Stephen Donnelly, Independent TD for Wicklow and East Carlow has raised serious concerns that changes announced in this month’s Finance Bill will lead to large domestic and foreign commercial landlords operating completely tax free in Ireland.
This would lead to higher rents for families and businesses, bigger mortgages, less public money for investment in services & infrastructure and an even bigger commercial property bubble in Dublin.
It would also lead to a two-tier system in which normal Irish businesses would be paying full taxes, alongside huge foreign funds acting as landlords and paying no taxes on their profits.
Speaking today, Deputy Donnelly commented:
‘Businesses all over Dublin are coming under enormous pressure because of the spiralling costs of rent. Dublin now has the second highest commercial rents in the eurozone. In fact, in all of Europe, the only cities that now have higher rents than Dublin are London, Geneva, Paris and Zurich. And not only are rents high, they’re rising rapidly. In the last 2– 3 years alone they’ve nearly doubled.
‘One of the reasons for this is tax breaks. In the last Dáil, the government created two tax deferral mechanisms for property investors – known as REITs and ICAVs. This has led to big foreign landlords pouring money into the country, to buy up commercial and residential property.
‘We were told that these generous tax breaks were going to be shut down in the Finance Bill. Minister Noonan stated clearly that profits generated from economic activity in Ireland would be taxed properly. Not only has the Finance Bill not done this, it has instead created new tax rules that make commercial property investment in Ireland completely tax free. No other European country does this.
‘The government is choosing to make commercial property completely tax free for landlords, in the middle of an already growing property bubble. I am calling on Minister Noonan to ensure that the bill as it is currently written is not enacted, and to ensure that commercial property is taxed in line with other businesses in Ireland.’