Peadar Tóibín (Meath West, Aontú)
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198. To ask the Minister for Finance if his Department has undertaken any study to determine the impact of real estate investment trusts on the Irish housing market; and if he will make a statement on the matter. [46923/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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Officials in my Department produced a report on Real Estate Investment Trusts (REITs), Irish Real Estate Funds (IREFs) and Section 110 companies with respect to their investment in the Irish property market in 2019. The report was presented to the Tax Strategy Group and provided a basis for policy discussions and for amendments which were introduced in Finance Act 2019 to strengthen the regimes. The report is available online at the following link: www.gov.ie/en/collection/dc3850-budget-2020-tax-strategy-group-papers/

A number of amendments were made to the taxation of REITs as part of Finance Act 2019, to ensure the regime operates as intended. The obligation to deduct Dividend Withholding Tax (DWT) was extended to include distributions of the proceeds of capital disposals. New measures were introduced to require the proceeds of property disposals to be re-invested in property assets or distributed within a set period. The deemed disposal provisions upon cessation of REIT status were restricted to REITs that have been in operation for at least 15 years, in line with the regime's stated objective of encouraging long-term, stable investment in rental property. Finance Act 2019 also introduced the “wholly and exclusively” test when calculating the REIT profits available for distribution. This is a common test throughout the taxes acts, its inclusion in the REIT legislation ensures fair and consistent treatment for those investing in Irish property.

As you may be aware, the Commission on Taxation and Welfare published its report “Foundations for the Future” on 14 September 2022. The report considered how the overall balance of taxation might shift in order to sustainably fund public services over the longer-term. The Commission recommended that the Government undertake a review of REITs and IREFs, having regard to the role of institutional investment in the Irish property market. Institutional investment has played a key role in the provision of housing in recent years. It is important to consider how best these structures can continue to support our housing policy objectives.

In light of this recommendation the Deputy will be aware that, as part of my Budget speech, I announced the intention to commence a review of both the REIT and IREF regimes. The parameters of these reviews and the timelines for delivery have yet to be finalised. However the Department can confirm that stakeholder engagement will be an important element of this work.