Varadkar: Outright ban on investment funds buying homes a 'mistake'

Varadkar: Outright ban on investment funds buying homes a 'mistake'

An outright ban on investment funds buying complete housing estates would be “wrong” and a “mistake”, Tánaiste Leo Varadkar has told the Dáil.

The Fine Gael leader said it would be “ideologically extreme” to ban investment on certain types of housing, adding investment funds have a “role to play” in the property market.

His comments followed controversy earlier this week over a housing development in Maynooth, Co Kildare, where 135 of 170 houses at the Mullen Park estate were purchased by two investment funds, to be put up for rent.

Opposition parties have warned first-time buyers are being priced out of the market, because they cannot compete financially with such funds.

Mr Varadkar voiced his hesitancy regarding the proposal to limit investment funds from buying up entire housing estates, saying the Government needs "a little bit of time to come up with a workable solution" which would not have "unintended consequences".

He added that some housing developments in Dublin city, mainly apartment blocks, would not have been built if it were not for investment funds.

The Government is also consulting the Attorney General to ascertain whether the proposal would amount to a breach of constitutional rights for property, according to The Irish Times.

Minister for Housing Darragh O'Brien and Minister for Finance Paschal Donohoe are expected to present options to the Government next week.

While in Opposition in 2019, Mr O'Brien proposed a Bill to limit the buying power of investment funds, stipulating 30 per cent of housing developments would be reserved for first-time buyers, while 10 per cent of new developments would also be designated as affordable and social housing respectively.

Speaking to Newstalk's Pat Kenny show, Mr O'Brien said the Department of Finance would have to bring forward options to address the tax paid by investment funds, which he said would be the long term resolution of the matter.

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