Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I hear what the Minister is saying in terms of clarification. I will come back to the substance of the clarification that is in the legislation. The Minister said the relief is tapering off, which means that by 2021, the tax liability increases for landlords who do not dispose of their property. Every year they hold the property, the more capital gains tax they pay. This is a serious issue because these properties were bought at a point where the market was at its lowest. The market is now at its highest so the gains are quite substantial. If I bought a property in 2001, I will have made a gain, which is a normal thing to do, and my gain could be €200,000 at this stage. I am looking at the figures and saying "okay I didn't sell last year and I would have had to pay tax of €7,000; if I sell this year, my tax is €15,500; and if I sell next year, it's going to go up by another €8,000 so it will be €23,000". There is an incentive for me notwithstanding the fact that as the Minister's advisers have spoken about in terms of landlords cashing out at the peak of the market, there is a tax incentive for them to do that as well and the tax incentive is significant. I know what the Minister said and I agree with his point that where there is an expectation in tax law, that expectation has to be filled otherwise nobody could trust what politicians would do in the future. That is a principle that in the main, has been kept to. It was not kept to with regard to pandemic payments where people lost their jobs and required pandemic payments and the law stated that it would not be taxed. The Government went and retrospectively taxed those payments even though the expectation from a legal point of view was that they would not be taxed.

We have a housing crisis and we have a tax code that we know incentivises landlords to leave the system. The situation in which we find ourselves is perverse. Regardless of political opinions, we want landlords to stay. I know the charges the Minister made against me yesterday. We want a functioning rental market. We recognise that. We want security for tenants and an appropriately regulated rental market but when you have an incentive like that, people will not ignore it. There is a question as to how we deal with this very serious issue. Does the Minister have the numbers of residential properties that availed of this tax relief over the past four years? Does he have more recent data because the data we have show there were over 568 residential sales involving this in 2021? Does the Minister have any data for 2022 involving the relief? The Exchequer cost for those residential premises was €31 million so those 568 premises between them would have had to pay an extra €30 million if this relief was not tapering off. This will increase every year to the point where because of the formula that is used, and to the point that it is seven minus one, the chargeable gain will be quite significant the longer you hold the property for.