The Government has moved to clamp down on bulk-buying of new homes with an increased stamp duty of 10 per cent on certain multiple house purchases set to be approved by the Dáil today.
Under measures agreed by the Cabinet on Tuesday night, the higher stamp duty rate will apply to the purchasing of more than 10 houses within a 12-month period.
Apartments will be exempt from the higher rate, as will purchases by local authorities and approved housing bodies.
The new rate is set to come into effect from on Thursday after a vote in the Dáil which is expected today.
Furthermore, new planning guidelines will state that all houses and duplexes should be available for sale to individual non-commercial purchasers for at least two years after they are built. If a local authority is then satisfied that a market has not emerged, the houses will be open once again to funds and other buyers.
The circular, which was due to be issued to local authorities on Tuesday night, says developers of five units or more must enter into an agreement with the relevant local authority that will limit sales to individual buyers.
Meanwhile, Minister for Housing Darragh O'Brien said he plans to bring further legislation that will give local authorities the discretion to decide how much of a new development of houses and duplexes should be set aside for owner-occupiers or first-time buyers. This would range from zero to 50 per cent.
“What we are doing is giving the range to the local authorities to make that decision on a particular housing development. We have to be able to give them the discretion because they make the decisions on planning application,” Mr O’Brien said.
It is understood that some elements of the proposed reforms encountered significant resistance from Green members of Cabinet. Sources said that all three Green Ministers raised concerns about the exemption for bulk purchases of apartments.
Mr O’Brien insisted that the Government was “unified in its approach”.
Minister for Finance Paschal Donohoe said that apartment developments "face significant viability challenges and there are clear indications that any additional cost burden in apartment developments would have significant negative consequences for supply, and consequently impact on our future housing model, in particular for urban living".
Sinn Féin leader Mary Lou McDonald said stamp duty charged for multiple homes should be increased to at least 15 per cent because Britain had it set at that rate and then had to raise it again.
But Mr Donohoe said on Tuesday night he was given “strong advice from my officials and from the department that the 10 per cent rate is one that will provide a really significant disincentive to the purchases that we are looking to reduce in our housing market”.
Meanwhile, the Dáil on Tuesday night unexpectedly passed a Sinn Féin motion calling for affordable housing to be delivered at a maximum price of €230,000 in Dublin and less outside the capital and with rental costs at between €700 and €900 per month in the capital.
The motion passed after the Government appeared to forget to back its own countermotion against it. A formal vote was due to take place, but when the Ceann Comhairle called for assent or dissent, the Government side apparently did not respond.