Ir­ish stock in­vestors

The Irish Times - Business - - BUSINESS | AGENDA - Joe Bren­nan

In­vestors in the Ir­ish stock mar­ket – where shares have fallen more than 11 per cent so far this year – had been hop­ing that Bud­get 2019 would give them some relief. Dono­hoe started a pub­lic con­sul­ta­tion last year on the fu­ture of the 1 per cent stamp duty on trad­ing in Ir­ish com­pany shares.

There had been an­tic­i­pa­tion that the Min­is­ter would move to at least lower the rate to match the UK’s 0.5 per cent levy as he had put the re­view in the con­text of po­si­tion­ing the Repub­lic for Brexit.

How­ever, the al­most €400 mil­lion the tax cur­rently gen­er­ates for the ex­che­quer ap­pears to have been too much for the Gov­ern­ment to give up, es­pe­cially as it has had to rely on un­pop­u­lar mea­sures such as the tourism VAT hike.

Paddy Power Bet­fair

Bud­get days are be­com­ing some­thing to be feared at Paddy Power Bet­fair’s head­quar­ters in Clonskeagh in Dublin 4.

Shares in the book­maker have fallen by more than 6 per cent in Lon­don since Dono­hoe an­nounced plans to dou­ble the Repub­lic’s bet­ting tax to 2 per cent and raise the duty on com­mis­sion earned by bet­ting in­ter­me­di­aries or ex­changes from 15 per cent to 25 per cent.

The stock is now trad­ing at lows not seen since Paddy Power and Bet­fair an­nounced their plans to merge three years ago. The group, led by chief ex­ec­u­tive Peter Jack­son since Jan­uary, has said the mea­sures will cost it al­most €23 mil­lion.

“Ir­ish au­thor­i­ties have been quite le­nient up un­til now on gam­bling com­pa­nies rel­a­tive to other ju­ris­dic­tions – but they’re tight­en­ing up,” said Dar­ren McKin­ley, an an­a­lyst with Mer­rion Cap­i­tal.

Ires Reit

The bur­geon­ing pri­vate res­i­den­tial sec­tor’s plea that it is part of the so­lu­tion and not the prob­lem when it comes to Ire­land’s hous­ing cri­sis seems to have re­ceived a favourable hear­ing from Gov­ern­ment.

Fears of higher stamp duty on the sec­tor in the bud­get proved un­founded, a relief to Mar­garet Sweeney, chief ex­ec­u­tive of Ires, Ire­land’s largest pri­vate land­lord with more than 2,600 apart­ments.

“We be­lieve the cur­rent ap­proach is ap­pro­pri­ate and will un­der­pin the fur­ther in­vest­ment that is re­quired through 2019 and be­yond to de­liver the vol­ume of apart­ment and house build­ing which is clearly re­quired,” said a spokes­woman for Ires.

Ac­quir­ers of apart­ment blocks avoided a move by Dono­hoe last year to triple stamp duty on com­mer­cial prop­erty deals to 6 per cent. That’s be­cause deals in the sec­tor are typ­i­cally struc­tured so that apart­ments in a scheme are sold in­di­vid­u­ally. Res­i­den­tial prop­erty sales worth less than €1 mil­lion are only sub­ject to a 1 per cent stamp duty.

It had been spec­u­lated that Dono­hoe would tar­get funds and com­pa­nies buy­ing more than 10 or 15 units with a higher duty rate – ad­dress­ing a pop­u­lar view that in­vestors were el­bow­ing first-time buy­ers out of the mar­ket.

Still, Kil­lian O’Hig­gins, manag­ing di­rec­tor of WK Nowlan Real Es­tate Ad­vis­ers, warned it would be pru­dent for large pri­vate res­i­den­tial in­vestors – who spent al­most €390 mil­lion buy­ing up apart­ment blocks last year – to await for the pub­li­ca­tion of the Fi­nance Bill next week be­fore breath­ing eas­ily again.

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