Coalition accused of helping vulture funds to profiteer

Outrage at no stamp duty surcharge on bulk-buying if homes leased to local authorities

The Taoiseach said his Minister for Housing had introduced a ‘suite of measures’ to address the housing crisis. File photograph: The Irish Times

The Taoiseach said his Minister for Housing had introduced a ‘suite of measures’ to address the housing crisis. File photograph: The Irish Times

 

The Government has been accused of putting up “the white flag of surrender” and helping investment funds to profiteer.

The accusation came in the Dáil after it emerged such funds will not have to pay a stamp duty surcharge on bulk-house purchases if they lease them back to local authorities. An amendment is to be introduced this week to legislation on Covid-19 supports that will exempt investment funds from the 10 per cent stamp duty surcharge on houses if leased to councils.

In sharp Dáil exchanges Sinn Féin leader Mary Lou McDonald and Social Democrats joint leader Róisín Shortall attacked Taoiseach Micheál Martin about an amendment to be made to the Finance (Covid-19 and Miscellaneous Provisions) Bill to exempt funds from the higher stamp duty rate.

Both leaders said Mr Martin had last month in the Dáil expressed his opposition to local authorities leasing back houses from these funds. Ms McDonald said the Taoiseach said on May 5th that “this message should go out loud and clear from Government”.

Mr Martin said in the Dáil on Tuesday, however, that such leasing had “a limited use” in the housing crisis and had played a role in ending family homelessness. He insisted that he had also made that point when he spoke on the issue in May.

But he added that the use of lease-back arrangements did not represent the core platform of the Government’s forthcoming Housing for All strategy, which is focused on “building houses and owning houses”.

Ms Shortall said the that Minister for Finance Paschal Donohoe had stated when he introduced the stamp duty surcharge on buying 10 or more houses in a 12-month period that it would be a “strong deterrent” to bulk-buying by investment funds.

“But now we learn that what your Government is doing is actually quite different,” she said. “Instead of catching out cuckoo funds trying to evade this measure, you’re actually helping them to profiteer. Cuckoo funds that lease homes back to local authorities will be exempt from the stamp duty increase.”

The Government was renowned for saying one thing and doing something else, “but this turn can only be described as brazen and downright dishonest”, she said.

The Taoiseach said she was concentrating on one amendment which was distorting Government policy. He said leasing had a limited role in certain circumstances but their policy was “buying houses and owning houses”.

Ms McDonald said the Minister for Finance will introduce an amendment “that will . . . actually incentivise them to buy up these family homes, and to lease them back to councils”.

She said this action is “despicable”. And “it is clear that you have no intention of really putting manners on these big investment funds . . . it is lost on nobody that whereas you afford tax breaks for these investment funds you’re giving damn all to renters. In fact many would say if you’re a cuckoo, a vulture or even a seagull in the city of Dublin you’ve a better chance now than if you’re a young person, a worker or struggling family looking to put a roof over your head.”

Cuckoo funds snapping up family homes in bulk is “perhaps the most abhorrent aspect of our broken housing system” and a “triple whammy”.

She said “the funds get away scot free. The taxpayer pays over the odds for social housing that we don’t own and families and young people are priced out of the market.”

Taoiseach’s response

Mr Martin accused Ms McDonald of using housing for political purposes during an election to “generate anger and division” while he is interested in housing as a serious social problem.

He said her party had opposed housing schemes across Dublin including social and affordable homes and her “hypocrisy is incredible”.

He said Minister for Housing Darragh O’Brien had introduced a “suite of measures” to address the crisis.

People Before Profit TD Richard Boyd Barrett said the “shocking amendment by the Government at the last minute to exempt vulture funds” was to have a guillotine after just one hour of debate on Wednesday night and was designed to short-circuit discussion.

Independent TD Catherine Connolly said she fundamentally objected to the use of the guillotine, “which beggars belief”.

The Taoiseach responded that the Government wanted to bring legislation to a conclusion before the summer recess.