Alice-Mary Higgins (Independent) | Oireachtas source

The Minister of State has acknowledged that the complexion of the situation has changed in the past six months. This has not been a normal six-month period. The complexion of how our towns and cities might work has entirely changed. I do not think it is by choice that everybody is moving home. It is also because property has become very valuable, in a speculative way, over the past few years. Office blocks have been favoured in many cases, even in areas where housing is desperately needed. It is commercially and financially advantageous to those investors to invest in such properties.

These have been six months of change and the Minister of State needs to re-examine this matter. In particular, he needs to examine the measures in terms of commercial office blocks and whether we want to have advantageous tax relief for the building of office space when we have vast amounts of it that are empty. That is a substantial question of public finances, which is something in which I know the Minister of State, from his previous role, is very interested. I suggest it is an issue. If the Minister of State feels these are going to be examined again as a part of the annual review, it would be important for him to look at a cost-benefit analysis of the rationale for greatly incentivising an advantageous tax relationship for those building commercial office space, given the different choices we make as a State. Why are we doing it and why is it more important than other things? That is, ultimately, the core question relating to finances.

The Minister of State has already outlined the dividend withholding tax of 25%. The 33% capital gains tax would indeed be higher. The thing is that the buying and selling of properties is something the real estate investment trust, REIT, scheme is doing. The dividend question for investors comes at a later point. As I said, if a small business owner decides to buy or sell a property, or whatever, they will be paying capital gains tax and so forth. It is normal that the actions taken around the generation of profit by a scheme would attract tax. There is no small business owner in Ireland who does not pay VAT on whatever they buy in order to make profits. When selling or buying properties to generate profit for a REIT scheme, it would be normal for it to pay the costs along the way, such as capital gains tax. I do not regard that as double taxation. Ultimately, it should be the amount that the scheme has to pay in dividends after having paid capital gains tax on whatever purchases and so forth it has done or sales it has made. The scheme should pay tax as it goes and then give whatever money that remains as dividends and let that be reflected. One does not have to worry about people not paying because they will be paying tax on their incomes but only on the dividends after the appropriate costs, including the costs of contributing to the State through capital gains tax, have been paid. I would regard that as a more appropriate system. It is closer to the experience that most of us have.

I know we are not going to be able to move forward on this but I urge the Minister of State to reconsider this issue. He acknowledged, in his speech, that the past six months have not been like any other six months. The next six months will not be like any six months we have known either.