Saturday 22 July 2017

Shatter loses $500,000 as US property portfolio takes a dive

JUSTICE Minister Alan Shatter has suffered losses of almost half a million dollars on his American property investments due to the downturn in the US market.

Mr Shatter's property empire is the largest of any cabinet member, with only Health Minister James Reilly coming close.

He has a share in 15 properties in total, which are located in Dublin, London and Florida. They include apartments, two-storey red-brick houses, a duplex and an "ultra-luxury holiday villa" in Florida.

Mr Shatter, pictured left, has refused to reveal if he is claiming tax breaks for his property empire.

But according to a US real estate expert, Mr Shatter and his wife Carol have suffered considerable losses on the four properties they bought in Florida between 2004 and 2007 for a combined total of around $1.8m (€1.3m).

The losses have been estimated at up to $473,000 (€341,000) due to the downturn in the US property market.

Some of the other properties listed by Mr Shatter in his declaration of interests are owned in partnership with his wife Carol, while others are owned in partnership with Brian Gallagher, the managing director of the Gallagher Shatter law firm.

The villa on Marco Island in Florida is currently available for rent and is described by a US letting firm as "an opulent getaway for sophisticated couples" just five minutes from the beach.

"This is an ultra-luxury Florida villa with all of the upgrades, enjoying a southern exposure as you relax by the heated pool," it said.

But property prices in the area have fallen due to the US-wide real estate crash.

Florida based estate agent Garren Grup estimated the value of the luxury holiday villa would have dropped from the $723,500 (€522,600) Mr Shatter and his wife paid for it in 2004 to around $600,000-plus now.

He said the value of the couple's Verona Walk home would be down from $488,000 (€352,600) to $388,000 (€280,400) and the Verona Walk Townhome, down from $291,800 (€210,700) to $191,000 (€138,000).

Another of the properties is a two-bedroom apartment on Capistrano St, Naples, Florida, which is currently up for rent for $1,300 (€940) per month.

According to property records, Mr Shatter and his wife paid $350,000 (€252,700) for it in 2007 but it is now worth an estimated $200,000 (€144,500).

According to public records, Mr Shatter and his wife have a $220,000 (€158,900) mortgage on the Verona Walk Home alone. The best information available indicates that the other three properties in Florida are owned outright by them, and fully paid for.

Interests

In his declaration of interests, Mr Shatter lists three different sources of income on top of his salary as a minister. He receives income as a property investor/landlord; as a partner in Gallagher Shatter Solicitors; and as an author of several books.

His books include 'Family Law in the Republic of Ireland' and his novel 'Laura' about a child custody battle.

As a member of the cabinet, Mr Shatter will be responsible for making several key property related decisions.

He will have to approve the planned €100 household charge in the forthcoming Budget.

He will also shortly have to discuss the outcome of the review into the Section 23 property tax relief for people who bought investment properties.

The previous Government had promised to significantly restrict the scope of the tax break, but pulled back from doing so after a backlash from thousands of small property investors.

Mr Shatter and his investment partners may currently be availing of Section 23 tax relief from one of their Smithfield apartments to reduce their overall tax bill due on the rental profits they are generating from their other properties.

He bought 34 Block A Smithfield Market, Dublin 7, with his investment partners Brian Gallagher, Tim O'Sullivan and Aidan Reynolds and registered it in September 2008.

The Irish Independent submitted questions to Mr Shatter to ask him if he was availing of any tax breaks for the various properties he has a share in -- such as Section 23 relief. The minister was also asked how he managed all his various properties while also carrying out his other responsibilities.

But a spokesman for Mr Shatter did not respond to the questions directly.

"The minister has fully complied with the declaration of interest and has no further comment to make," the spokesman said.

According to Mr Shatter's declaration of interests, almost all of his 15 properties were jointly owned with another person. Nine of his 15 properties in which he has an ownership share are located in Dublin, while there are four in Florida and two in London.

According to information obtained from the Registry of Deeds, Gallagher Shatter managing director Brian Gallagher is a co-investor in four of the properties listed by Mr Shatter in his declaration of interest. One of these properties is 4 Upper Ely Place off St Stephen's Green where the Gallagher Shatter law firm is located.

Mr Shatter and his wife Carol are listed as the mortgage holders on two apartments in Bushy Park House in Terenure where apartments are currently being offered for rent for €1,350 per month. Over the years he sold a number of properties, including two houses in Whitechurch, Rathfarnham in his Dublin South constituency.

Details of Mr Shatter's property portfolio come following the revelation earlier this year that Health Minister James Reilly is receiving tax breaks for maintaining and opening his Laughton House stately home in Offaly to the public at certain times of the year.

The relief is given to help cover maintenance and restoration costs for significant buildings and gardens.

Irish Independent

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