Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

I agree with Deputy Boyd Barrett on the rationale for facilitating this a number of years back. I am on record in this House and on a national broadcaster in expressing that view. This was a conscious decision to allow our country to be sold, particularly in the case of commercial real estate, and to be sold tax free. It is to do with NAMA, with the banks and with pushing up commercial property prices. Now, however, everybody including those responsible for the Government's own tax strategy papers is talking about overheating. The IMF and rating agencies are similarly talking about commercial property and we are all familiar with the statistics showing how far it has risen. It is because of the funds industry. An interesting comment was on the question of a sudden withdrawal and that may be behind the Government's intention. In such a scenario there could be a collapse in commercial property prices that would have consequences for NAMA and the banks because so much of this property is in the hands of these fund structures.

It is clear that this House will be taking far more interest in section 110 companies and the fund industry because in Finance Bill after Finance Bill these issues have crept in without proper scrutiny by ourselves or knowledge on the part of the Government. It adds to the argument for providing support for Deputies to deal with these issues. I acknowledge that the Department has been far more supportive this year than in previous years, particularly on this issue.

It is a pity that the core of amendment No. 47, which is about limiting individuals for personal portfolios, is wrapped up in the exemption of CGT if they hold the property for five years. This should not be the case but I welcome the fact that a developer cannot purchase these properties, put them in an ICAV and be exempt from capital gains tax. While the fund industry does not have tax within the fund, a policy decision has been taken by the Government to exempt these individuals from capital gains tax if they hold onto the assets for more than five years and that is completely and utterly wrong. I completely agree with Deputy Boyd Barrett that there is evidence that we should not be doing this. We should learn the lessons on commercial property and such people should be subject to capital gains tax. There is no reason whatsoever not to be and the fact that if they sell within five years they are subject to capital gains tax shows that this is a political decision by Government with no rationale underpinning it. Even at this late stage I appeal to Government, in light of all the evidence of what is happening with commercial property, to apply capital gains tax for all classes of investors.

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