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The Taoiseach has signalled that the Government will move to ensure properties leased to local authorities by investment funds will be owned by the State, ending current arrangements where corporations keep them.
Mr Martin said the State will “transition to different models” through its Housing for All strategy, but added that “you just can’t turn off the tap immediately” as for the second day in the Dáil he defended a change to financial legislation to re-instate a tax break for vulture funds.
An amendment will be made on Wednesday night to financial legislation to exempt vulture funds from a 10 per cent stamp duty surcharge for bulk buying of houses so long as those properties are leased to local authorities.
Sinn Féin leader Mary Lou McDonald accused Mr Martin of “hijacking” the Finance Bill, aimed primarily at supporting businesses re-starting after the pandemic, with a “sneaky amendment” to incentivise cuckoo funds to “snap up” complete estates.
Currently funds which bulk buy properties engage in 25-year leases with local authorities who rent the homes at market rate with the fund owning the property at the end of the lease arrangement.
Mr Martin insisted that 2,400 families “can benefit right now” through the provision of social housing units through leasing by funds to local authorities.
“We can move and transition to different models, which is what I want and which will be reflected in the Housing for All strategy”.
But “if we turn off the tap immediately there are 2,400 families on the housing list, not first time buyers” who would lose out on a home this year and he asked Ms McDonald “should they be left on the street or in unacceptable conditions”.
People Before Profit TD Richard Boyd Barrett said later however that the answer was to “cut out the vulture middle man and get the local authorities to buy it directly, which by the way is better value, will cost less in the long run, and will mean the State will have an asset. And then allocate that housing for both social and affordable housing.”
Over-riding the rule
In May, after public controversy when an investment fund bought an entire housing estate in Maynooth, Co Kildare, the Government introduced a rule requiring funds to pay a 10 per cent stamp-duty surcharge, rather than the normal 1 per cent for the block purchase of 10 houses of more over 12 months with apartments excluded from the bulk buying restriction.
But the amendment to the Finance Bill will over-ride the rule if they immediately lease the properties to local authorities.
At the time the Taoiseach said no local authority should be engaging in a long lease with these institutional investors, although he acknowledged that “a limited degree of leasing has some importance, but leasing over the long term does not represent great value for money”.
The Opposition accused him of doing a U-turn but he said that “leasing has been a feature of social housing for quite some time now. I have a view on that and we will change it”, through the Housing for All strategy, to be launched later this month.
Ms McDonald said one fund will bulk buy homes in Finglas, Tallaght and Blanchardstown and lease them back to the State for the next 25 years.
“They plan to buy up €500 million in homes to be similarly leased to councils over next the 36 months,” she said, adding that another fund, Greystar, is “set to snap up 342 homes in Griffith Avenue”.
She said it was “absolutely mindboggling” that the Government is allowing “speculators in the housing markets, who are exploiting citizens in this State to buy homes, ahead of hardworking families”.
She said they then charge scandalously high rents and pay no tax on their rental income and “you want to incentivise these funds to do precisely that”.
The Taoiseach insisted the Government had taken measures to “rein in” cuckoo funds. He said it was his view that properties long-term leased to the State should be owned by the State.
Ms McDonald called on the Taoiseach to “take this disgraceful amendment off the table, ditch the plan and go back to the drawing board and let’s have a plan that will work” for an entire generation “at their wits’ end wondering if they will ever escape the rent trap and own their own home”.
She said “you actions don’t help them one bit”.
But the Taoiseach accused Ms McDonald of “sloganeering” and exploiting the housing crisis for political gain.
But the Sinn Féin leader said the Government was “failing and failing miserably” with its housing strategy.