The Government has not agreed on a doubling of the tax on investment funds that purchase houses in bulk but is open to reviewing the stamp duty, Minister for Housing Darragh O’Brien has said.
He said he is working on proposals with the Minister for Finance, Jack Chambers, but that it would not be “appropriate” to discuss what potential increases there may be.
The Fianna Fáil TD’s comments come following a report in the Sunday Times that the Fine Gael Minister of State in the Department of Finance, Neale Richmond, said his party wanted the rate of stamp duty on the bulk purchase of new homes by investment funds to be doubled to 20 per cent.
Speaking also on RTÉ radio’s This Week programme on Sunday, Mr Richmond said the higher rate of 10 per cent had worked “to an extent” and had “slowed down” bulk purchases but, describing Fine Gael as the “party of home ownership”, he said there was now a case for doubling the rate to 20 per cent.
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Speaking to The Irish Times on Sunday, Mr O’Brien said: “Nothing is agreed yet in relation to any of our budgetary measures.” He said that setting the rate of stamp duty was “a matter for the Government as a collective and there are many proposals being worked through”.
The Minister said he had met Mr Chambers and they were “very open” to reviewing the rate.
“I don’t think it would be appropriate that we get into a discussion on what rates would look like, or what potential increases that there may be,” he added.
“My big focus is on continuing the very significant progress we’ve seen in housing output ... I want to maintain the first-time buyer supports and expand them, if at all possible, under the First Home Scheme, the Help to Buy grant as well.
“There are discussions I’ve been having with Minister Chambers as well and obviously, as this is a tax measure, the stamp duty measure, the lead department is Finance, but Government as a collective will decide.”
Separately, a spokesperson for Mr Chambers said he will discuss all budget-related matters with party leaders in the coming days and weeks.
“The Department of Finance has conducted a review of stamp duty for bulk purchases which will be considered by the Minister for Finance and Government Ministers in the coming period. As budgetary negotiations are ongoing it would be inappropriate to comment until such matters have concluded. Budget 2025 will be delivered on October 1st,” he said.
Mr Richmond said that even though the Government had voted down a Sinn Féin proposal to increase the rate at the start of the year, the proper time for budget proposals was in the autumn. He said institutional funds had some role to play but not to the extent they were currently doing, which he said saw 600 homes being purchased in bulk this year.
He said he would be raising the proposal in talks with Mr Chambers this week but had not discussed it in detail with him yet, nor with Mr O’Brien.
Mr Richmond indicated that if a stamp duty increase for investment funds was not included in the budget he would push for it to be included in the Fine Gael election manifesto. He did not directly address suggestions put to him on RTÉ that he was trying to put pressure on Fianna Fáil, but said that he did not believe his proposal would cause friction within the Coalition.
After a controversy arising from the bulk purchases of homes in a Kildare housing estate, the Government introduced the 10 per cent rate on purchases of 10 homes or more in May 2021. It applies to bulk purchases of houses rather than apartments and kicks in when 10 or more houses are bought by a single purchaser in any 12-month period.
However, bulk purchases have continued in some instances, with examples in north Dublin. In January, the then minister for finance, Michael McGrath, argued that the higher rate had applied to fewer than 1 per cent of residential transactions, indicating that activity at this level was not significant.
A Fianna Fáil source said that the party would not oppose such a move, but that there was likely to be some resistance within the Department of Finance amid concerns over the impact on some companies’ balance sheets and capital flows into Ireland.
The source added that data suggested the practice had been effectively clamped down on, but that high-profile examples such as Ryanair buying houses to accommodate crews meant controversy could flare up around the practice – although this was different from the original problem which the Government was seeking to control.
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