Seán Fleming (Laois-Offaly, Fianna Fail) | Oireachtas source

I propose to take Questions Nos. 101, 123, 130 and 141 together.

Institutional investment in the commercial and residential property market continues to be critically important to ensure the ongoing supply of new housing. This is particularly the case in areas where there are viability challenges, in the area of high-density urban apartments for example. As with investment funds generally, tax occurs primarily at the level of the investor rather than within the fund and it is important to make that point. That is what most people would want. The end beneficiary should pay the tax, not the intermediary which is just the investment fund. It pays tax as well but the beneficiaries should be caught for most of the tax, as is currently the case.

Additionally, in the case of both Irish real estate funds, IREFs, and REITs, withholding taxes apply on distributions to investors to ensure collection of tax revenues. In 2019, I made a number of significant amendments to both regimes to ensure appropriate levels of tax are paid by investors in Irish property. Due to the small number of market participants within the REITs regime, and to protect taxpayer confidentiality, I am advised by Revenue that it is not possible to provide data with respect to the residential holdings of REITs. On IREFs, I am advised by Revenue that is not possible to provide data on the number of residential units acquired by IREFs in a year, or whether these units were existing dwellings, forward purchases or forward funding. However, I am advised that IREFs invested approximately €2 billion in residential assets in 2018; €3.5 billion in 2019; and €4.1 billion in 2020. A county breakdown of this investment is not available, with the exception of Dublin. IREFs invested approximately €1.9 billion in residential assets in Dublin in 2018; €3.1 billion in 2019; and €3.5 billion in 2020.

Notwithstanding this increased activity, it must also be recognised that institutional investors still account for a relatively small share of the residential housing market. According to the latest available CSO data, the real estate sector, a close proxy for institutional investors, accounted for just 3% of the purchases of all dwellings in 2020 and 6% of the purchases of new dwellings. According to CBRE Group, investors owned approximately 19,500 properties in 2020, accounting for less than 1% of the total housing stock.

In response to a previous question I mentioned that mortgages for private individuals this year alone were at their highest levels since 2008. So far this year the mortgages raised by people in this country have been worth €7.2 billion. When we add on the ambitious Housing for All programme with local authorities and approved housing bodies, people will see that the overwhelming majority of houses being built in the State are either provided through social housing by local authorities or approved housing bodies or through people getting their own mortgages, using the various schemes out there such as the help to buy scheme. The vast majority of houses are being purchased exclusively with beneficial ownership, be it the house owner, the local authority or the approved housing body.

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