Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

I take the Deputies' points regarding the need for briefing on an amendment of this scale. It is something that I will take account of in future. I introduced the amendment on Report Stage because when I was working through the implementation of the change in non-residential commercial property and considering the consequences, it became apparent that there was potential to feed in to an increase in prices for non-residential commercial property that was being sold and that might be used for residential development in future.

I wish to address the point Deputy Boyd Barrett made. This is not about providing additional relief. We should see this measure in the context of the debate on non-residential property.

Perhaps you will give me a little more than the two minutes allowed, a Cheann Comhairle, so that I can answer all the questions put to me. If I miss any of them, I will respond further, given the scale of the amendment.

I will address the point about whether this is tax relief. As I have said, we should see this move in the context of going from 2% to 6%. The change from 2% to 6% amounts to a revenue gain for the Exchequer. As I outlined earlier, the amount is between €370 million and €380 million. This represents additional taxation for the development sector that we do not have in our base. I am keen to ensure that if land is to be acquired for homes and that land is currently classed as non-residential commercial property, then the higher rate does not lead through to the price of the homes going up at the other end or that the rate would not be used as a reason to push up the price of the land.

I am proposing to rebate four points of the six points, or 6%, to anyone who has a credible plan to provide more residential development. Let us suppose someone acquires land. The purchaser would have paid stamp duty of 2% on it. The rate now moves up to 6%. Indeed, it has been at 6% since the financial resolutions were passed. Upon enactment of the Bill, the purchaser will then get four points back. The rate will go back to 2% as it was before budget night.

This is not only about ensuring that it does not have inadvertent but likely consequences, such as pushing up the price of homes when they are built, but also serves to provide another incentive or reason to use land that has been acquired to supply residential development as opposed to other forms of development. That is the broad approach.

A specific question was put to me by Deputy McGrath on the timeframe. I engaged with the Department of Housing, Planning and Local Government on the question. The advice that Department gave me was that the 30-month period and, to address an additional question put to me by Deputy McGrath, the two-year period were reasonable timeframes to allow the planning process to start and end as well as to allow for the overwhelming majority, if not all, of residential development to be delivered. That was the assessment on the basis of my engagement with the Department of Housing, Planning and Local Government.

Deputy McGrath asked about green space. Deputy McGrath drew attention to the 75% and 25% proportions. These proportions are in place because I am keen to ensure that if land is bought and stamp duty is paid at 6%, then we do not end up in a position whereby a purchaser can buy 100 acres only to build two homes. Then, that person could come back and claim to have delivered residential development. That person could argue that since he had delivered residential development, he can take the 2% rate. We put in place criteria specifying 75% use of land. Alternatively, let us suppose someone buys land but decides to use that land to deliver high-density development, for the sake of argument, a large apartment block. We have provided that 75% of that development has to be used for residential property.

We are looking to deal with any avoidance measure in respect of the delivery of a small number of houses using the 75% criterion of the area of land. Furthermore, to ensure that high-density development is not impeded, we have set down the 75% proportion for the footprint of the building.

This leads to Deputy McGrath's question on green space and where it sits. Green space would then sit in the 25% proportion, unless it is green space that forms part of a garden. Again, I will explain the advice that I have received. Let us suppose some land is acquired and the owner develops a normal housing development. A measurement of the houses and a reasonable expectation regarding the gardens and the curtilage around the properties would get to the 75% proportion that is expected. We expect that requirement would be met easily. That would then deliver the 4% rebate. The green space would be in the other 25%.

Either Deputy Michael McGrath or Fitzmaurice asked about the timing of repayments. I expect that the Revenue Commissioners will repay the money as quickly as possible and I will ask them to do so because we want this to be another incentive for delivering residential development. Within reason, garden space is taken into account when defining a residential unit.

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