Cian O'Callaghan (Dublin Bay North, Social Democrats) | Oireachtas source

I move amendment No. 1 to amendment No. 1:

To insert the following after "arguments from opposition parties": "calls on the Government to:

— introduce legislation to impose a stamp duty surcharge on the bulk purchase of homes by investment funds at a minimum rate of 100 per cent".

In 2022, as the figures released today show, 395 homes were bulk-purchased and last year 623 homes were bulk-purchased, with the funds paying this 10% stamp duty rate that the Government told us would get rid of this terrible practice of homes being snatched up by funds and out of the hands of individual buyers, who work so hard, put so much effort in and go through so much stress to get the money together to buy a home. They then have those opportunities snatched away from them with the support of this Government. It shows how utterly out of touch this Government is with people. It also shows that the 10% stamp duty measure, as we warned, has been ineffective and is not working. Given that the Government told us at that time that it was trying to stamp out this practice and that the 10% stamp duty would work - we said it would not - you would think, now that we have the hard evidence, not only the instance in Belcamp Manor but also the figures from recent years, that the Government would now be saying, "Yes, our 10% stamp duty measure was ineffective. We will raise it." We should be having a discussion on what level it should be raised to. Somehow, however, the Government is defending the practice of the bulk-purchasing of homes such as those at Belcamp Manor. It has nothing to say about changing this. That shows that the measures it took were not genuine and that what it said about them was not genuine but only a smokescreen, only an attempt to make it look like it was taking some action.

The situation in this country now is that investment funds have sweetheart tax treatment, pay virtually no tax and have some of the highest rents in Europe. At the same time, they provide some of the lowest levels of security to renters. The corollary of that is that, for individuals, we have the highest level of homelessness on record, which is connected to the very high rents these funds charge and the very low level of security for renters. We have declining homeownership - the lowest level in more than 50 years and still falling. We have record rents and renters paying exorbitant rents but some of the lowest levels of security for renters in Europe. I have said here many times before that the norm in most European countries, where people pay rents much lower than in Ireland, is that when you pay your rent, you do not get evicted. Here, renters pay some of the highest rents in Europe and can be evicted for all sorts of reasons.

The recent purchase of 46 homes at Belcamp Manor by Deutsche Bank's investment arm shows us three things. It shows us that homes have been turned into investment opportunities and commodities by Government policy. It shows us that the rents are so astronomically high that such funds can easily offset a 10% stamp duty and that it is not a deterrent to the bulk-purchasing of homes by funds. Using Belcamp Manor as an example, rents of €3,175 a month are being charged. That is more than €38,000 a year or, for the 46 homes, a staggering €1.75 million in rental income in one year. Looking at the stamp duty liability of 10%, clearly, from rents such as those, the fund will be able to get back what it spends on the stamp duty in not much more than a year. That shows clearly that it is not a deterrent. It is simply not an accident that under this Government homeownership levels are at their lowest in more than 50 years. It is pursuing policies that make it harder and harder for individuals to buy, and easier and easier for funds to keep buying up more and more housing.

Research, and analysis, has been carried out as to what role investment funds have played in recent years. The Government has continued to say, "We cannot take measures here. We need the investment from funds to providing new housing." The research shows, however, that half of what funds have bought up and now own is second-hand housing, taking that out of the supply for individual buyers and pushing up prices. That is what funds have been doing.

The Government has not told us tonight how it thinks individuals can possibly compete with €800 billion asset management funds. That is what the Deutsche Bank investment arm has - €800 billion at its disposal. How on earth is any individual meant to compete with such asset managers? Why has our Government, elected to represent us, the people in Ireland, allowed such a situation whereby homes are intended for individual buyers and given planning permission with that intention? I know this area intimately well. It is in my constituency. No one ever thought those homes would go to an investment fund. There was no indication of that as it went through the planning process and everything else - none at all. Why is our Government allowing that to happen? Why is the Government not focused relentlessly on what we need to do, which is the provision of more affordable homes for people to buy and rent? That is what the Government should be and could be doing.

As regards the amendments I have tabled, we in the Social Democrats want a ban on funds buying up homes. We believe an effective ban on buying up homes could be achieved by a 100% stamp duty rate targeted at funds buying up homes already built that otherwise would be available for individual buyers. We are very concerned about the Government's 10% stamp duty rate. While we support the spirit of the Sinn Féin motion, we believe the 17% stamp duty rate Sinn Féin proposes is very weak. A small increase in stamp duty on bulk purchase is simply not going to cut it. These €800 billion asset management funds will not blink twice at buying up homes that they can rent out at these kinds of lucrative rents with a 17% stamp duty. It will not put them off, and anything less than a 100% rate runs the risk simply of more and more homes continuing to be snatched up by funds.

It is worth noting that, as regards homeownership in Ireland, going back to 2006, the average age at which someone bought his or her first home was 29. Now the average age at which a person leaves home for the first time, moves out of his or her parents' home, is 28 and rising. Contrast that with countries such as Denmark, where the average age at which someone moves out of home is 20 to 21.

There are things the Government could and should be doing on affordable housing. Yes, we need the punitive stamp duty rate of 100%, but we also need the Government to take measures. The programme for Government, on housing, refers to what is being done in Vienna, but we do not see that happening here. There should be, for example, the introduction of zoning for affordable housing, like there is in Vienna, such that when lands, especially industrial or agricultural lands, are rezoned for housing, rather than the landowner making a massive uplift from that rezoning, instead there is a limit on the rent or the price per square metre that can be charged in respect of the homes on that land.

Zoning for affordable housing is something that works well in Vienna and could be done here. Of course, we need the implementation of the Kenny report. It is 50 years since it was published. The Government still is not doing that. There are solutions the Government could take to make housing much more affordable for people. There are good examples from other countries and good proposals that were made here 50 years ago which have still not been implemented. We need the Government to get serious about this and put an effective ban in place, with 100% stamp duty, to end the bulk purchase of homes by funds.

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