We are not incentivising cuckoo funds, insists housing minister

The Housing Minister has denied that the Government is "incentivising" the purchase of family homes by cuckoo funds by allowing investors to lease properties back to the state to avoid stamp duty.

Housing Minister Darragh O'Brien has denied the Government is "incentivising" the purchase of family homes by cuckoo funds by allowing investors to lease properties back to the state to avoid stamp duty.

Under new planning rules, a 10% stamp duty for bulk purchases of 10 or more properties will apply to any purchaser, with a particular focus on investment funds.

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.

However, an amendment to the Finance Bill will allow investment funds to buy up properties and rent them back as social housing.

Mr O'Brien said that the amendment was simply there to "protect social housing delivery" and said that up to 3,000 homes already in the pipeline would be protected under the amendment.

However, he said that the Government will not own the home at the end of the lease.

"There are some leases that are on the way — around 2,500 families — that will be housed in these homes,"  Mr O'Brien said. "It also covers mortgage to rent — are the opposition saying that we should not look after those people?

It will also cover the Repair and Lease scheme. But our focus is on delivering new-build homes, that's the predominance of what we're doing.

"I want to see leases that are bought by the State, but that's not in existence at the minute. But if anyone in the opposition is saying that they want us to scrap those leases, that is not something that I can stand over."

Mr O'Brien was speaking at the launch of Clúid Housing's delivery of Ireland’s first cost rental homes at Taylor's Hill in Balbriggan, Co Dublin.

He described the delivery as a "really important day" and said that the tenure would become far more widespread in Ireland. He said that the first year's delivery of 440 homes was "small, but it is a start".

"Cost rental has been talked about for years and has never been delivered."

The 25 new homes are a mix of two-, three- and four-bedroom properties. Under the Cost Rental Scheme; rents for the homes are set at a minimum of 25% below open market values with prices for the Taylor Hill, Balbriggan homes starting at €935 per month.

Applications officially open on the Clúid website today, with the properties available to move into in early August.