Cash-for-residency scheme has funded 3,500 social homes

Wealthy non-EU citizens have paid for about 3,500 social homes in the Republic through a cash-for-residency scheme that has lured €820 million to the State.

More than 1,100 non-EU citizens, most of them Chinese, have paid €826.5 million to social housing, healthcare facilities, charities and other projects in return for the right to live in the Republic under the Government’s Immigrant Investor Programme (IIP).

According to the Department of Justice, some of the cash was used to fund more than 3,500 social homes between 2012 and 2019. “However, it should be noted that approval does not equate to actual builds,” the department adds.

Of the total cash raised through the IIP since it began in 2012, €249 million has been invested in social housing, making it the investment category most favoured by participants. Nursing homes were the second most popular, getting €165 million.

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Accommodation crisis

According to the State's Housing Agency, 68,693 people qualified for social housing at the end of 2019, which is the last year for which figures were compiled.

The organisation is due to calculate what demand was in 2020 in coming weeks. Growing need for social housing has been a feature of the accommodation crisis with which governments have been wrestling for almost 10 years.

Developers complain that most banks here are unwilling to fund social housing construction, while private equity funds that do back these projects want returns of 8 per cent to 14 per cent a year.

In contrast, they say the IIP offers cheaper finance. However, builders maintain that getting Government approval for projects and backers takes time, as the rules are applied stringently.

Residency rights

The IIP offers non-EU citizens and their families the right to live in the Republic in return for a minimum investment of €1 million in projects that the Department of Justice approves for the programme.

They must invest the cash for at least three years, although most businesses require it for longer, after which it is returned to them. Depending on the business and the project, IIP investors can get a premium on their cash as well as residency rights.

They must also show their net worth is at least €2 million and must satisfy a range of anti-money laundering, security and tax tests before qualifying. They do not get Irish citizenship.

Figures released this week by the Department of Justice show that Chinese citizens accounted for 1,088 of the 1,162 people who have taken part in the programme. Some of those contributed to charities, an alternative to investment available under the IIP.

Business people who have raised cash through the programme say Chinese citizens use the scheme mostly to aid their children in learning English.