117. Deputy Pearse Doherty asked the Tánaiste and Minister for Finance if he will outline the estimated cost to the State of vulture funds using structures like IREFs to avoid paying taxes on rental income. [68615/26]

Within a stone's throw of this Dáil, there are apartments owned by vulture funds. They charge over €3,000 for a two-bedroom apartment and the Government lets them off without paying a penny in tax on their rental income. Hundreds of thousands of euro are being fleeced from renters right across this city and elsewhere and the Minister of Finance does not ask these funds to pay a penny of corporation tax on their rental income. Is the Minister going to continue to adopt that position, which is against his officials' advice, that there should be a tax applied on these funds?

Until December 2016, income and gains arising on Irish real estate and distributed by certain Irish regulated funds to non-resident investors were outside the scope of Irish taxation. The Irish real estate fund, or IREF, regime was introduced in the Finance Act 2016 to address concerns that non-resident investors who were making investments in collective investment funds were not taxed on income and gains from Irish property. That was the starting point in relation to the regime the Deputy referenced.

The regime is predominantly a withholding tax regime that applies to an Irish fund where 25% or more of the value of the assets in a fund is derived from Irish property, such as land and buildings. Where the profits of the IREF are transferred to a non-resident investor, the IREF is generally required to apply IREF withholding tax at a rate of 20%. There are exemptions from IREF withholding tax for certain investors, for example, where an investor is a domestic, EU or EEA equivalent pension scheme, investment fund or life assurance company.

These categories of investors are generally associated with collective, widely held investment. Exemptions are in line with international taxing norms. They are necessary to prevent double taxation in the hands of the ultimate individual investor, and it is a wider policy objective to support financial security through long-term investments such as pensions and life assurance policies.

In order to prevent instances where exemptions from IREF withholding tax intended for collective investment are inappropriately used for personal investment, the IREF legislation contains complex anti-avoidance measures referred to as the personal portfolio IREF rules. The IREF regime also contains a suite of other anti-avoidance measures which protect the Exchequer from abuses. IREFs are not obliged to separately report the source of the profits on the IREF return as the value passing to the investor is the reference point for taxation under the tax regime. While the financial statements filed by IREFs contain high-level detail of the profits generated by IREFs, the profits of an IREF may arise from various activities including, for example, investment income, property development, property sales and rental income. Some IREFs also engage in non-property related activities. In the absence of a breakdown of the source of the profits, I am advised that Revenue is not in a position to provide an estimated cost for the Deputy. As the Deputy knows, I intend to carry out-----

Go raibh maith agat.

I will come back on this.

I am well aware of the IREF regime. The record will show it was me who campaigned to bring it in in 2016, just as it was me who had to force the Government to bring in the renters' tax credit and the mortgage interest relief that it continued to argue against but finally started to see sense on. This is the issue here. I have continued to campaign on this point. Just think about this: there are two-bedroom apartments a stone's throw from this building, from our national Parliament, and their owners are charging €3,000 rent and the Government allows them not to pay a penny in tax on that rental income. If that apartment was owned by the Chairperson or anybody else out there, they would have to pay 25% corporation tax on the rental income. If it was owned by a private company, they would have to pay tax on it. However, because it is vulture fund, an institutional investor, Fine Gael, Fianna Fáil and the Independents allow them not to pay a penny in tax on the eye-watering rents they are crippling young people and older people with in this city and beyond. It is scandalous. Worse is-----

Go raibh maith agat, a Theachta.

-----that the Government's officials have called for a tax to be introduced. It is there in black and white.

Tá an t-am caite.

There is no point in the Minister shaking his head. It is there in black and white. The officials have called for a tax to be introduced.

Go raibh maith agat. Glaoim ar an Tánaiste.

Will the Minister finally do the right thing?

Go raibh maith agat, a Theachta.

Will he tax the vulture funds on the rent they are collecting?

Let the record of the House show that it was a government led by my party in 2016 that introduced the legislation and legislated in relation to these issues. Just to be clear. I know the Deputy does this thing about Fianna Fáil and Fine Gael for the social media clips, but let the record of the House show that it was a Fine Gael Minister for Finance who actually legislated in relation to the IREF legislation. The reason I read out the lengthy answers at the start of this is because the Deputy distorts the situation and frames the debate in a certain way. The IREF was actually introduced, as the Deputy has said, and, in fairness, as he acknowledged and campaigned for, to address concerns that non-resident investors who were making investments and collective investment funds were not taxed on income and gains from Irish property. However, there is an issue - again, I do not think the Deputy should speak for my officials - in relation to double taxation. In the answer I have given this House I have very clearly outlined that. Therefore, we gave a commitment that we were going to carry out a consultation in relation to simplifying the IREF regime, something the Deputy says he looked for to be introduced in 2016. We intend to carry out a consultation to see what improvements and simplifications need to be made and I intend to publish that consultation this year.

Go raibh maith agat, a Thánaiste.

I have the documentation. The Minister's officials have recommended a tax at the level of the fund. They have recommended a rate of that tax. A tax of that nature could bring in a quarter of a billion euro. Does the Minister know what he could do with a quarter of a billion euro? He could do what Sinn Féin is proposing, that is, to double the renters' tax credit and put €2,000 into every renter's pocket across the State to help them as they are being fleeced by the landlords the Government protected over many years. Does he know what else he should do along with that? He should make sure he bans further rent increases. That is the type of policies we are putting forward. To go back to the core of this, there are people who are ripping their tenants off with these type of eye-watering rents of thousands of euro, and they are not paying a penny tax on that rent. If I am the landlord, I have to pay tax; if it is a company down the road, it has to pay tax; but if it is a vulture fund or institutional investor, they pay no corporation tax on that rental income. It should stop-----

Sin é, a Theachta. Tá an t-am caite.

The Department officials have recommended that the Minister bring in a tax.

An Tánaiste.

Will he actually-----

A Theachta Doherty, tá an t-am caite.

-----take a side that is not the side of the vulture fund in this case?

Again, it was Fine Gael and Fianna Fáil in government that introduced the renters' tax credit. It was Fine Gael and Fianna Fáil-----

Oh my God.

No, sorry. You get to say your thing and I do not say "Oh my God", so just sit there and allow me answer these-----

Who pushed you into it?

Just to be very clear-----

Who forced you into it?

There is one speaker.

I just do not understand. If the Deputy is so effective at his job-----

I am-----

-----I do not understand why he is sitting over there as the longest-serving Opposition spokesperson on finance in the history of the European Union. Maybe reflect on that for a moment. We introduced the renters' tax-----

Still larger than Fine Gael for the past two elections.

There is only one speaker and the Tánaiste has the floor.

We are here and you are there-----

Still. Good luck to you.

-----and that is for a reason called democracy.

We introduced the renters' tax credit. We increased the renters' tax credit. The programme for Government commits to further increasing the renters' tax credit. It is now worth more than €300 million to renters in this country. We also introduced rent pressure zones, including providing protections to renters in Donegal, that did not exist until we brought in those rent pressure zones. There are specific issues - and this does not suit the Deputy's quick social media clips - in relation to double taxation. We want investment to come into this country, we want more homes to be built, we want more apartments to be built and we want more rental properties for people. There are specific issues in relation to double taxation which we need to work our way through.

Go raibh maith agat.

That is why we will publish this year a consultation on a simplified IREF regime.

More consultation. Why not act?

Glaoim ar an Teachta Ged Nash-----

Why not act? It is because you have are in bed with the vultures. That is the reality.

That is a slur.

It is the truth.

-----without interruption.