Cabinet approves stamp duty increase on bulk-buying of houses

The measure is aimed at tackling so-called cuckoo funds buying up housing developments from first-time buyers.
Cabinet approves stamp duty increase on bulk-buying of houses

Local authorities will also be instructed from tomorrow not to allow bulk buying of new developments. Picture: Larry Cummins

Stamp duty on the bulk-buying of houses is set to increase from 1% to 10% under plans agreed by the cabinet this evening.

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

However, there will be an exception that will allow investment funds to bulk buy apartments without incurring the penalty.

Local authorities will also be instructed from tomorrow not to allow bulk buying of new developments.

They will be instructed to reserve between 0% and 50% of new planning permissions for owner-occupiers.

The measure will be voted on in the Dáil on Wednesday.

Finance Minister Paschal Donohoe says there will be financial disincentives to bulk buy.

He said it is designed to dissuade the buying up homes that are close to completion, or fully completed, thereby denying first-time buyers the chance of acquiring and owning their own home.

“Ensuring that people have access to homeownership in this country is a priority for Government," he said. 

"Building up supply, after a year when construction was forced to close for a significant period of time, is key. 

"Making sure people can access those homes, when they come on stream, is as important.”

There are two elements to the plans Housing Minister Darragh O’Brien will bring before his Cabinet colleagues.

At least 50% of homes in new housing estates will be ringfenced for first-time buyers.

In addition, a circular could be sent to local authorities preventing the sale of homes to cuckoo funds based on the density of developments.

It would mean funds would be unable to buy homes in suburban developments, where the number of homes per hectare is below a specified amount.

Additional reporting from PA

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