Government considers total ban on vulture funds buying up thousands of family homes 

TDs and senators from opposition and government parties alike call for measures to stop investors 'outbidding ordinary buyers'
Government considers total ban on vulture funds buying up thousands of family homes 

Housing Minister Darragh O'Brien is now looking at various emergency options. Picture: Gareth Chaney/Collins Photos

An outright ban on vulture funds is being considered as the Government scrambles to block international investors from buying thousands of family homes.

Darragh O’Brien, the housing minister, is looking at various emergency options after it emerged that international investors have been buying up almost entire housing estates and preventing first-time buyers from getting on the property ladder.

The option of banning foreign property investors from purchasing all properties — apart from high-density city centre developments — is under consideration, as is the possibility of ring-fencing 30% of all developments for first-time buyers.

Speaking on Thursday, Simon Harris has said that it was “never, ever” intended that investment funds could “swoop in” to bulk buy homes and keep them from first time buyers.

The Government was going to move “very swiftly” to ensure that what had happened in the housing estate in Maynooth could not happen again, there was “absolute clarity” across Government on the issue.

Private investment funds did have a role to play in helping housing supply, but situations like Maynooth would not be tolerated he told RTÉ radio’s Today with Claire Byrne show. There would always be a role for private investors, to say otherwise was not the truth, he said.

Actions would be taken to tighten the tax loopholess, he said. The Government wanted to level the playing field for first time buyers.

Bid to protect first-time buyers

The Taoiseach said the role of institutional investors competing with first-time buyers in completed housing estates is “unacceptable” and will be dealt with immediately.

Mr O’Brien and Paschal Donohoe, the finance minister, met yesterday in a bid to come up with a solution to protect first-time buyers.

'Enormous political consequences'

However, Fianna Fáil and Fine Gael moved to blame each other during private meetings of their parliamentary parties last night, and the Tánaiste was warned that his party would face “enormous political consequences” if vulture funds were not stopped from buying up family homes.

Opposition parties rounded on the Government after it was reported that Round Hill Capital had purchased the majority of the 174 houses in a new estate in Maynooth, Co Kildare.

Other bulk property sales to foreign investors have since been highlighted.

'Red carpet and sweetheart deals'

Sinn Féin president Mary-Lou McDonald accused the Government of allowing a “policy to incentivise and to support these private funds to buy up housing, right across the State”: 

Indeed, Fianna Fáil and Fine Gael have rolled out the red carpet for them with a range of sweetheart tax advantages. These funds pay no corporation tax, they pay no capital gains tax and minimal stamp duty.

"They also charge some of the highest rents in the State and they pay no tax on that,” Ms McDonald told the Dáil.

Social Democrats co-leader Catherine Murphy said these sales were “displacing individuals and families from purchasing a home”, and added:

There is no mystery as to why these funds are here outbidding ordinary buyers because they are being advantaged by the State. 

Labour senator Rebecca Moynihan promised to re-introduce a 2019 bill which had been brought forward by Mr O’Brien when in opposition to block cuckoo funds from buying up housing developments if the minister did not immediately act.

'Hard-working people locked out'

“People are rightly outraged about Round Hill Capital buying an entire housing estate in Kildare last week and how it bought another estate in Dublin 15, which it plans to rent out for €2,000 a month, in the midst of a housing crisis where hard-working people are effectively locked out of buying a home due to consistently poor, speculator-led housing policy,” she said. 

Mr O’Brien’s bill aimed to reserve 30% of estates for first-time buyers, and Ms Moynihan said she would publish this “word for word” if the minister did not act on his own legislation.

Dublin Bay South TD Jim O’Callaghan suggested limiting purchases to one home per buyer using the Affordable Housing Bill and not finance measures during a meeting of the Fianna Fáil parliamentary party last night.

'Great progress on social housing' 

Separately, Leo Varadkar told his TDs and senators that Fine Gael did not control the housing department, but that “it is our problem and we as a party need to help minister Darragh O’Brien in resolving it”.

Mr Varadkar told members that a lot of work and solutions were needed, but added that the Government was making great progress on social housing.

FG TD: It's a different world now

At least eight Fine Gael TDs and senators lined up to speak on the issue and made passionate contributions.

Kerry TD Brendan Griffin called for a reversal of property market incentives brought in by former finance minister Michael Noonan as he said it was a "different world" when the measures were introduced.

"If we sit late or at weekends, let's get legislation through to stop investment funds buying homes," he said.

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