Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I appreciate that and I am aware of the Minister's response last night. I will pick up on some of his comments and his presentation on the tax paid in relation to these funds. The two Sinn Féin amendments deal with the need for a report on the taxation of these funds. The second amendment, No. 36, also relates to their exemption from capital gains tax. Yesterday, the Minister spoke about a difference of opinion between Sinn Féin and Fine Gael and the Government on this, and there is no doubt that there is a difference of opinion. I would definitely not be jetting off to London to tell investors at a roadshow to continue to invest in apartments here that are beyond the reach of ordinary people. I would have a different set of priorities. Maybe the Minister will clarify whether he will attend this roadshow given that his colleague, the Minister for Housing, Local Government and Heritage, has said he is not going. If not, maybe the Minister will find time to meet the families affected by mica, which was the subject of another amendment we discussed yesterday. The Minister still refuses to meet these families, despite what we believe to be the Department of Finance's opposition to a 100% redress scheme.

On some of the statistics the Minister placed on record yesterday, he indicated these funds paid 17.9% tax in relation to taxable events in the previous year. That is the crucial point. If the Government legislates to provide that certain things are not taxable events, it means no tax is paid on such events. For instance, in the case of the disposal of a multimillion euro apartment block, a company or individual would have to pay capital gains tax at 33% and, therefore, the disposal would be a taxable event. However, the Minister for Finance has decided that is not a taxable event and so they do not have to pay tax in relation to that.

In relation to funds, we also know that a taxable event does not include circumstances in which there is a rent roll in one year of in excess of €100 million. That is also not a taxable event. For a small company or a landlord with one, two or three properties, that would be a taxable event but for these funds it is not and, therefore, they do not pay any tax on that income. The only time they pay tax is when dividends are paid to shareholders. The Minister and members will be well aware that I and my party argued strongly for the need to introduce a dividend withholding tax to ensure these funds paid at least some tax. Thankfully, that has been legislated for in previous Finance Bills.

However, the reality is that because of double taxation agreements those tax amounts can be written down. We can see, even with the dividend withholding tax at 20%, that is not what the funds are paying on the disbursement of proceeds. This goes to the core of this amendment. It is the fact these funds are able to sell off billions of euro of Irish assets like properties and not pay CGT.

I will give the Minister an example. In 2019 there was €7 billion worth of property transactions in this State, mainly by these funds. Despite the fact Covid-19 impacted on sales in 2020 there was more than €3 billion worth of these type of transactions. We can see it is the large funds which are involved in many of these. I will give an example. Kennedy Wilson sold Baggot Plaza for $165 million. It avoided paying CGT of €26 million as a result of what is in these Finance Bills. Any other type of company or individual would have to pay the €26 million. What of Kennedy Wilson? The Minister would say we will capture that tax when it pays dividends to its shareholders. However, there is a game companies are at now. Kennedy Wilson said the proceeds of the deal "... will be recycled into new opportunities, including European acquisitions and developments as part of Kennedy Wilson’s investment management platforms". Therefore dividends are not going to be paid out and there will be no taxable event. What will happen is the asset pool of Kennedy Wilson will continue to increase with no tax being paid. That is what has been facilitated here by this Minister for Finance over the last number of years. Ireland is being sold off bit by bit, tax-free, under our noses. It is worse than that.

It is not just that we are not getting taxes. We know that because of the tax structure of these funds, they have the firepower to outbid other buyers on the market, be they an individual who wants to purchase a house in Dublin, Cork, Galway or elsewhere, or a housing agency. One such agency came out publicly over the summer to talk about these funds being able to outbid it to the tune of, I think, €50,000 or €60,000 per unit price. This is due simply to the taxation arrangements the Minister for Finance has facilitated time and again. He has done so to the point where last year, when we were considering the Finance Bill, I argued for a surcharge on these funds in relation to buying up domestic property and the Minister flatly refused to introduce that. This happened not just last year but in previous years, until he was embarrassed by the public and had to, overnight, rush through legislation that gave an appearance he was doing something but which in reality did not go far enough. The question is: does the Minister accept that under the finance code he stands over funds are able to dispose of multi-million euro property portfolios without paying CGT and are able to reinvest those gains into their companies through new acquisitions, thus being completely tax-free?