A December CSO study found that nearly one in 10 Irish people were gifted or inherited their home – but what effect does that have on the current housing crisis?
The study found that 8% of Irish people received a home as inheritance or a gift, while 21% received money as inheritance or a gift.
Some 70% of these gifts and inheritance came from parents.
One in five (21%) households expect to receive an inheritance or gift at some time in the future, with expectations highest among younger households and those with higher education.
Professor at the University of Limerick Stephen Kinsella told The Home Show that is how the “transmission of wealth” works.
“These are these are how privilege or assets - depending on your political bend - are transmitted,” he said. “Father to son, mother to daughter, parent to child.”
Prof Kinsella said this is not “necessarily a bad thing” - and he knows some would argue that they are not privileged as they have “worked all [their] life and built up a nesting habitat for [their] children”.
Despite that, Prof Kinsella said, “It's a fact that by of position in life, if you are able to advantage your children over other people's children - that is literally the definition of privilege.”
Prof Kinsella said inheritance is “absolutely related to housing” - but the data remains incomplete as to what extent.
He said the real influence on the housing market is the financial inheritance that 23% of Irish people have received.
“It is housing-related, in the fact that the ‘bank of mum and dad’ are helping to get their get their kids on the property ladder,” he said. “They are given that in order to actually access housing.”
He said whether this “locks” other people out of the market is a matter of “supply and demand” - but it puts some of the next generation ahead of others.
“It certainly is the case that children are being privileged at the expense of children who do not have a privilege, whose parents aren't that wealthy,” he said.
Prof Kinsella said it is unlikely that those who are unable to find a home and still live with their parents are unlikely to vote for Fine Gael or Fianna Fáil, who are against increases in property taxes.
However, he noted that several parties on the left also support keeping inheritance taxes low, such as Sinn Féin.
He said, with the likely exception of the Social Democrats, “every other party of the left has said they will either keep property tax the same or reduce them, which is which is frankly a little shocking”.
“The reality is if you believe that wealth should be distributed equally, then you believe that it should be taxed.”
You can listen back here: