Denis O'Donovan (Fianna Fail)

I have great empathy for the proposal being brought forward by colleagues on the opposite side of the Chamber. The Law Reform Commission indicated in its report that imposing a 5% levy would be a good step. I am somewhat enamoured of the concept. The Minister and his advisers and officials have probably considered the matter from various angles. I am sure he would be prepared to engage in further scrutiny of the matter with a view to dealing further with it on Report Stage, which is fair.

Would there be any tax implications in respect of the figure of 5%? I accept that it appears to be a small percentage. However, what would be the tax implications - vis-À-vis VAT, etc. - for someone who builds a 100-unit development where each unit sells for €200,000 or €250,000? If 96 of the units are fully or substantially complete, how would the 5% be apportioned in the case of the four in respect of which difficulties have arisen? Would it be possible to mediate or arbitrate in the matter?

The Minister made a valid point, namely, that in the past the grant for first-time buyers would not have been passed on to those purchasing homes. Historically, we have failed to deal with this matter. In the early 1980s the Fine Gael-Labour Party coalition introduced grants to allow people to refurbish their homes. That was a great concept and it cost £5 million in the first year. However, many developers took advantage of the scheme and one such individual refurbished 18 or 20 properties. The then Government was interested in assisting those whose roofs might have been falling in or who wanted to build a new bathroom or kitchen. The concept was excellent but the scheme was so widely abused the then Government decided to abandon it before it left office. This example highlights the fact that there have been difficulties with moneys that were meant to benefit first-time buyers, etc., being diverted elsewhere.

Perhaps the Minister might indicate if there are any tax implications in respect of this matter. Will he also outline how the 5% trust funds might be administered? It would obviously be easier to apportion the moneys in the case of small schemes of five or ten apartments or houses. I have some sympathy with the concept. However, we are aware that the greed of builders and developers has led to the purchase price of houses and apartments increasing. I would not like to see such individuals exploit trust funds such as those to which Senator Coffey referred.