Paschal Donohoe (Dublin Central, Fine Gael)

I thank the Deputies for their questions.

If the information Deputy Farrell asked about is available on a regional basis or at a more granular level, we will share it with her and make it available to the committee.

On Deputy O'Callaghan's points, it would be difficult for us to anticipate the effect of a change like this on future levels of home ownership. We would have to make a huge amount of behavioural assumptions and I am not at all clear about how we could model the effects of a change in tax policy on ownership rates because there are many different ways in which the private sector could respond to this and ways in which those purchasing homes might decide to amend their behaviour. I understand why he believes it is needed. I am not at all certain it could be done in a way that would help.

He is right in saying that this is most likely to lead to an increase in the quantity of rental accommodation. That is a fair assumption. It is my expectation, as least in the early years of it being implemented, that the apartments most likely to be built will be for rent. However, the Deputy knows as well as I do that we have a dire need of rental premises and homes. If we want to make more homes available to rent so we can deal with the needs of tenants, we will need the private sector to build additional rental accommodation at scale. The State is trying to build cost rental but it cannot build them all on its own. The Deputy will be concerned about affordability and rents not being affordable. I understand that, but I have never come across a problem of affordability that has improved by building less of something. That is why I am confident this measure is merited and will make a difference.

The Deputy made the point earlier that the change in tax will have an effect on the value of land. It could, but I believe it will be moderate. The effects that are driving the valuation of land are far bigger than the effect of a change like this. It has to do with the quantity of land being supplied at the moment - land that people are choosing to make available and that is serviced - and the demand for that land. If this tax change is going to have an effect on the price of land, it will be a small effect in the context of the bigger, macro forces.

Deputy Doherty asked at what point we decided a change like this would be possible. It was in the context of preparing this budget and the deliberations I have had on this topic in recent months and my need to come up with a measure that was targeted. My view was that if we were to make a measure like this available to the entire construction sector, deadweight risks and uses regarding taxpayers' money would become significant for me. It was in the context of preparing this budget, the work I asked my officials to do and the questions I had about it, that we decided this was a measure that could be taken.