Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

There are two amendments we are dealing with here and they are very important.

First of all, I will make a couple of brief points. The Minister did not inform the committee whether he will travel to London for the roadshow to the investors and whether he has a different opinion than the Minister for Housing, Local Government and Heritage, Deputy O'Brien, on that.

Has the Minister reconsidered meeting with the families of those whose homes are literally crumbling? The Government has not made a decision. They want to meet the Minister. They have appealed for the Minister to meet them online or in person.

There is no comparison between the North and the South in relation to house prices. Consider anybody who is watching this debate, if he or she is living in this city. The highest house price in the North is in Lisburn. It is £180,000. The average house price is approximately £150,000. For Deputy Donohoe, as Minister for Finance, to try to compare house prices which are out of control here with those in the North is bizarre. I am sure, as Minister, Deputy Donohoe would also know the limitations a finance minister, regardless of which party he or she is from in the Executive, has. They do not have the power to increase taxation on funds. Neither do they have the power to decrease taxation on funds. Maybe Deputy Donohoe is not aware of that but a call to the Department in the North or a call to the Minister of Finance, Mr. Conor Murphy MLA, would clarify that for him.

The Minister referred to the overall number of homes held by institutional investors. I do not dispute his figures, but we can use figures to make any argument we want and present them in a way that suits our agendas. I will give the Minister a different figure. In 2019, 57% of all new homes purchased in Dublin were private rental sales, that is, build-to-rents. These were institutional investors. There is a higher concentration in respect of apartments. This is a matter of affordability as well as availability. These apartments are costing prices that are way beyond what ordinary people are able to afford.

The other point that the Minister continues to gloss over relates to a question that has been raised by us and Deputy Boyd Barrett, that is, the role of these funds. It is an easy and simplistic presentation from the Minister to suggest that these funds are financing the development of homes. Were that the case, would it not be welcome? However, the vast majority of private rental sale agreements between funds and developers were forward purchase, not forward funding. I am sure the Minister knows the difference between forward purchase and forward funding. Forwarding funding is where the funds enter into a relationship or agreement with the developer to develop and fund a certain development and they own it or have a share in it at the end of the process. Forward purchase is where the developer secures its own finance from banks or internationally with an agreement that the fund will purchase those apartments or homes at an agreed market price at the end. That is what is happening in Ireland. One could argue that, by having this agreement, the homes will eventually be sold and it makes providing finance easier for the banks, but we must be clear - funds are not funding the developments. They are only agreeing to purchase them. In a time when there is a limited amount of supply, there is a market for these homes. It is important that the Minister for Finance makes it clear that funds are not funding these developments and are only agreeing to purchase them at the end.

This has to do with fairness. We have companies, for example, Cairn and Glenbeigh. If they dispose of assets, they have to pay capital gains tax because they are not IREFs. An IREF does not pay any capital gains tax. IREFs had €7.2 billion of transactions in 2019 and €3 billion last year, and 2021 will probably be a bumper year, given some of the transactions that went through in quarters 1 and 2, but they are not paying any capital gains tax on them. They are taking in the highest rents in the State, yet they do not pay any tax on their rental income. This is definitely ideological. The Minister believes that IREFs play a vital role, but I would argue that they do not. Even if they are playing a role, surely they should pay a fair amount of tax. These structures are about tax efficiencies and paying as little tax as possible for rental and commercial properties and should not be tolerated by the Minister for Finance or this committee.