Draft review of stamp duty does not advocate for increase in rate
A review of the stamp duty rate on the purchase of ten or more homes is not advocating for a hike in the 10% rate.
RTÉ News has learned that the early draft of the Department of Finance’s review favours leaving the rate unchanged.
The study of the rate commenced earlier this year following a request from Simon Harris after he was elected Taoiseach.
At the time, he suggested that the 10% rate had not been entirely successful in its goal of curbing the bulk buying of new homes needed for first time buyers.
It comes after the Taoiseach denied that the Government has been engaged in a U-turn when it comes to the issue of doubling stamp duty on the bulk buying of homes.
Earlier this year, the Government opposed a Sinn Féin proposal to increase the tax to 17%.
However, at the time, Mr Harris said there should be a review into the effectiveness of the tax.
Speaking to reporters in Dún Laoghaire, Mr Harris said the move is the opposite of a U-turn and it was important to keep the issue under review.
“It’s an appropriate way to do things, as I’ve consistently said in the Dáil since becoming Taoiseach,” he said.
“If you make changes to taxation, you generally do it through the budgetary process. Obviously, the three parties in Government will decide how best to address this, and the Budget will be delivered on 1 October.”
The Taoiseach said he was pleased with the measures that the Government had taken to try and tackle the issue of bulk buying.
Mr Harris added that he wrote to the Department of Finance about the issue and hopes to see progress on this in Budget 2025.
“They would have confirmed that they are carrying out a review. So, you know, we need to make sure every single tool at our disposal is being effectively used, and we always need to keep these matters under review that’s in the consistent position of the Government.”
Meanwhile, Tánaiste Michéal Martin has said the Government needs to be careful in terms of how budgetary matters are played out.
Speaking at a press briefing in Newry, Mr Martin said he was urging caution about any changes to stamp duty in the Budget.
“I would urge caution in terms of market sensitive issues so in terms of the stamp duty issue for example the Minister for Finance [Jack Chambers] had already commissioned a substantive review of that. That review is nearing completion.”
Mr Martin said he was surprised at comments from Fine Gael’s Neale Richmond around stamp duty.
Mr Richmond said stamp duty on bulk buying of new homes by “vulture funds” should be doubled and should be part of the upcoming Budget.
“I’m surprised at Deputy Neale Richmond’s comments yesterday because I would have thought the sensitive thing would have been to await the outcome of the review.”
The Tánaiste said the issues needed to be approached in an evidence-based way and in a substance-based way.
“The sensible thing would have been to await the review. There had been no heads up with the Minister of Finance with respect of this,” Mr Martin said.
‘A desperate attempt’
The main opposition party has criticised the Government parties for allowing bulk purchasing of homes in the first place, a practice that has been taking place for over a decade.
“This is now a desperate attempt ahead of an election to try to get the electorate to forget the damage they have done, with vulture funds buying up properties under the noses of workers and families” said Sinn Féin finance spokesperson Pearse Doherty.
“In January, Sinn Féin introduced a motion to substantially increase the stamp duty paid by these funds in the Dáil. The government voted against that motion. That was the time to act, not after more family homes have been snapped up. After thirteen years of Fine Gael in government, home ownership has collapsed with 40% of people under 34 still living with their parents. That is Fine Gael’s record.”
Meanwhile, figures released to RTÉ’s Morning Ireland by the Department of Finance show the number of houses bought by non-household entities declined last year.
In 2023 these entities purchased 12,201 units down nearly 10% on the previous year. However, the 2023 purchases equated to 19% of total units purchased.
Non-household entities include private companies, charitable organisations and State institutions.
When the activity of private institutional investors is broken out however, the figures show purchases were down 46% in 2023 compared with 2022, with 3319 units purchased last year.
This group also sold 4604 units into the market in the same period making them net sellers of homes.
State activity in the housing market, which includes purchases by approved housing bodies and local authorities, increased by 31% to 5,778 units. These homes represented 47% of all purchases by the non-household sector in 2023.
‘A self-serving spat’
Labour’s Finance spokesperson Ged Nash said the stamp duty rate “needs to be doubled”.
“Labour never believed a 10% rate on stamp duty would act as a disincentive and we have been proven to be right,” he said.
Mr Nash said that “instead of a U-turn Fine Gael would be better off putting up their hands, accept they got this badly wrong and own this mess of their own making”.
The Labour TD described the matter as a “a self-serving spat” that, he said, is “designed to insert Fine Gael into the housing debate”.
“Fine Gael has no credibility on this and they owe an apology to first-time buyers priced out of owning their own home by funds with deep pockets,” he said.
O’Gorman calls for once-off bonus payment for newborns
Green Party leader Roderic O’Gorman has said his party wants new parents to receive a special once-off bonus child benefit payment along with the first regular payment for their newborn.
Mr O’Gorman, who is also Minister for Children, Equality, Disability, Integration and Youth, said this will help parents in a tangible and meaningful way at a time when finances are under pressure.
Speaking on RTÉ’s Today with Claire Byrne, he said: “The idea is that alongside the initial child benefit payment of €140, there’d be a boost for that first payment, and we’re talking about quadrupling it and bringing it up to €560 for that first payment.
“We will bring this idea of a boost payment forward to budgetary negotiations.
He said that while inflationary pressures are easing, many built in costs remain and it is important that the Government does all it can to support families.
Mr O’Gorman said he would like the State to directly provide the Early Childhood Care and Education years for pre-school children, and that those two years should be a legal right for children.
He said greater State intervention in early years would provide services in those areas where there is a lack of childcare capacity.
“I think in the next five years, it is about delivering extra capacity in areas that need it, and continuing to grow the overall level of funding.”
The Taoiseach said he did not feel the need to rein in his coalition partners who are speaking about their Budget 2025 wishes.
“Look, it’s the time of the season, isn’t it, where obviously lots of political parties will put forward their views.”
Mr Harris said: “The programme for government recognises that while we’re three parties in coalition, we are three parties, and political parties have the right to be political parties.
“Of course, when it comes to Budget day, the three parties come together and devise and design a Budget. We’ll have a series of meetings as leaders with the Finance Minister and the Minister for Public Expenditure and Reform.”
Mr Harris said that a priority for him in Budget 2025 is to tackle child poverty.
“Its an absolute priority for me, and I welcome the fact that it’s a priority for others in coalition, that this budget has a real focus on children, families, tackling child poverty and making sure that every child gets off to the best start in life.”
Land hoarding tax
Minister O’Gorman also said his party wants to see the land hoarding tax introduced in the next Budget.
If we are serious about tackling the housing crisis, then we need to use every tool available to us, he said.
The tax is not about impacting farmers who are working their own land, he added.
“They were never the target of this tax. This tax is designed to target people who are hoarding land, people who have the planning, who have the services, and are hanging on to see the value of that land go up.”
Mr O’ Gorman said that implementing the tax would represent a really important step forward for the Government.
It would be hard to say that we have done everything we can to tackle the housing crisis if this tax is left on the shelf, he said.
Article Source – Draft review of stamp duty does not advocate for increase in rate – RTE
