To ask the Minister for Finance his plans to review taxation of REITS, IREFS and section 110 companies; and if he will make a statement on the matter.
REPLY



The Government monitors the actions of institutional investors in the Irish property market and has taken action when abuses have been identified. Action was taken in 2016 to address concerns about the use of section 110 and fund vehicles by foreign investors to take profits derived from Irish real estate without paying Irish tax. This resulted in the introduction of the IREF (Irish Real Estate Fund) framework in 2016. 

The Deputy will be aware that a number of amendments are being made to the taxation of REITs, IREFs and section 110 companies in Finance Bill 2019. A number of anti-avoidance measures are being introduced to the IREF regime to ensure appropriate levels of tax are paid by investors in Irish property, by preventing the use of excessive debt and other payments to reduce distributable profits and preventing the avoidance of tax on gains on the redemption of IREF units. In addition, the IREF return filing requirement is being placed on a mandatory annual footing and the information which Revenue can request has been increased to facilitate ongoing monitoring of the sector. 

Several amendments are being made to the taxation of REITs in Finance Bill 2019, to ensure the regime operates as intended.  The obligation to deduct REIT Dividend Withholding Tax has been extended to include distributions of the proceeds of capital disposals and new measures have been introduced to require the proceeds of property disposals to be re-invested in property assets or distributed within a set period. The deemed disposal provisions upon cessation of REIT status have been restricted to REITs that have been in operation for at least 15 years, in line with the regime's stated objective of encouraging long-term, stable investment in rental property. 

Section 110 sets out a regime for the taxation of special purpose companies set up to securitise assets. A number of amendments are being made to the section 110 regime in Finance Bill 2019 to strengthen the significant restrictions to the deductions which a section 110 company can claim for payment of profit participating notes to a specified person. The amendments also place the section’s main purpose test on an objective basis, which will enable Revenue to more effectively challenge abuse of the legislation. 

As part of the 2018 Finance Act process I committed to produce a report on REITs, IREFs and section 110 companies as they invest in the Irish property market. This report was prepared by my officials and presented to the Tax Strategy Group in July. 

The importance of institutional investment in the supply of both commercial and residential property must be recognised. Rebuilding Ireland identified the encouragement of the build-to-rent sector as a key factor in improving the rental sector and acknowledged that institutional investors have the potential to provide significant investment in such projects. Increasing the supply of urban apartments is essential if we are to reach our National Planning Framework targets and reduce price pressures for tenants. 

However, where such investment brings profit, a fair share of tax must be paid.  Therefore, as I stated in my Budget speech, scrutiny of activities in this sector will continue and further corrective action will be taken if necessary.

QUESTION

To ask the Minister for Housing; Planning and Local Government the first and full-cost of replacing revenue from residential construction development levies with funding to local authorities; and if he will make a statement on the matter.
REPLY



With regard to development contributions, my role as Minister is generally to provide the necessary legislative and policy framework governing development contribution schemes operated by planning authorities. Under sections 48 and 49 of the Planning and Development Act 2000, as amended, planning authorities may levy development contributions. The basis for the determination of a development contribution is set out in a development contribution scheme adopted by the elected members as a reserved function.

Income from development contributions must be ring-fenced to pay for public infrastructure and facilities. Appendix 5 of the amalgamated Annual Financial Statements of local authorities show a total income of €237.4m for Development Contributions for the financial year ending 31/12/2018, which is the most recent year for which audited figures are available.

The Government introduced a special two-year time-limited residential development contribution rebate scheme in 2015 in respect of the functional areas of the four Dublin local authorities and the metropolitan area of Cork only. Rebate was paid in respect of 875  new homes under the scheme at a cost of €7.322m.

The full cost of applying a national waiver on residential development contribution levies is not available from local authorities AFS as the figures do not differentiate between levies collected from residential and non-residential development.

To ask the Minister for Housing; Planning and Local Government the average Dublin and national sales price by unit type of an affordable loan under the affordable housing scheme.
REPLY



In line with the commitments in Rebuilding Ireland, this Government has allocated €310 million under the Serviced Sites Fund (SSF) over the period 2019 to 2021 to provide infrastructure to support the delivery of more affordable homes on local authority lands.  A maximum SSF funding amount of €50,000 is available per home. This sum comprises  €44,500 (or 89%) Exchequer contribution and a €5,500 (or 11%) local authority contribution.  On this basis, at least 6,200 more affordable homes, to buy or rent, can be facilitated by this measure alone.  This funding is being made available in areas where local authorities have demonstrated a requirement for more affordable housing and the viability to deliver such housing from their sites.

 

To date, I have allocated SSF funding of €127 million in support of 35 projects in 14 local authority areas.  This will provide for infrastructure works that will support the delivery of almost 3,200 affordable homes.  The timing of delivery for these projects is contingent upon the completion of planning and procurement in the first instance, and local authorities are working to achieve delivery, as quickly as possible. I anticipate that a further call for proposals under the SSF will issue to local authorities in 2020.

 

Part 5 of the Housing (Miscellaneous Provisions) Act 2009 was commenced in June 2018 provides a statutory basis for the delivery of affordable housing for purchase.  Regulations in respect of the making of a Scheme of Priority were signed on 12 March 2019, and these were issued to local authorities on 22 March 2019.  The purpose of a Scheme of Priority is to set out the affordable purchase arrangements at local authority level.  This includes the methodology that will be applied to determine the order of priority to be accorded to eligible households where the demand for such affordable homes exceeds the number available. Further regulations will be put in place over the coming months regarding eligibility and other matters. When the operational procedures for the programme are finalised, and before affordable homes are made available for purchase under the scheme, a programme of communication will be undertaken by my Department and local authorities. 

 

The selling price of homes that will be made available for purchase under the affordable dwelling purchase arrangements will be influenced by a number of factors which will vary significantly from scheme to scheme.  This includes the overall development cost of each particular scheme (taking into account inputs such as the local authority land value and Serviced Sites Fund), the housing type/tenure mix involved and the local housing market. 

 

Given the majority of the schemes approved for funding under the SSF are at the planning and design stage, the final sales prices have not been fully determined.  Sales prices will likely be established after public procurement competitions have been completed for each development and can provide greater certainty regarding the overall cost of provision in each case.  

 

Notwithstanding this, it is possible to provide indicative details of prices in locations where projects are at a more advanced stage.  For example Cork City Council have commenced construction at Boherboy Road of 116 new energy efficient, 2 and 3 bedroomed affordable homes which are expected to come up for sale at prices ranging from €198,000 to €223,000.  Another SSF project by Dublin City Council intends to deliver 165 affordable homes in O'Devaney Gardens. These homes will comprise a mix of 1,2, and 3 bedroom houses and apartments with expected prices ranging from €240,000 and not exceeding €310,000.

 

Another key affordability measure the Rebuilding Ireland Home Loan, enables credit worthy first time buyers to access sustainable mortgage lending to purchase new or second-hand properties in a suitable price range. The low rate of fixed interest associated with the Rebuilding Ireland Home Loan provides first time buyers with access to mortgage finance that they may not otherwise have been able to afford at a higher interest rate. Full details of the loan's eligibility criteria and other information is available from the dedicated Rebuilding Ireland Home Loan website, http://rebuildingirelandhomeloan.ie/   In addition the Help to Buy Scheme provides financial support to first time buyers in securing their own home.

 

The significant discounts, which will be provided on the affordable purchase homes and other supporting measures, will mean that homes will be available to very many individuals and families on more moderate incomes who would otherwise not be in a position to own their home.

 

To ask the Minister for Housing; Planning and Local Government when final guidance on cost-effective analysis cases will be issued to local authorities; and if he will make a statement on the matter.
REPLY



My Department provides advice to local authorities, on an ongoing basis, to support them in delivering social housing projects, including undertaking cost effectiveness analyses in respect of high value projects. It should be noted that local authorities have primary responsibility for evaluating, planning and managing their public investment projects under the Public Spending Code.

Against this background, my Department has recently provided final draft guidance documents to local authorities to support them in undertaking cost effectiveness analyses.  The final draft documents provided include 'Draft Sectoral Guidance for Social Housing Appraisals' and 'Worked Examples of Preliminary Appraisal and Detailed Appraisals'.

Final observations on the draft documents have been sought from the local authorities and adjustments may be made based on that feedback, and also to take account of the review of the Public Spending Code, which was considered by Government yesterday.  However, in the meantime, local authorities can continue to use the draft guidance for any of their projects that require a cost effectiveness analysis.

It is intended that the documentation will be finalised shortly and the final Sectoral Guidance for Social Housing Appraisal will be issued in early 2020.

To ask the Minister for Housing; Planning and Local Government the first and full-year costs of increasing HAP, RAS and social housing current expenditure programme payments by 5%,10%, 15%, 20% and 25%, respectively.
REPLY



All three of the current expenditure funded schemes – the Rental Accommodation Scheme (RAS), the Housing Assistance Payment (HAP) and the Social Housing Current Expenditure Programme (SHCEP) - are critical components of the accelerated delivery of social housing envisaged under Rebuilding Ireland: Action Plan for Housing and Homelessness.

The annual cost of the three schemes to the exchequer is made up of the continuing cost of supporting the tenancies and contracts in place at the end of the previous year, and the additional cost of the new tenancies and contracts supported over the course of the year to which the allocation relates. The cost of the schemes in future years is therefore dependent on the number of new social housing homes and tenancies falling to be funded within each of the schemes and the rental or lease payments involved.

The table below sets out the costs of increasing the 2020 HAP, RAS and SCHEP budgetary allocation by 5%,10%, 15%, 20% and 25%, respectively.

 

2020   Budget
€m
5%   Increase
€m
10% Increase   €m
15%   Increase €m
20%   Increase €m
25%   Increase €m

HAP
 502,729
 527,865
 553,002
 578,138
 603,275
 628,411

RAS
 133,000
 139,650
 146,300
152,950
159,600
166,250

SHCEP
 190,886
 200,430
 209,975
 219,519
 229,063
 238,608

 Total
 826,615
 867,945
 909,277
 950,607
 991,938
 1,033,269

 

QUESTION

To ask the Minister for Housing; Planning and Local Government the first and full-year cost above current capital plan expenditure allocations of achieving 10,000,11,000,12,000,13,000,14,000 and 15,000 intervals of new build social housing units, respectively.
REPLY



The National Development Plan 2018-2027 provides for the delivery of 112,000 new social homes over the next decade, supported by capital funding of €11.6 billion.  These 112,000 new social homes will be delivered through a range of mechanisms, including build, acquisitions and long term leasing. 

 

It should be noted that the delivery of the 112,000 new social housing homes over the next decade does not include housing supports that will be provided to households under the Housing Assistance Payment (HAP) Scheme or the Rental Accommodation Scheme (RAS).  HAP and RAS will continue to offer additional flexible housing solutions across the period to 2021 ensuring that, over the lifetime of the Rebuilding Ireland Action Plan, over 138,000 households will have their housing need met.

 

The specific capital allocations underpinning the various social housing delivery programmes, including new build programmes, for each year out to 2027 will be determined in the context of the annual estimates process.  Without knowing the specific blend of additional delivery proposed, it would be not be possible to provide the estimated costs requested by the Deputy. 

QUESTION

To ask the Minister for Housing; Planning and Local Government the average Dublin and national sales price by unit type of an affordable loan under the affordable housing scheme.
REPLY



In line with the commitments in Rebuilding Ireland, this Government has allocated €310 million under the Serviced Sites Fund (SSF) over the period 2019 to 2021 to provide infrastructure to support the delivery of more affordable homes on local authority lands.  A maximum SSF funding amount of €50,000 is available per home. This sum comprises  €44,500 (or 89%) Exchequer contribution and a €5,500 (or 11%) local authority contribution.  On this basis, at least 6,200 more affordable homes, to buy or rent, can be facilitated by this measure alone.  This funding is being made available in areas where local authorities have demonstrated a requirement for more affordable housing and the viability to deliver such housing from their sites.

 

To date, I have allocated SSF funding of €127 million in support of 35 projects in 14 local authority areas.  This will provide for infrastructure works that will support the delivery of almost 3,200 affordable homes.  The timing of delivery for these projects is contingent upon the completion of planning and procurement in the first instance, and local authorities are working to achieve delivery, as quickly as possible. I anticipate that a further call for proposals under the SSF will issue to local authorities in 2020.

 

Part 5 of the Housing (Miscellaneous Provisions) Act 2009 was commenced in June 2018 provides a statutory basis for the delivery of affordable housing for purchase.  Regulations in respect of the making of a Scheme of Priority were signed on 12 March 2019, and these were issued to local authorities on 22 March 2019.  The purpose of a Scheme of Priority is to set out the affordable purchase arrangements at local authority level.  This includes the methodology that will be applied to determine the order of priority to be accorded to eligible households where the demand for such affordable homes exceeds the number available. Further regulations will be put in place over the coming months regarding eligibility and other matters. When the operational procedures for the programme are finalised, and before affordable homes are made available for purchase under the scheme, a programme of communication will be undertaken by my Department and local authorities. 

 

The selling price of homes that will be made available for purchase under the affordable dwelling purchase arrangements will be influenced by a number of factors which will vary significantly from scheme to scheme.  This includes the overall development cost of each particular scheme (taking into account inputs such as the local authority land value and Serviced Sites Fund), the housing type/tenure mix involved and the local housing market. 

 

Given the majority of the schemes approved for funding under the SSF are at the planning and design stage, the final sales prices have not been fully determined.  Sales prices will likely be established after public procurement competitions have been completed for each development and can provide greater certainty regarding the overall cost of provision in each case.  

 

Notwithstanding this, it is possible to provide indicative details of prices in locations where projects are at a more advanced stage.  For example Cork City Council have commenced construction at Boherboy Road of 116 new energy efficient, 2 and 3 bedroomed affordable homes which are expected to come up for sale at prices ranging from €198,000 to €223,000.  Another SSF project by Dublin City Council intends to deliver 165 affordable homes in O'Devaney Gardens. These homes will comprise a mix of 1,2, and 3 bedroom houses and apartments with expected prices ranging from €240,000 and not exceeding €310,000.

 

Another key affordability measure the Rebuilding Ireland Home Loan, enables credit worthy first time buyers to access sustainable mortgage lending to purchase new or second-hand properties in a suitable price range. The low rate of fixed interest associated with the Rebuilding Ireland Home Loan provides first time buyers with access to mortgage finance that they may not otherwise have been able to afford at a higher interest rate. Full details of the loan's eligibility criteria and other information is available from the dedicated Rebuilding Ireland Home Loan website, http://rebuildingirelandhomeloan.ie/   In addition the Help to Buy Scheme provides financial support to first time buyers in securing their own home.

 

The significant discounts, which will be provided on the affordable purchase homes and other supporting measures, will mean that homes will be available to very many individuals and families on more moderate incomes who would otherwise not be in a position to own their home.

 

 

 

QUESTION

To ask the Minister for Housing; Planning and Local Government the number of staff employed by the Housing Finance Agency; and the staffing costs per annum.
REPLY



The Housing Finance Agency (HFA) plc is a non-commercial semi-State company under the aegis of the Minister for Housing, Planning, and Local Government, limited by shares under the terms of the Housing Finance Agency Act 1981.

The principal objectives of the company are to advance funds to local authorities and approved housing bodies to be used by them for any purpose authorised under the Housing Acts 1966 to 2016, and to borrow or raise funds for these purposes.

The agency currently has a staff of 14 whole time equivalents (WTEs). Total salaries in 2018 amounted to €640,000 (for 13 WTEs).

To ask the Minister for Housing; Planning and Local Government the potential impact of a €650 million increase in the Housing Finance Agency borrowing for the Rebuilding Ireland home loan scheme on the general Government debt, general Government balance and calculations of available financial resource fiscal space under EU and national rules; and if he will make a statement on the matter.
REPLY



Initially, funding of up to €200 million for the Rebuilding Ireland Home Loan was raised by the Housing Finance Agency (HFA) from a variety of sources, on a fixed rate basis for periods out to thirty years maturity.  Based on the pricing achieved, local authorities could offer a first tranche of fixed-rate annuity finance to eligible borrowers at rates of 2.0% and 2.25% per annum, for twenty five and thirty years respectively, up to an aggregate maximum of €200 million.  Subsequently, owing to the success of the scheme, sanction was given for further RIHL lending of €363 million.  This brings total available funding for the scheme to €563 million for the period 2018-2019.

 

This funding is not allocated to individual local authorities but rather will be drawn down by local authorities from the HFA to match their lending under the Rebuilding Ireland Home Loan. Local authority borrowing from the HFA that is loaned by local authorities to individuals, as long as it is provided on a commercial basis, is classified as a financial transaction, and so does not count as General Government Expenditure nor impact on the general government balance.

 

The HFA is an on-balance sheet entity and therefore its debt to the non-government sector counts towards general government debt. The effect on the general government debt is determined by the extent to which borrowing by the HFA to fund the scheme requires additional borrowing by the NTMA.

Queries regarding the effect of the RIHL on available fiscal space under EU and national rules is a matter for my colleague the Minister of Finance.

 

QUESTION
To ask the Minister for Housing; Planning and Local Government the status of the Housing Delivery Office; the relationship of the office with the Land Development Agency; and if he will make a statement on the matter.
- Darragh O'Brien T.D.

For ORAL answer on Wednesday, 11 December, 2019.

* To ask the Minister for Housing; Planning and Local Government the status of the Housing Delivery Office; the relationship of the office with the Land Development Agency; and if he will make a statement on the matter.
- Darragh O'Brien T.D.

For ORAL answer on Wednesday, 11 December, 2019.
REPLY

A dedicated Housing Delivery Office (HDO) was established within my Department to support the accelerated delivery of housing across the social and private sectors, in an integrated and timely manner.  
Working with the broader Housing and Planning Divisions in the Department, other key agencies, local authorities and the construction sector, the HDO has supported the roll-out of complex projects, including identifying and resolving barriers to delivery, and monitors progress across key sites as they progress. The HDO has worked with all key stakeholders involved in the delivery of housing, including from key disciplines such as architecture, planning, engineering and building control, project and construction management, quantity surveying, capital programme delivery and administration.  
In the context of the increased delivery ambition in terms of social and affordable homes, my Department has been working with the City and County Management Association (CCMA) in terms of reviewing the most effective future operating platform for the HDO. While the Department has a pivotal role in terms of policy, legislation and the finance to enable local authorities deliver, the day to day delivery is a matter for local government and, with increased targets and delivery accelerating, the clear demand for an enhanced support structure is recognised.
The CCMA recently submitted a proposal to my Department setting out the benefits that a revamped and reconfigured HDO more closely situated within the local government sector could have in terms of supporting increased delivery. This approach could have significant benefits in terms of addressing a number of delivery challenges including:
- Leasing;
- Social Housing Specification and Design;
- Procurement/ Contract Management/ Project Management; and
- Utilising Landbanks/ Achieving Mixed Tenure.
Given the similarities between these objectives and other established Project Management Offices, I have agreed with the CCMA that the HDO will therefore transition to the Local Government Management Agency (LGMA). The CCMA and LGMA are working to a Quarter 1 2020 initiation of the new office.  We are fully agreed that the new unit will work closely, not only with my Department, but also with other key sectoral stakeholders, including the Land Development Agency and the Housing Agency, to align activity, share knowledge and expertise and drive efficiencies in the housing delivery process.