Doherty concerned that Green REIT sale ‘means massive potential tax loss for the State’
Following the announcement of the sale of Green REIT, Sinn Féin Finance Spokesperson Pearse Doherty TD has expressed concern at the implications of the sale for the State’s tax returns. He said the Capital Gains Tax (CGT) exemption enjoyed by REITS must be reviewed as a matter of urgency given the announcement.
The Donegal TD said:
“Today’s move by Green REIT should set off alarm bells in the Department of Finance. The government’s refusal to apply CGT to gains made by REITS now looks like a hugely costly mistake. Any assets sold by the REIT will not be taxed on the increase in the value of commercial property which, according to reports, has doubled since 2013.
“With an asset value of €1.4bn, Green REIT alone could be avoiding hundreds of millions of euro in Capital Gains Tax on any sale.
“When I questioned Minister Donohue about this tax break, his answer has always been that REITS are here for the long run. That assumption has now proven to be false and tax policy must be changed to reflect this new development. The danger is that Green REIT is a forerunner of a broader sales strategy by investors who can now cash out tax free with the State missing out on hundreds of millions in potential tax.
“These commercial investors are the commercial equivalent of the vultures buying up house loans. Government and Department of Finance naivety has created a tax advantage for these funds based on a flawed assumption about their long term commitment. This same naivety informs their opposition to my ‘No Consent, No Sale’ Bill.”