Tuesday, 1 June 2021
Department of Housing, Planning, and Local Government
329. To ask the Minister for Housing, Planning, and Local Government if his attention has been drawn to the impact of the recently announced changes to stamp duty in respect of the bulk buying by investment funds of houses, on organisations active in the mortgage to rent sector (details supplied) and that are in the process of purchasing homes under the mortgage to rent scheme in order to lease back to distressed homeowners; if he has been in contact with the Minister for Finance with regard to identifying a way in which such organisations may be exempted from the new stamp duty regime under certain circumstances and informed by the way in which approved housing bodies have been exempted under the new system; and if he will make a statement on the matter. [29478/21]
The Mortgage to Rent (MTR) scheme provides for an Approved Housing Body (AHB) or since 2018 a private funder to acquire ownership of a property with an unsustainable private mortgage from a lender, which also enables the household to remain in their home as a social housing tenant. The scheme is an established part of the overall suite of social housing options and an important part of the mortgage arrears resolution process. The household must be eligible for social housing and the property must meet the appropriate standards for social housing.
To the end of March 2021, 1179 households with unsustainable private mortgages have completed the MTR scheme since its introduction nationally in 2013. The 1179 households in the scheme represent 1970 adults and 1699 children who have remained living in their homes and communities. There are currently 1079 active cases being progressed under the scheme.
The Dáil approved, by way of a Financial Resolution, on 19 May 2021 a new higher stamp duty rate of 10% that will apply to the multiple purchase of houses. This measure was introduced in response to the multiple purchase of residential units by certain institutional investors in the Irish property market. Disincentivising the bulk buying of homes will enable these homes to be made available for purchase by owner occupiers, particularly first time buyers.
As some multiple purchases of property are undertaken by bodies specifically for the purpose of providing social or affordable housing, the higher stamp duty rate will not apply in such instances e.g. Local Authorities, AHBs and the Housing Agency. The Minister for Finance also indicated when bringing in the Financial Resolution, and after consultation with me, that in addition to the exemptions provided for Local Authorities, AHBs and the Housing Agency from the 10% stamp duty rate, exemptions for other social and affordable housing arrangements would also be considered.
It is my intention that exemptions from the higher stamp duty rate in respect of homes acquired for social and affordable housing, including homes acquired under the MTR scheme, will be included in the legislation that will come before the Oireachtas in the next few weeks to permanently underpin this Financial Resolution. Addressing this matter through legislation over the next number of weeks should ensure that MTR transactions in progress by Home For Life are concluded. Those MTR cases being progressed by iCare will proceed as normal.