Fintan Warfield (Sinn Fein) | Oireachtas source

I move recommendation No. 13:

In page 95, between lines 4 and 5, to insert the following: "Report on the tax treatment and economic impact of institutional investment in the housing market

38.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the tax treatment and economic impact of institutional investors and corporate landlords in the housing market, including their impact on tenure, affordability, property price and rental price dynamics.".

This recommendation calls for a report into the tax treatment and broader economic impact of institutional investment in the housing market. Real estate investment trusts, REITs, and Irish real estate funds, IREFs, pay no corporation tax on their rental profit and no capital gains tax on the disposal of their assets. These tax advantages are not available to domestic landlords or any other company in the State.

In a reply to a parliamentary question on this issue, it was stated that institutional property investors and real estate funds paid an effective tax rate of 17.9% in 2020 based on taxable events in 2019. That figure of 17.9% was relative to the taxable event, meaning distributions to shareholders, not to rental profits. There has been a downward trend in tax paid through dividend withholding tax in recent years, with the amount collected falling from €65.8 million in 2020 to €36.8 million in 2021. That reduction has been attributed to the growth in forward-funding agreements and the decline in forward-purchase agreements that have been reported. It has also allowed for a circumvention of the 10% stamp duty surcharge that was introduced on bulk purchases.