Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I will deal with each of the questions in turn.

To begin in the order in which Deputy Doherty addressed the issues he raised, I refer to the issue of commercial stamp duty, the latitude for it to be increased further and the role it might play in not only raising revenue but also, more importantly, shifting capital into the delivery of more homes. That is one of the reasons I have over recent years increased stamp duty on commercial property. Further evaluation and examination are required as to whether that policy could be used further in the future. I will say a couple of things about this. The rate has gone from 2% to 7.5%, a very large increase, over a few budgets. It has more than tripled at a time when we can see uncertainty surrounding the demand for commercial property in the future. How structural that uncertainty will be and how long it will last I do not know at this point, but the reason I decided not to introduce a further change to stamp duty on commercial property in this budget was that I felt there is enough change going on in that sector at the moment and I did not believe a further change would yield significant additional revenue. The fact that we had seen tax receipts in that tax head decline points to the fact that it is a tax rate that may have a bit less utility at the moment than it has had in the past. As I said, however, this will be looked at through the tax strategy group, TSG, next year.

I outlined a number of different reasons I believe there could be a difficulty with an additional surcharge for non-resident purchasers in Ireland. One reason was that I raised the point as to what could be the use of the home that might be bought for an Irish purchaser. It is not the strongest argument there is. I think there are other reasons that might point to the drawbacks of that measure. Again, that can be reviewed through the TSG and I will be able to consider it in future budgets. We can evaluate the impact it will have in the UK, and I hope information from that becomes clear enough soon.

As for the broader discussion about the role of institutional investors, specifically REITs and IREFs, and to go back to arguments that have been made and will continue to be made again, it is in this committee and in the Dáil that decisions are made that have very significant effects on our economy, on how homes are built, on the cost of those homes and on who is in a position to buy or rent them. Again, however, it is vital to put this discussion about institutional investors into the context of the other things the Government is doing to respond to the housing needs that we know are there, are really significant and are growing for many. I can put the human faces on those cases as well and on constituents I meet who are equally worried about whether they will be able to live in their local community or whether they will find themselves living in the spare room in a few years' time, worried that they might not be able to afford rent tomorrow or afford a home in the future. I meet similar constituents, experience the same feedback and see the same concern that many people have about this. That is why in our budget we have €4.1 billion allocated to make progress on housing.

Contrary to what Deputy Boyd Barrett said, we are not relying on institutional investors to solve our housing needs and the great housing difficulties we have at the moment. They are one of elements that can make a difference to the delivery of more apartments in particular, but they are also why, across next year, we are aiming to build 9,000 social homes and 4,100 affordable and cost-rental units. We want to see the private sector delivering 11,500 homes for private rental and private purchase. In addition to whatever work these investors and entities are doing in building or enabling the supply of more apartments is a Government that is actively involved in building more homes directly or enabling their building through cost-rental and affordable models of delivery, which I hope will deliver even more homes next year, and acknowledges that we need the private sector to build more homes for people who want to own their homes in their entirety without a role for the State. We also acknowledge that the private sector in particular has a role to play in the provision of apartments at scale, that is, to build lots of them. Particularly within Dublin and some of our other cities, we need more apartments to be built across the coming years to respond to the demand for those apartments.

This brings us back to the role of institutional investors. I contend that these funds play a role in apartments being built that would otherwise not be built. The apartments that are the subject of such criticism would not exist at all if we did not have investors like these channelling savings from other parts of the world into the purchase or co-funding of homes that allows them to be built. This is something that happens in many other countries and forms a part of how apartment development in cities takes place. While these apartments are the subject of such criticism, what would be the subject of even more criticism would be if apartments were not being built at all. In a city like Dublin and a number of our other larger cities, we need apartments being built in scale in a way that people will be able to afford. I know that is tough at the moment, but without apartments being built in numbers, we will not be able to respond to the rental needs that so many people have. Institutional investors play a role in the funding and delivery of apartments that, in their absence, would not be built.

I am looking at the alternatives that are being proposed here and the charge that is being made regarding our intentions. The role of these funds is being played beside a State and a Government that, in the first six months of 2021, delivered 2,433 new build social homes and 3,600 social homes in total. The Government has a further 8,750 social homes in the pipeline and another 9,000 at design or tender stage. This is the overall record of what the Government is doing - building homes directly at scale for social and public use, as well as for affordable and cost-rental. Our ambition is to deliver 4,100 of those next year. At the same time, apartments are being built by these organisations that are the subject of such criticism. In the absence of their role, the apartments that they are building would not be built.

Turning to the alternatives, I have looked at what Sinn Féin is proposing as well as its draft budget. Sinn Féin says that it would build 20,000 social homes next year at a cost of €3 billion. That is an average cost per home of €150,000. The question that Sinn Féin will need to answer, just as I answer questions on our housing policy, is how on earth does it believe it can build a home for €150,000. In its alternative budget, it is putting less money into housing next year than the Government is yet it is promising to deliver more homes. The only way it can make that work is at a cost per home that is a fraction of the cost of building homes.

Last night, Sinn Féin voted against a measure that was concerned with trying to increase the supply of rental accommodation. It was the tax code measure, which I have extended, to allow unused rental properties to be renovated by landlords, with some of the costs being defrayed by the tax code. Over the past two years, this measure has been responsible for 3,335 properties coming back onto the rental market. Sinn Féin is planning to build homes at a cost of €150,000, yet it votes against any measure we have that tries to increase the supply of rental accommodation. It is a party that makes much of its claim that it understands the rental crisis, but it opposes any measure that leads to new rental homes being built and, in its own policies, advocates the building of homes at a fraction of the actual cost of building them.

Regarding Deputy Boyd Barrett's points, his view is that he does not want these entities in Ireland at all. As always, he is at least clear in his policy. However, who does he want to build all of the accommodation - houses and apartments - that we will need? He appears to be against profit playing any role in the delivery of anything in our economy. It is a fact that those involved in building homes want to make a profit on their return. In many cases, that profit is reinvested in the delivery of more homes.