Richard Bruton (Dublin Bay North, Fine Gael) | Oireachtas source

I thank the Deputies for their contributions to the debate. To make the sort of change which Deputy Fitzmaurice is proposing would require state aid approval. Setting a new effective date of 31 December would also create a very substantial disturbance in the housing market. This is something which is coming in tonight and on which we are voting tonight in order that the market can be clear on our approach and in order that artificial transactions will not occur as a result of timing issues. The provisions are very clear. They provide a number of very substantial reliefs for farm land. They include the case of the young farmer and the case of a person related by consanguinity. This concept goes quite far out and includes lineal descendants and so on. It essentially includes anyone in the wider family who would continue to farm the land. There is also a refund should the land be disposed of and used for housing. This must be weighed against the many other farming measures which are in place. While some farmers will pay the 6% if they choose to extend their holdings by purchasing land in circumstances other than those I have outlined, on the other hand substantial investment is being put in to strengthen the position of farming, particularly in light of the pressures which are coming from Brexit. It is important that this is one of the measures. It will largely be funded from the commercial property sector, which is being used to fund many much-needed changes, not least in our rural communities. It is worth recalling that back in 2008, stamp duty of 9% applied.

Turning to the point which Deputy Calleary raised on whether we are building on an unsustainable base, I do not believe that is the case at all. The present stamp duty raises €400 million in this area. This change would add another €376 million. There is a strong pipeline of commercial property building and activity. The Revenue Commissioners are very confident that there is a healthy demand and, if anything, an excessive supply. There is 10% of further office space in the pipeline. There is a strong pipeline.

On the issue of whether we should be relying on a transactional tax, this is very different from the situation that prevailed back in 2007 when stamp duty was raising 8.2% of total tax revenue. In addition, a further 15% was being raised from various taxes on the 90,000 houses which were being built. We had a situation whereby nearly 20% of tax revenue was coming from the property and housing sector. That is not the case here. The sum total of this additional revenue will represent less than 1% of total tax revenue. It is a very different situation. This is being done in the context of the need to encourage switching of use to unlock land for housing. This is not the only measure with that aim. Some €750 million of funding from the Ireland Strategic Investment Fund, ISIF, will be used to fund new builds. There is also €75 million going into infrastructural investment. The capital gains tax relief is also specifically intended to release land for housing. The circumstances are very different and this is an appropriate measure to introduce at this time.

I acknowledge Sinn Féin's support for this measure. I did read its pre-budget submission. This is an appropriate measure in the circumstances we are in. As I said, an effective date of 31 December would create uncertainty in the market. The details of the transition arrangements will be worked out in the Finance Bill. There will be ample opportunity for debate on the details of that Bill, including consideration of Deputy Catherine Murphy's point on whether this refund for converting such lands to housing should have a sunset clause. It is clearly the Minister's intention that we maintain balance in our property market. He is intervening at a point when one segment of the property market is very strong and at risk of overheating, while another is depressed and needs to respond. He will be very conscious of that.

Deputy Mattie McGrath has raised a concern about excessive accumulation of very large holdings by individuals. This tax would certainly discourage that in that it would be chargeable on any such accumulation. Deputy Fitzpatrick raised the issue of whether this would affect small business. It would affect small businesses in the event that they were selling their business or a big property element of it, but the sort of small business which we really need to invest in is the sort which creates enterprise and employment rather than the sort involved in the selling of a business or a particular piece of property. The budget leans towards supporting those small businesses with the €300 million fund for loans at 4%. Getting access to those funds will be a real boost for small businesses. Many of those businesses are trying to trade online. The Minister, Deputy Naughten, announced improvements in supports for businesses seeking to trade online. There are many microelements of the budget which seek to support small business. I commend this motion to the House.

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