Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

The Irish funding landscape has undergone significant change since the global financial crisis in 2008. In order to address the current imbalance between supply and demand of housing across all tenure types, the Government's Housing for All plan aims to significantly increase the supply of housing to an average of 33,000 units per year over the next decade. This is an ambitious plan which will provide increased housing supply and affordability. While the plan is backed by unprecedented State investment of more than €4 billion per annum, developing these homes will require a significant amount of capital and the Government cannot deliver on this programme alone. My Department estimated that more than €11 billion of development funding per annum will also be required from private capital sources. However, that being said, we have been clear that institutional investment should not displace home buyers in traditional estates where demand and viability is not an issue and the pathway to ownership for first-time buyers must be protected. The Government does not support the bulk purchase of residential houses by institutional investors. This is why the Government introduced a 10% rate of stamp duty on such purchases in mid-2021.

Furthermore, where such investment brings a profit, a fair share of tax must be paid and successive actions have been taken in recent years to provide for the collection of tax, including through the introduction of the Irish Real Estate Fund, IREF, regime in 2016 for funds invested in Irish property. This provides for both IREF tax at the point of distribution and for income tax at the level of the fund in certain circumstances. Certain categories of investors which are more generally exempted from tax, such as pension schemes, companies carrying on life business and charities, may be exempt from IREF withholding tax provided the appropriate declarations are in place. The details of IREF withholding tax and income tax paid by IREFs are published in Revenue’s annual corporation tax paper, the latest being for 2022 payments and 2021 returns, which is available on the Revenue website. For example, the combined IREF withholding tax and fund level income tax receipts in 2021 and 2022 were €53.8 million and €43.1 million, respectively.

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