Government rules out stamp duty hike for bulk buyers

Higher tax rate has raised €40m for the Exchequer since 2021, new figures revealed

A higher stamp duty rate that applies to bulk buyers of residential houses generated €40m for the Exchequer between 2021 and 2023.

But Finance Minister Michael McGrath said the government has no plans to hike the rate or alter the thresholds that apply to the tax.

Earlier this year, Sinn Féin pressed the Government to raise the rate to 17pc.

The Government introduced the 10pc rate in May 2021, for where 10 or more residential units are bought in bulk by one buyer.

The levy applies only to the bulk purchase of houses rather than apartments and is triggered where 10 or more houses are bought by a single purchaser in any 12-month period. The higher rate is applied once the 10th property has been bought and then applies to all 10 or more properties bought in the period.

The higher rate was introduced in an effort to curtail the bulk purchase of houses, which are then typically rented out by investors.

Hundreds of houses worth hundreds of millions of euro have been bought by investment firms and other bulk buyers in recent years.

Some are taking advantage of the generous returns they can generate through high rents.

Other bulk buyers have included companies such as Ryanair, which earlier this year confirmed it was buying houses in Swords, Co Dublin to rent to cabin crew.

In January this year, Sinn Féin unsuccessfully urged the Government to back its motion to raise the stamp duty rate on bulk house purchases to 17pc.

It argued that unless that was done, investment funds would keep buying houses that should be made available for families.

Sinn Féin has argued that the 10pc rate is not acting as a sufficient deterrent.

Last year, 46 of 54 houses built at Belcamp Manor in north Dublin were snapped up by an investment fund. Four-bedroom homes bought by the fund were put up for rent at €3,250 a month.

Mr McGrath told Sinn Féin’s Pearse Doherty and Denise Mitchell in response to a parliamentary question this week that the number of houses being sold to bulk buyers is low.

“Revenue and CSO data show that that higher stamp duty rate has applied to less than 1pc of residential property transactions between May 2021 to end-2023, and has applied to less than 2pc of total new dwellings completed since 20 May, 2021,” he said.

The minister insisted that given the measures the Government has taken to increase housing supply, and the steps already taken against bulk purchasing of residential property, “I do not have immediate plans to increase the rate and reduce the threshold at which the higher stamp duty rate on certain purchases of residential property applies”.

Housing starts in Ireland have continued to soar amid continuing strong demand from buyers.

The latest figures from Goodbody Analytics this week showed that housing construction commencements jumped 67pc year-on-year in the first quarter of this year. Apartments accounted for 41pc of the starts in the quarter.