Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I want to take issue with the last point. After the seven years they are not into the normal CGT situation, as I understand. There is a formula relating to the gains that have accrued. Say they are €200,000. It is minus those gains divided by seven eighths. Therefore seven eighths would apply if it was 2022, which is one year after the seven years. It will be seven ninths for 2023, seven tenths for 2024 and so on. That is the part of the formula which creates the incentive for them to sell. If it were a case where, after seven years, all CGT just applied, then there would be no further incentive for them to sell but there is an incentive for them to sell. On the example where someone has made a gain of €200,000 by the year 2021, if they sold, their CGT would be €8,500. If they hold to this year and sell, they will have to pay CGT of €15,500. If they sell next year, it will be €21,500, and if they sell the year after, it will be €26,800. Every single year it goes up and this is a serious problem. I agree there is a broader scope of assets, but of the 847 sales in 2021, 568 were residential premises.

We have a problem with a piece of legislation. I agree with Deputy Durkan. It was brought in for a reason - I do not want to go back to that, I am just dealing with what is in now - but there was always going to be a problem after the seven years. We are in a situation where we have high property values, there is a housing crisis and homelessness, there are issues of landlords leaving the market, and we now have a provision in our tax code that captures hundreds if not thousands of properties and that provides an incentive to sell.

It is a serious problem that every single tax adviser is advising their clients that now is the time to sell. OFX said "with the present increase in property prices it may be no harm to check if this Capital Gains Tax relief may be available to you now to avoid any unnecessary tax". Hughes Tax & Advisory says it is the perfect time to sell your property. Mullins & Treacy:

This could impact your bottom line ... We acted for a lot of investors who bought property under this scheme. If this is you, then you need to sell by the end of this year.

Cooney Carey:

Did you purchase a property anytime between 7 December 2011 and 31 December 2014? If so, now may be a tax efficient time to consider selling.

It goes on and on. They are all advising these individuals to sell. Someone might be thinking they will not hold on to a property that was an investment. They see the level of property prices now and that interest rates should dampen the property market, which is not happening here but it should have an effect that is happening across Europe. They are looking at peak prices and thinking that if they hold for another year, they will have to pay an additional €6,000 or €7,000 tax and they will have to pay that every year beyond that too, so they might think that now is the time to get out. That is what all the advisers are telling them. We have to do something about this given the scale of the crisis we are in. Do have a solution at this stage? No, but there is a tax incentive for people who bought thousands of properties during those years to sell and that incentive is significant and only increases every year.