As it is revealed funds controlling assets of €20bn have only paid €20k in tax
Vulture funds have benefited from "the red carpet treatment" in Ireland, according to Irish mortgage Holders Organisation.
David Hall's comments on Newstalk Breakfast as the Sunday Business Post revealed that 24 such entities, controlling assets of close to €20 billion, have only paid €20,000 in tax. Data from the UCD School of Social Policy shows that the State has lost out on between €250 million and €350m annually in tax revenue since 2014.
Hall said the situation came as no surprise:
"If you allow vulture funds into Ireland with the red carpet treatment and let them avail of any loophole or gap that exists in any legislation, be it regulation, be it tax, you have to expect they're going to avail of that.
"It is a bit obscene to think that they won't avail of it, they will avail of it and have availed of it."
Although Hall did note ("to be fair to them") that vulture funds are yet to sell a huge amount of their portfolios as yet, meaning that there would be significantly more taxation once profits start to be made, he criticised the Government for how easy they have made it for them to operate relatively unchecked.
"When a state sells its own loans and its own citizens without protections to vulture funds, the floodgates open," he said.
"And the gates opened for many vulture funds to come to Ireland to take over loans, businesses, families, farms and family homes and investment properties.
"There were many people renting who've been thrown out, many people who will be thrown out when people move these funds on."
Comparing them to banks – which he also has misgivings about – Hall stated that people in mortgage arrears are four times more likely to be evicted by a vulture fund, citing the "waterfall of solutions" that banks provide to customers.
"These vulture funds don't have them," he said.
Hall also rejected the argument that vulture funds should be rewarded for taking a risk on toxic portfolios at the height of the recession:
"Didn't we take the biggest punt of all ourselves? Where did we create the €4 billion that went into the banks from?
"We created money when it looked like we needed to protect the banking institutions in this State and make no mistake about it, promissory notes were created. They were not money. They're magical money. Our money, our pain, our suffering that was now cast upon the entire state for the last seven years and many years to come.
"So when financial institutions and banks need to be protected, we can do so. We seem to have a problem when it comes to protecting families and [businesses].
"We have seen no action from these vulture funds yet. We have seen significant increase in repossession proceedings, in legal proceedings for judgments in the Four Courts and the courts throughout the country.
"We've actually not seen the net result because we've thankfully a very slow process involving repossessions in
"Many of the vulture funds took 18 months to get up-and-running; to establish an actual office and not a PO box, to hire in real staff. To now start affecting what their business plan is, which is to move on assets."
"So yes, they brought money into the country," he continued, "but let's see what else they bring into the country."
"When the State had a choice, it had 13,500 IBRC mortgage holders, loans they owned and controlled – and many of them performing – with NAMA and with many other products that we had available to us, what did we do?
"We sold them to vulture funds. Did we keep them to protect the housing crisis we're now stuck in the middle of?
No we didn't. We choose. This state chose to open the doors, to welcome vulture funds who have ice in their blood]– not normal blood."
Hall bemoaned the 35,000 people in arrears of more than two years and what will become of their properties if vultures swoop:
"If vulture funds take control of those loans – which they have with many of the loans already – they don't provide restructuring arrangements."
He is calling on a reinforcement of the "commitment to ensure that there is a minimum of two restructuring arrangement available to family homes prior to them being repossessed."
Hall also believes the Mortgage Arrears Resolution Process, currently a voluntary code, should be enshrined on a statutory basis, introducing a minimum number of solutions that must be offered to people prior to repossession to give them a "fighting chance".
"[With] the open arms syndrome that's been given," he concluded, "we're in for a very difficult number of years."