Measures aimed at preventing institutional investors from bulk buying large numbers of residential homes in new housing estates could be implemented before the end of July, according to Government sources.

Minister for Finance Paschal Donohoe is examining potential tax changes while Minister for Housing Darragh O'Brien is looking at alterations to the planning system.

Officials are also working on proposals which may avoid the need for new legislation but would use other measures to prevent institutions from out-bidding first-time buyers.

"The Departments of Housing and Finance are working together to identify options to address the issue of bulk purchases of completed homes by institutional investors of all kinds," a spokesperson for the Department of Finance said.

"All options will be considered by the Government to identify the optimal method to address this issue," the spokesperson added.

Planning regulations are set to be reviewed with a view to ensuring that at least 30% of homes in new housing developments are set aside for first-time buyers.

A further 20% of homes of these developments would be social and affordable houses.

The indications from the Government are that an outright ban on investors buying homes in housing estates would raise constitutional difficulties.

There is a view that the biggest part of addressing the issue will centre on changes to current tax incentives.

Tánaiste Leo Varadkar told the Dáil that investment funds have a role to play, arguing that many high-density developments in Dublin city would not have been built had they not existed.

Speaking during Leaders' Questions, he said that without those developments, there would have been higher prices, rents, and homelessness figures.

Mr Varadkar was responding to Sinn Féin's Pearse Doherty who accused the Government of cheerleading and turbo-charging the activities of investment funds.

Mr Doherty asked what the Government would do to remove tax breaks and advantages for such funds.

Leo Varadkar said that 1% of the housing stock is owned by such funds.

He said the Government believes in home ownership and wants to make that a reality for young people.

The Tánaiste said that proposals are being developed to ensure that funds are not able to buy up entire housing estates.

However, he said that a balance must be achieved, and that the Government did not want unintended consequences.

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Social Democrats co-leader Róisín Shortall described the Government as a "circular firing squad" with Fianna Fáil TDs and Fine Gael TDs blaming each other for the housing crisis.

She accused Fianna Fáil of crashing the property market and Fine Gael of allowing "vulture funds loose on the carcass for a decade with tax incentives and fast track planning".

Mr Varadkar said that it was the ideology of "everyone in this house that people who work hard, who have a decent income or an average income, or even lower than average income, should be able to buy their own home".

He said that 65-70% of people in Ireland own their own home.

Ms Shortall said that investment funds have spent €4 billion on residential property since 2018 and pay very little tax on their investments.

However, Mr Varadkar said that to ban investment funds would "be a mistake".

Solidarity-People Before Profit TD Richard Boyd-Barrett described the behaviour of investment funds as a "rampage" by "bloodsuckers" through the property market.

He said the Tánaiste was acting like this is an "isolated mistake" that he will rectify, when all of it is "a result of a direct, deliberate and ideological" policy.

Mr Boyd-Barrett noted that former finance minister Michael Noonan had 65 meetings with "vulture funds", and invited them in to "commence the rampage".

He said that NAMA was told at that time to sell off "more than €40bn worth of land and property assets", and that now "cuckoo funds" had moved on to buying new estates as well, pricing "ordinary working people out of the market."

Speaking on RTÉ's Morning Ireland, Green Party leader Eamon Ryan said it is a legally complex issue and "may require legislation".

"You can't have one investor buy up an entire estate," he said.

However, Mr Ryan said he did not think it is a widespread problem estimating "no more than 100 or 200 houses" are being bought up by investor funds.

He said regulations can be set within planning permission to restrict the practice, adding there is still a need for investors with large-scale projects such as apartment blocks.

He said any decisions made will be part of a wider approach and the Affordable Housing Bill introduced yesterday is going to be "key".

Minister for Further and Higher Education Simon Harris said the Government wants to level the playing field for first-time buyers.

Speaking on RTÉ's Today with Claire Byrne, he said while private investments funds did increase housing supply, it was never intended that they would purchase entire housing estates.

He acknowledged that under the Fine Gael government several years ago, private investment had been encouraged to bring about housing supply.

"We needed to go through every avenue to increase supply. It was never the intention, nor can it be tolerated, that private investment funds would be swooping up housing estates."

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