Opposition scaremongering over ‘cuckoo funds’, says Minister for Housing

Darragh O’Brien said an amendment to exempt ‘cuckoo funds’ from stamp duty increases is a temporary measure to protect the delivery of social homes.
Opposition scaremongering over ‘cuckoo funds’, says Minister for Housing

James Ward, PA

The Minister for Housing has accused the opposition of “scaremongering” over controversial legislative changes to allow “cuckoo funds” that lease properties back to the state to avoid stamp duty.

Darragh O’Brien said the measures would protect the delivery of social housing for 2,500 families by the end of the year.

Minister for Finance Paschal Donohoe will bring forward an amendment on Wednesday to exempt so-called cuckoo funds that lease properties back to local authorities from a 10 per cent stamp duty on bulk purchases of 10 or more properties.

But Mr O’Brien insisted it will be a time-limited measure to protect the delivery of social housing leases, and will be kept under review.

Minister for Housing Darragh O'Brien at the launch of the state's first cost rental homes
Minister for Housing Darragh O’Brien at the launch of the state’s first cost rental homes (Brian Lawless/PA)

He told reporters: “That amendment that Mr Donohoe is bringing forward this evening is to protect social housing delivery.

“There are some leases on the way, there are 2,500 families that are going to be housed in those homes.

“Are the opposition saying that we should not look after those people, that we should not house 2,500 families?”

He said the amendment would also protect families who are in systemic mortgage arrears.

He added: “If anyone in the opposition is saying honestly that they want us to scrap those leases that are in the pipeline, that are going to house between 2,500 and 3,000 people over the next 12 months, I don’t think that is something that I could actually stand over. Maybe they can.

“I think there’s been a little bit of scaremongering over this, quite frankly.”

Mr O'Brien said the Government has introduced “significant changes” to protect home-seekers from bulk buying of houses by large institutions, and that exemptions for cuckoo funds will be time limited.

“I’ve brought in some very significant changes on the planning side that nobody can buy more than one house in any development,” he said.

“There is an exemption at the minute for the delivery of social homes, which will be kept under review. It’s a small exemption that will be time limited.”

He insisted the amendment will go ahead, despite opposition calls for it to be scrapped.

Minister for Housing Darragh O'Brien with Fiona Cormican, director of new business at Cluid Housing
Minister for Housing Darragh O’Brien with Fiona Cormican, director of new business at Cluid Housing (Brian Lawless/PA)

“The amendment will be moved this evening, it will not incentivise bulk buying by cuckoo funds of social homes” he said.

“The concern is the risk to those homes that will be delivered over the coming months will be jeopardised if this amendment wasn’t put in place.”

The Minister conceded that the state will not own the properties at the end of the lease arrangements with cuckoo funds.

He said: “These current leases as it stands, no. That’s what I’m saying is, where leasing is used, we’re looking at mechanisms where the state will own the home at the end of it.

“But the main focus of the Government and of me as Housing Minister is to increase the housing stock.”

Mr O’Brien was speaking at the launch of a new cost-rental development in Balbriggan, north Co Dublin, where applications for two, three and four bedroom homes at 25 per cent below market rents were opened.

 

The development, in partnership with the not-for-profit charity Cluid, will be open to people who are not in receipt of any social housing supports, and whose income is below €53,000 per annum.

“It’s a long-term, secure tenancy, at a minimum of 25 per cent below rent market price, that the rents would just cover the cost of development and management of the units themselves” the Minister said.

He added: “Over the next few months we’ll have in place about 440 new cost rental tenancies and we’re going to build it from there.

“People who are above the social housing limits… are now going to have an option to be able to rent on a cost rental basis.

“No tenant here is going to be fearful that their landlord is going to sell next year, that their landlord is going to move a family member in. They’re secure, people can lay down their roots here.”

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