In Spain, rocketing rental rates have led to a proposal that could see non-European buyers face a 100% property tax if passed.
Other countries both in and outside of the EU have also come up with measures to discourage foreign buyers – so should Ireland follow suit?
Social Democrat TD for Dublin North West Rory Hearne told Moncrieff that this solution is probably too specific to Spain to copy – but that the Irish Government could take inspiration from this radical action.
“Spain does face a particular issue around the purchase of properties in tourist areas - and particularly the critique is buyers from the UK buying up properties,” he said.
“We saw indeed protests in places like the Canary Islands, there was protests in Barcelona around what they call the ‘touristification’ of Spanish cities.
“It’s a very similar thing [to the situation in Ireland] when you hear it – young people talking about being priced out, the huge skyrocketing rent – but I think that what it is is an example of a government taking quite radical action to address the housing crisis.”
A woman carrying a placard reading "stop tourist apartments" during a protest against mass tourism. Credit: Marcos del Mazo/Alamy Live News. 13th July, 2024.Deputy Hearne said that institutional funds and developments are a bigger problem in Ireland than individual foreign buyers.
“I think our problem has been that Fine Gael, Fianna Fáil, in terms of their economic model has been about bringing those funds in as the main provider of housing,” he said.
“Spain is talking about increasing tax – we have a real estate investment trust tax break that these funds can benefit from.
“We also have a whole litany of various mechanisms of tax minimisation and using our funds.
"So, the issue is that we’ve created a housing system that is really geared around those larger institutional funds.
“Even the private developers who want to build are also reliant on them for financing to get funding – because the Irish banks are not lending to homebuyers.”
According to Deputy Hearne, the Irish Government should focus their efforts on providing State housing and regulating Airbnb’s, particularly in Dublin city.
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Featured image: Housing market, © PA Wire/PA Images
