Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

Ba mhaith liom fáilte a chur roimh an mBille seo agus tréaslaím leis an Teachta Wallace as an Bhille a chur os comhair na Tí anocht.

The greatest challenge and, indeed, risk to our economy is the housing issue, in particular the supply of housing and house price and rent inflation. House price inflation has been at its highest rate in the last number of years, running at 13%. This year, rent prices are 22% above the peak levels in 2008. Despite these facts, the Government believes what it is doing is working. If that means adding fuel to the fire regarding these costs and concerns in the economy, I agree.

The vacant site levy is simply not working and we need radical change of the sort proposed in the Bill. Sitting on undeveloped land is completely unacceptable in this day and age. It is the worst and most harmful type of speculation and Government policy must tackle it. This Bill is the foundation to do so. The current levy and the Act, given the range of exemptions therein, do not work. We heard calls from Fianna Fáil again today to address these issues through tax incentives for developers and speculators. We have them already in the form of REITS and other structures which are paying an effective tax rate of 2%. Gaps in legislation allow them to purchase property blocks and sell or rent them at punitive cost. The rents set are at rates far higher than the cost of servicing a mortgage to purchase the same properties. We have a pervasive housing system which allows no capital gains tax to be paid by property funds. They can flip properties after five years without paying any tax whatsoever. It is not only funds which are involved in this, others are getting involved too, including pension funds, with Irish Life being the latest. Whereas the previous Finance Act provided that property had to be held for seven years before a CGT exemption could be claimed, this was reduced to four years in the last Act on foot of a proposal by Fianna Fáil. As a result, a huge amount of property has been flipped tax free in the State. The beneficiaries escaping the imposition of 33% tax are international investors.

These tax incentives simply do not work. They have pushed up house prices and rents and created a major housing supply problem in the State. We need less carrot and more stick. We need a punitive measure to ensure the worst type of speculation is no longer tolerated in the State. This Bill provides the foundation for that and I encourage the Government to state not only that it will not oppose it, but that it will allow it to proceed to Committee Stage. I ask the Government to cease its antics on money messages and the like.

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