Opposition parties say housing amendment will incentivise ‘cuckoo funds’

The Taoiseach has faced calls to scrap an amendment to a Finance Bill that opposition parties say will incentivise “cuckoo funds” to swoop in and buy homes from first-time buyers.

icheal Martin was accused of helping so-called cuckoo funds to evade measures aimed at limiting their role in the housing market.

Sinn Fein president Mary Lou McDonald said that the Minister for Housing Darragh O’Brien is to introduce an amendment in the Dail on Wednesday night which she said will afford cuckoo funds another tax break.

“(It will) actually incentivise them to buy up these family homes and to lease them back to councils,” Mrs McDonald told the Dail during Leaders’ Questions.

“So on the one hand, you tell the Dail that councils should not engage in long-term leases with institutional investors, and yet now your minister is actively encouraging this and this is happening now on your watch.

“You really couldn’t make this stuff up.

“The result of all of this, just to be clear, is that aspiring homebuyers will continue to be priced out of the market by institutional investors – investors who avail of sweetheart tax breaks, gifted to them by you, by Fianna Fail, by Fine Gael and lest we forget, by the Labour Party in its time too.

“If you really mean what you said in May, you will insist that Darragh O’Brien’s amendment is scrapped.”

Mrs McDonald accused the Taoiseach of “surrendering” the city to the vulture funds.

Under new planning rules, a 10% stamp duty for bulk purchases of 10 or more properties will apply.

The measure is aimed at tackling so-called cuckoo funds buying up housing developments from first-time buyers.

The Government said the measures will act as a deterrent to vulture funds and that any investor attempting to avoid them will be caught.

Social Democrats co-leader Roisin Shortall said that what the Government is now planning to do is “actually quite different”.

“Instead of catching out cuckoo funds trying to evade this measure, you’re actually helping them to do so,” Ms Shortall told the Dail.

“Cuckoo funds that leased homes back to local authorities will be exempt from the stamp duty increase.

“Now this Government is renowned for saying one thing and doing something else, but this U-turn can only be described as brazen and downright dishonest.”

She added: “Your own Housing Minister has quietly submitted an amendment to the Finance Bill which will actually incentivise cuckoo funds to swoop in, purchase homes from underneath the noses of first-time buyers, and then lease them back to the state.

“The measures you introduced to limit the activity of cuckoo funds in the residential property market were the bare minimum that was required. You didn’t even bother to include apartments.

“Now we learn that even the bare minimum has been diluted, that the promises you made to the people to do something about the activity of these funds are worthless.

“Fundamentally, your Government cannot be trusted.”

Mr Martin said: “You are distorting the Government’s response by focusing in on one single amendment tomorrow evening, as if that constitutes the entirety of Government policy, which of course it does not.

“You’ve been trying to undermine Government policy, because the bottom line is you don’t know where your own policy is.

“We are clear, we have a suite of measures, the largest social housing programme in the history of the state will be part of that social housing for all strategy, which will involve direct build.”