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21/05/2021

Planning and tax crackdown on bulk buying of housing estates

Words: Roger Milne
Housing / Shutterstock_199093037

Irish ministers have announced planning and tax changes designed to crackdown on 'cuckoo funds' buying up housing estates.

Stamp duty on the purchase of 10 or more houses has risen to 10 per cent this week in a move which ministers insisted should act as a “significant disincentive” to bulk purchasing of new homes. In addition, all new houses in newly built estates must be made available for purchase by individuals for two years.

Meanwhile, housing and local government minister Darragh O’Brien is introducing a new “owner occupier guarantee” to enable local authorities to designate as many as 50 per cent of units in a new development for owner occupiers. He is also issuing a circular requiring local authorities and An Bord Pleanála to prohibit bulk buying of houses and duplexes.

The new planning rules will prohibit bulk buying - defined as more than one unit - for two years. If units remain after that time, they can be bulk purchased.

The affordable housing legislation will be amended in the coming weeks to designate between 30 and 50 per cent of units for owner occupiers, not just first-time buyers as had been intended. This will apply to duplexes and houses, and possibly to flats as well. However, it will not apply to build to rent units.

O’Brien said: “The minister for finance and I have worked closely to provide genuine solutions to the issue of institutional investors crowding buyers out of the market. We have been very clear that institutional investment has a role to play in supporting new supply, particularly in delivering high density apartments that would otherwise not be built.

“However, they should not be allowed to snap up already completed developments where there is a clear demand and no viability issues.

“From a planning perspective we will issue a departmental circular to local authorities to prohibit bulk buying of houses and duplexes. We will also introduce legislative amendments to enable local authorities, based on their own housing needs and demand assessment, to designate a specified number of houses and duplexes in a development for owner occupiers.

“Apartments, due to the fundamental viability issues, will be exempt from these provisions. This is in recognition of the fact that we need continued investment from international capital to ensure supply in core urban and high-density areas."

Image credit | Shutterstock

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