Pearse Doherty (Donegal, Sinn Fein) | Oireachtas source

The Government has sold out the children of this nation who need a helping hand now. The Minister has reintroduced this tax break by extending the scheme. More than one fifth of houses that were bought through this scheme were bought at a cost of more than €375,000. Worse still, 40% of the people who availed of this tax break already had the 10% deposit that was needed to get the mortgage to buy the house. That 40% equates to €40 million that was handed out to people who did not need it to get the deposit to buy a house and yet Fine Gael and Fianna Fáil think that money is better spent in their pockets than it would have been spent in reaching out to people like Sam and many others who deserved a break in this budget. This is not an affordable housing scheme no matter what way it is wrapped up. The report by the Parliamentary Budget Office made it quite clear that it has done nothing to reduce house prices and has failed to help low and middle-income earners onto the property ladder. This is the affordable housing strategy of the Government and Fianna Fáil, the party of home ownership for only the wealthiest in society.

What has the Government done for the self-employed in the Finance Bill? Quite simply, not enough. The Government promised, in the programme for Government, to equalise the earned income tax credit and PAYE tax credit, bringing it to €1,650 by 2018. We will soon be entering 2020 and the self-employed are still waiting because it is only going to reach €1,500, €150 short of the amount promised to be delivered in 2018. Sinn Féin has shown clearly that equalisation should have happened and the Government has still chosen not to do it.

Section 64 of this Finance Bill provides an increase on the capital acquisitions tax, CAT, threshold from €325,000 to €335,000 at a cost of €11 million. That increase is unjustified and amounts to nothing more than a giveaway to the wealthiest in society. For the average family, the new threshold is still set above the average house price in the State, which stands at approximately €257,000. If we are to be honest with ourselves and the people, this was a gift from the Government to the wealthiest households in Dublin. Its sole policy outcomes will be to increase inequality, narrow the tax base and reduce available resources for our public services.

I will come to some of the issues that I welcome in the Finance Bill. We welcome the move in the Bill to heed Sinn Féin's calls to tackle the serious tax avoidance among property investors through REITs and IREFs. The Minister will know that I have continually banged on about this issue in this House and have submitted parliamentary questions. We have dealt with this matter in Finance Bills over a number of years and it has, unfortunately, fallen on deaf ears until this point. I welcome the move on that, particularly the provisions of section 28 which seem to close the re-evaluation loophole that was present upon REIT cessation by requiring that the relevant REIT must be in operation for over 15 years before enjoying preferential treatment. I would make the point that there should not be a CGT exemption even if a REIT was in operation after 15 years. If these properties are sold to a company after that time, the REIT should still not avail of a CGT exemption.

For example, Green REIT has latent property gains of over €100 million. It seems that this move should restrict the ability of the recent buyer of Green REIT, Henderson Park, from utilising the tax exemption that existed before and the Minister will be well aware that I have raised this case in particular with him on a number of occasions, both on the floor of the Dáil and through parliamentary questions. However, I ask the Minister, as I have before without answer, if the recent sale of Green REIT to Henderson Park will be caught within the change of this tax legislation.

Section 60 seems to close the tax loophole on stamp duty that has existed for investors for far too long. This Government decision is based on its listening to Sinn Féin on this issue but, unfortunately, a bit too late. The provisions of this Bill do not go far enough. Property investors have for too long been allowed to aggressively invest in property and avoid serious tax. They should be subject to the new 7.5% rate of commercial stamp duty just like everybody else. If somebody buys a sweet shop in my parish in Gweedore, they have to pay 7.5% stamp duty. When Henderson Park buys Green REIT, holding €1.34 billion of commercial property, it will pay 1% stamp duty.

The Minister will be familiar with what we did in the Finance Bill in 2018. At my instigation, we brought in an anti-tax avoidance measure where companies are able to sell shares at a rate of 1% but the anti-tax avoidance measure meant that gains derived from commercial property would be subject to a 6% rate. The idea and interpretation of legislation that means Green REIT is exempt from that anti-tax avoidance measure makes no sense and goes against the spirit of what I argued and for which I got support from the Government in bringing in that measure. That loophole should be closed in this Finance Bill. The sale of commercial property worth €1.34 billion under the control of Green REIT should be subject to stamp duty at the same rate as every other property that is sold in this State.

I have run out of time for my contribution but there is much more that I want to raise. I particularly want to make a point about the increased dividend withholding tax and Sinn Féin argued for its introduction in the first instance. After a period of time, the Minister agreed to that at a rate of 20% and that was welcome. Sinn Féin argued for that rate to be increased and, unfortunately, the Minister has not gone all the way to 33% but a move has been made, although we will argue it ought to go further.

As for the research and development tax credit, Sinn Féin has long argued that there needs to be a research and development-light scheme, which the Government is now introducing, and for SMEs to have preferential treatment for research and development at a 30% rate. I welcome that.

There are many other aspects of the Finance Bill that I will not get to because my colleagues want to come in on this debate but we will go through this in detail on Committee Stage. The closure of the loophole for Henderson Park, which will bring in millions of euro to this State, must be enacted in the Finance Bill.

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