Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

In the last 12 months there have been no major changes to the fact that land is not being released. I say that because it is important to get to the core of this. This was the major argument in the Finance Bill last year. The Minister of State should look over the transcripts. We kept going back over this on Committee and Report Stages. We argued with the Government at the time that the five-year exemption from dividend withholding tax was a loophole that it was deliberately putting into the Finance Bill. I argued very strongly that people who bought properties not just last year, but four years from then, could have no dividend withholding tax from the capital gains tax, CGT, payable. This was a major issue.

Following up on that through a freedom of information request, I found that officials were communicating the fact that this could lead to hoarding before this measure was introduced to the Finance Bill and signed off. We were unaware that there were those concerns within the Department, but we were still making the argument that this would lead to an escape from huge amounts of tax and have an effect on the property market.

I put forward the idea in the first place for a dividend witholding tax and I have campaigned vigorously to end the five-year CGT exemption, which is an incentive that makes it more profitable for funds to hold onto vacant lands for a period of five years than to sell them off. The reason it is more profitable is that the Government argued black and blue with me, and with others in this committee, that that was the right thing to do.

It is not about circumstances, CGT, stamp duty and all the rest. The Government got this seriously wrong. There was a bit of arrogance last year on this issue. THe Government would not listen to members of the Opposition who were pointing out the problems there at that time. I welcome the fact the five-year CGT exemption or the dividend witholding tax exemption is going to be gone. However, there is a lesson here. We can talk about new politics and all the rest. It is not a case of saying that we were right and the Government was wrong; this has caused damage at this point. There are properties that could have been sold in bloc format, the way properties were sold by NAMA to investors, that have not been sold. This is because it was more beneficial for them to hold on and avail of the five-year CGT exemption. Those properties are in this city. This is something the Government was aware of during that time, but it continued to march on with this ill-conceived idea.

We are closing a loophole, but I am not sure who applied the pressure. I am sure certain people lobbied. I would like the Minister of State to put on record whether there was any lobbying of the Department of Finance on introducing the five-year CGT exemption on dividend withholding tax, or the dividend witholding tax exemption. If there was lobbying at the time, can the Minister of State inform this committee who was lobbying the Department or the Minister?