Belfast, Ireland. (Getty)
Ireland will try to keep speculative investment firms from gobbling up its homes with a levy on bulk homebuying.
The government will impose a 10 percent tax on the purchase of 10 or more homes, according to Bloomberg. Ireland previously charged a 1 percent tax on bulk purchases of homes valued below $1.2 million and a 2 percent tax on homes valued above that.
The levy will apply to bulk purchases and cumulative acquisitions of 10 or more homes over a year. It does not apply to multifamily purchases.
Outrage is growing in the country over institutional investors squeezing out homebuyers and driving up prices by constraining supply. Institutional investors tend to covert homes into rentals, cutting out individuals from a primary means to build wealth.
A similar dynamic is playing out in the United States, where by some counts institutional investors have purchased 20 percent of all homes on the market. Institutional homebuying increased in popularity after the 2008 financial crisis left many people unwilling or unable to purchase homes.
Criticism of the practice in Ireland recently intensified after New York–based Round Hill Capital LLC purchased 80 percent of a housing development being built outside Dublin.
The levy “is designed to dissuade the practice whereby institutional investors buy up homes that are close to completion, or fully completed,” Finance Minister Paschal Donohoe said in a statement Tuesday. “Ensuring that people have access to home ownership in this country is a priority.”
[Bloomberg News] — Dennis Lynch
