Pearse Doherty TD has called on the government to amend the tax designation of non resident property funds who hold vast amount of commercial property in Ireland and are exempt from tax on their income here.
Deputy Doherty made the call after revealing that one such fund, Cedar Real Estate Investments Plc, are paid €2.65 million per annum rent in relation to office space leased to the Central Bank and pay no tax on this income.
Deputy Doherty said successive governments have deliberately designed into our tax law a system that allows for foreign owned property funds to have no tax liability on the millions of rental income they receive here each year.
Cedar Real Estate Investments Plc is just one of these funds and it receives €2.65 million in tax free rent from the Central Bank of Ireland each year.
He said “The company is structured as an Alternative Investment Fund that is regulated by the Central Bank and would be classified as an investment undertaking according to Irish tax legislation. As Minister Noonan confirmed to me earlier this year Irish “tax legislation provides a tax exemption to the (investment) undertaking itself and to certain investors, for example investors not resident in the State.”
“Cedar Real Estate Investment Plc is ultimately wholly owned by Starwood Property Trust Inc, an American vulture fund, and as such its owners are not resident in the State. This structure and ownership model allow for it, through Irish tax legislation, to be exempt from tax in the State.
“At a time when our ordinary families and squeezed with a cost of living crisis and public services are under resourced, these vulture funds are paying little or no tax, and now we learn the State is paying millions to at least one of them. Even more infuriating is that it is the very body that is tasked with regulating these funds, the Central Bank, that is paying them. The State’s policy on vulture funds is going from scandal to farce
“I have been calling the government out for some time now on the wholesale tax avoidance of regulated funds involved in property. These are not tax loopholes that need to be closed, but instead a deliberate government policy ended. Minister Noonan needs to act urgently to amend the tax designation of non resident property funds in the interests of fairness and the public purse.”
