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Taoiseach defends housing policy arrangement with cuckoo funds

Under the plan, the Government will spend almost one billion euro to lease 2,400 homes from institutional funds.

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Taoiseach Micheal Martin has defended the decision to lease houses from institutional funds in a 25 year leasing arrangement.Picture is screenshot of Oireachtas TV.

Taoiseach Micheal Martin has defended the decision to lease houses from institutional funds in a 25 year leasing arrangement.Picture is screenshot of Oireachtas TV.

Taoiseach Micheal Martin has defended the decision to lease houses from institutional funds in a 25 year leasing arrangement.Picture is screenshot of Oireachtas TV.

The Taoiseach has defended a Government decision to spend almost one billion euro to lease 2,400 homes from institutional funds, saying it is in a “transitional phase”.

Micheal Martin admitted that, while the leasing arrangement was not an ideal model, the Government could not “turn off the tap” on providing social homes through the scheme.

It was reported that it will cost up to one billion euro over a 25-year term to lease the homes from the funds, however the state will not own the properties at the end.

Last week, the Government was criticised over controversial legislative changes to allow “cuckoo funds” that lease properties back to the state to avoid stamp duty.

An amendment to legislation, passed last week, will exempt so-called cuckoo funds that lease properties back to local authorities from a 10% stamp duty on bulk purchases of 10 or more properties.

Mr Martin told the Dail on Tuesday that his “overwhelming focus” will be on building social houses.

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“We’re in transition now, and we just simply cannot turn off the tap where social houses can be provided through this leasing arrangement in the short term, to provide for 2,400 families who can avail of social housing through this model,” the Fianna Fail leader said.

“It’s not the ideal model at all.

“That is why you would see the focus coming off that but it’s not the main focus at the moment, and never has been.”

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It will cost the Government one billion euro to lease 2,400 properties from institutional funds over a 25 year period.

It will cost the Government one billion euro to lease 2,400 properties from institutional funds over a 25 year period.

PA

It will cost the Government one billion euro to lease 2,400 properties from institutional funds over a 25 year period.

Sinn Fein president Mary Lou McDonald said the state will not own the properties, despite paying in excess of 375,000 euros for each home.

“We know that these leasing arrangements are even more expensive in the city of Dublin, running at almost half a million euros for each unit,” Ms McDonald added.

“Little wonder that the funds industry is delighted with your latest move, which continues apace, despite you telling the Dail in May that this practice should cease.

“On the flip side of the coin, the latest figures available from the Department of Housing showed that the cost of building homes, of building social and affordable housing is much less than these expensive leasing arrangements, on average coming in at about 240,000 euros.”

You are not interested in solutions around housing, you're interested in exploiting the housing problem.Micheal Martin

She called for a doubling of capital investment in social and affordable housing.

Mr Martin claimed that Ms McDonald’s portrayal of the Government’s housing policy is “wrong and flawed”.

He also accused Sinn Fein of opposing shovel-ready housing projects.

“I don’t get any sincerity in your protestations about housing.

“I don’t get any substance either,” he added.

“I get a sense, deputy, that your objective and mission is to exploit the housing crisis for electoral gain only.

“You are not interested in solutions around housing, you’re interested in exploiting the housing problem.”


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