Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

5. To ask the Minister for Finance to outline any engagement he has had with the Central Bank on tax incentives and other demand-side measures for housing; and if he will make a statement on the matter. [16504/25]

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

What engagement has the Minister had with the Central Bank regarding tax incentives and other demand-side measures for housing and will he make a statement on the matter, particularly in light of what appears to be the Governor of the Central Bank pouring cold water on the latest apparently back-of-the-envelope policy on housing from the Minister for housing? It is reported that the Minister, Deputy Donohoe, will meet the banks regarding that proposal. What discussions has he had with the Central Bank on this and what is his view regarding banks lending and reducing the level of equity builders would need to have when lending for housing?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

My officials and I regularly engage with the Central Bank. However, I have not had any engagement recently with the Central Bank on the specific issue the Deputy has raised, which is the issue of tax-based support for housing.

The issue in the Irish housing market and so many of the social and economic difficulties that it is now causing are caused by a shortfall in supply. For more than a decade, the level of homes we have been building has not been in line with the needs of our society and the change in our demographic and economic growth. An increase in the supply of new homes remains a priority aim of Government policy. I will continue to work with my Cabinet colleagues to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of public money and boost the supply of homes in the public and private sectors.

A range of tax-based measures are already in place, namely, the help to buy scheme, the rent tax credit, the vacant home tax, the residential zoned land tax and the residential premises rental income relief. The Deputy will appreciate that decisions regarding taxation measures are made in the context of the annual budget. He will also know that I am not going to comment in advance of any decisions that are yet to be made.

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

We discovered during the election period that many of the Minister's colleagues, maybe himself included, went out and argued that there were going to be 40,000 houses delivered last year, which we know was a big lie because the Department of Finance had provided an assessment to the then Minister before the election that that was not possible. Indeed, there was a risk of fewer being built than in the previous year, which is what actually transpired.

The Central Bank is pouring cold water on and disputing the Government's housing projections for the next three years. It believes that the Government will deliver 13,000 fewer homes than projected over the next three years. The Government is trying to justify measures whereby banks should lend to developers where developers have less skin in the game themselves. The Central Bank has come out and poured cold water on that.

Surely the Minister, as Minister for Finance, is engaging with the Central Bank on this matter or is his Cabinet colleague doing a solo run? Double-digit price inflation is back for the first time in eight years. It was 11.6% last year. There is a role for the Central Bank in controlling inflation.

It is reported that the Minister is to meet the banks concerning this idea about less equity from builders and more lending by banks. Is that actually on the cards?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I will be meeting our banks to engage with them on the greater role they can play in regard to housing because we all know how much more we need to do. However, I have to recognise two different points. First, the banks are independent of the Government. Second, they are independently regulated. I will be engaging with them to see what further measures we can put in place that lead to more lending and more homes being built. However, I fully respect the independence of the Central Bank, as does the entire Government, because we know the stability of our financial sector is vital to more homes being built in the time ahead. We will consider additional measures, as we always do, in the run up to the budget from an investment point of view and also in the context of the review of the national development plan that is taking place.

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Will the Dáil be given some clarity as to the Minister for Finance's position? Does he agree with his Cabinet colleague that banks should lend more to developers on the basis that the developers would have less equity? That is the proposal that has been made. It seems a bit hare-brained and Celtic tiger era, but it is not the first time we have seen something like it.

We deserve to know what the Department of Finance and the Minister for Finance's position is. The Governor of the Central Bank has clearly poured cold water over the idea. I could not believe that the Minister for housing would make a statement like that without even discussing it with the Minister for Finance or the banks, but then, it is Fianna Fáil we are talking about, so I will leave it at.

What is the Minister for Finance's position? What is the position of the Department of Finance? Does the Minister for Finance agree with the Minister for housing's assessment that banks should lend more to developers with less equity provided by those developers? Will the Minister answer that question clearly because I would like to know, in his engagement with the banks, whether that something that is going to be under consideration?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I absolutely support all of the excellent work that the Minister for housing is doing in looking at what further measures can be put in place to lead to more homes being built. Regarding the Deputy's question, I support looking at ideas that will make more loans and more support available in our economy to lead to more homes being built. However, the Minister for housing and I do not want to see anything happen that leads back to the return of levels of lending and commercial practices that only create further difficulty. The Minister for housing will have the same view as me in that regard. What he is doing, as is his right, is looking at the different options that can be put in place to lead to more homes being built. He and I are clear that we do not want to see anything happen that is a source of additional financial risk because if that additional financial risk happens, it will only lead to more homes being built in the time ahead-----

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

Does the Minister support the proposal or not?

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

I have answered the Deputy's question.

Pearse Doherty (Donegal, Sinn Fein)
Link to this: Individually | In context | Oireachtas source

It is still not clear. Does the Minister support the proposal?