
deliver the desired objectives, adding that there is “a really profound
problem” because there are currently not enough properties to rent.

There is concern within Government, with senior sources confirming to
RTÉ News that Green Party ministers are worried apartments will be
unaffordable for those who want to live in major urban areas.

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.

Speaking on the same programme 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.

Guidelines will be issued to local authorities today which will look to keep houses and duplexes in future developments out of the reach of those seeking to buy in bulk.

Mr Donohoe said the increase in stamp duty to 10% is a stronger, broader measure than the one that exists in the UK.

He said that the measure in the UK only applies to properties that are worth over £500,000, and that the UK measure also includes a number of other exemptions.

He said Ireland will have a lower rate but that it will apply to far more properties of all value, than equivalent measures in other jurisdictions.

Sinn Féin’s Finance spokesperson Pearse Doherty said Government measures to curb so-called cuckoo funds are not sufficient and instead have “set out a green light to investment funds” to say it is open season for “the majority of houses in Dublin city.”

He said the 10% stamp duty will not have the desired effect of deterring investment funds and it should have been set at at least 17%, while the profits of the funds should also have been tackled.

Mr Doherty accused the Government of giving a pretence that is acting on the problem, and said “Paschal Donohoe, his Government, doesn’t want to go here. It is only because of public pressure that they now have to give a semblance that they are doing something.”

He said capital investment needs to be doubled in order to build 20,000 homes over the next five years.

Article Source – Donohoe defends 10% stamp duty proposal on bulk buying – RTE – Micheál Lehane

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