Discussion:Property over a million but low income..!?

R

Rogerio

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Hi...can anyone advise on the situation where a widow is now sole owner of a property worth about one million, possibly slightly more - lives in it alone - owns no other properties and is earning about 25k per year, with very little savings.

I have read lots of articles in print and online but they all assume that individuals in expensive properties have lots of disposable income. Properties over the million threshold will have a tax of minimum 1.7 grand... that's a hell of alot for someone earning the above salary. Is she supposed to sell her house which has been a family home for past 20+ years or go to bank to seek a loan in order to pay the tax? It's ridiculous.

Thanks for any replies..
 
It's a tax based on the value of a home. So regardless of any assumption of income why shouldnt she have to pay it? It's back to the argument of city dwellers paying more than country dwellers for the property tax which are equal in size.

She would just have to make provision for it like anyone else would - like people in similar positions with any property. Assuming she has no mortgage then she should have no issue paying it.

Sorry if it seems a bit harsh. But that's life.........and taxes!
 
You're absolutely right Rogerio. Morally.

And so is peteb. Legally. Though I'm unsure how peteb says that an impoverished widow should have no issue paying two grand extra p.a. !
 
She might qualify for a full or partial deferral:

http://www.*****************.com/deferral-of-the-property-tax.html

The tax would have to be paid of the house is sold or left as an inheritance. In effect, it's a kind of equity withdrawal to pay the property tax. It incurs annual interest on the deferral amount.
 
oldnick said:
You're absolutely right Rogerio. Morally.

And so is peteb. Legally. Though I'm unsure how peteb says that an impoverished widow should have no issue paying two grand extra p.a. !
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I think that if she's one person living in a house that's worth a million, even in the current market its going to be a sizeable property. She can obviously afford to maintain it so whats the problem? Given its going to be at least 5 bedrooms if she has income issues rent out a room. Or trade down if a property that size isn't required.

If i can't afford to tax my car i take it off the road or I get a smaller one I can't afford. Similar principal.
 
PeteB.

Old widow spending her last years in the home that she's spent over 20 years in. Memories and all that sentimental rubbish, what a load of tosh eh?
Let's slap a new tax on her and if she can't afford it then she just has to leave her home and go elsewhere. It's just the same as changing a car.
 
oldnick said:
Old widow spending her last years in the home that she's spent over 20 years in.
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Didn't see the word "Old" mentioned anywhere in the OP, in fact it was mentioned that she earned €25K per year so i assume probably not a pensioner. If she cant afford payments, I would advise downsizing or getting a partial deferral and let the balance of LPT accumulate to property.
Any chance that the LPT itself could be regarded as
"An unexpected and unavoidable significant financial expense" as set out in condition 7 below and thus entitle her to possible full deferral?



Condition 7:
A person who suffers both an unexpected and unavoidable significant financial loss or
expense, as a result of which he or she is unable to pay the LPT without causing excessive
financial hardship, may apply for full or partial deferral. Claims for this type of deferral will
require full disclosure of the person’s financial circumstances and any other information
required by Revenue in accordance with the detailed guidelines published at
​
​

​

. Following an examination of the information provided, Revenue will
determine whether deferral should be granted.
To claim deferral under any of these conditions enter the relevant condition number on your Return. You
must also submit all supporting documentation, as required by the relevant Revenue guidelines.​

​
 
cashier said:
A million is a lot for a house these days. I think if the house had been in the family for generations there would definitely be an emotional attachment and it would be much harder to part with, however, if she has only has been living there 20 odd years or more I don't think that level of attachment would be built up. Unless she can get help from family members or defer the payments she won't have much choice but to sell it.
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Where are all these million euro houses that are in families for generations?

The tax can be deferred, or the people who will eventually inherit can help with the tax?

It must be quite difficult to live on 25K in a large house, what with maintenance and heating etc. I live in a relatively large house myself and the repairs and heating are horrendous. Once the kids are done for I'm downsizing.
 
I disagree. I live in a large house with very little income coming in, even less than 25k. I have paid for this house. It is in an area where I always wanted to live. It took me three moves to get here. I have looked after this house over the years doing most of the upkeep myself. I love my house. I tailor my cloth to within an inch of it's life. I don't smoke and I am a modest drinker. So now I have to sell or rent out rooms to stay in my own home?
 
Odea said:
So now I have to sell or rent out rooms to stay in my own home?
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Based on that Odea it doesn't seem right. I'm trying to understand the next tax. I think the last time they introduced a property tax, if you were under a certain income you were exempt.

If you don't rent a room or sell what are your options?
 
oldnick said:
PeteB.

Old widow spending her last years in the home that she's spent over 20 years in. Memories and all that sentimental rubbish, what a load of tosh eh?
Let's slap a new tax on her and if she can't afford it then she just has to leave her home and go elsewhere. It's just the same as changing a car.
Click to expand...

Not a load of tosh. But is a tax. I own a car. It used to cost me €400 to tax, now it costs €700. Because the cost of road tax went up. What do I do? I either suck it up and pay the additional tax by tightening my belt. Or increase my income by using my depreciating assett to deliver pizza to get the extra money.
Or i downsize my vehicle because I cannot afford the motor tax nor do I wish to put myself out with the pizza delivery hassle!

Just a simple example. But these days if you can't afford sentimentality, you can't afford it.

As I said earlier and Bronte re-iterated, I'm sure there is high running costs associated with the property.
 
In the mid 90's I paid my local property tax. I think the tax was around for about 3 years if my memory serves me well. I think I paid £2000 x 3 or thereabouts. I had the money then. I paid every penny of my mortgage plus all the interest. I don't owe anyone any money.
I paid my household charge. I drive a modest 1.4 car that is 8 years old. I do not compare my home with my car. I can afford to pay the increased car taxes, just about. These amounts come from savings. I can buy a new fridge if my existing one gives up the ghost. This money comes from my savings. However I know that I will get about 10 years from a fridge. I have a worn carpet on my stairs. I won't replace this, I will live with it. I recently had my carpet "turned". I browse the yellow stickers in Tesco to make a saving. If I go on holiday I check the SuperValu deals or the Pigsback deals or the GrabOne deals. I watch the Ryanair prices to save a €10 here and there. I have downgraded my health insurance policy. I log on to Pumps.ie to see where the cheapest petrol is.
I will have to pay €1700 per annum in Property Taxes. This is a large sum of money and it is relentless. Year after year with regular increases as my home increases in value or the government decides to increase the percentage.
I can afford modest price increases. I can live with those. It is the stuff coming up in the rear view mirror that is the problem.
PeteB maybe I should sell my house and you can buy it. You seem to be flying high...for the moment.
 
There is an inequity here, many of the older generation have paid off their homes completely. In many many cases there is no correlation between property value and income within that house from whatever source.

I saved hard and cut corners to have my mortgage paid off in my middle 40's, I had not planned on moving and I resent this tax.

Am I alone in thinking that the first political party to tell the electorate that they are doing away with property taxes gets a landslide vote and if I am half right would that group really care if they are called the monster raving looney party.
 
While I would sympathise to a certain extent with this lady, the bottom line is if I can't afford something I can't have it! It may seem unfair, but that's the way it is. Personally, if I had a big house & was having a hard time to make ends meet, I'd sell & get somewhere smaller - would make sense to me.
 
Odea said:
I have a worn carpet on my stairs. I won't replace this, I will live with it. I recently had my carpet "turned". I browse the yellow stickers in Tesco to make a saving. If I go on holiday I check the SuperValu deals or the Pigsback deals or the GrabOne deals. I watch the Ryanair prices to save a €10 here and there. I have downgraded my health insurance policy. I log on to Pumps.ie to see where the cheapest petrol is.

. It is the stuff coming up in the rear view mirror that is the problem.
.
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Odea, it does seem the tax is unfair from your point of view. Can you defer it and what do you think of the deferal option.

If you don't mind me asking and you don't have to reply, why are you living so frugly, almost painfully, when you could downsize and live a financially easier life? Is it the way you are, is it you love where you live, is it your home is your castle, is it something to pass on to your children, is it to fund your nursing home bills?
 
Odea said:
In the mid 90's I paid my local property tax. I think the tax was around for about 3 years if my memory serves me well. I think I paid £2000 x 3 or thereabouts. I had the money then. I paid every penny of my mortgage plus all the interest. I don't owe anyone any money.
I paid my household charge. I drive a modest 1.4 car that is 8 years old. I do not compare my home with my car. I can afford to pay the increased car taxes, just about. These amounts come from savings. I can buy a new fridge if my existing one gives up the ghost. This money comes from my savings. However I know that I will get about 10 years from a fridge. I have a worn carpet on my stairs. I won't replace this, I will live with it. I recently had my carpet "turned". I browse the yellow stickers in Tesco to make a saving. If I go on holiday I check the SuperValu deals or the Pigsback deals or the GrabOne deals. I watch the Ryanair prices to save a €10 here and there. I have downgraded my health insurance policy. I log on to Pumps.ie to see where the cheapest petrol is.
I will have to pay €1700 per annum in Property Taxes. This is a large sum of money and it is relentless. Year after year with regular increases as my home increases in value or the government decides to increase the percentage.
I can afford modest price increases. I can live with those. It is the stuff coming up in the rear view mirror that is the problem.
PeteB maybe I should sell my house and you can buy it. You seem to be flying high...for the moment.
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No. I can't afford your house. But i have lived in my modest 3 bed house in negative equity for the last 7 years and would have no issues abandoning ship and downsizing if required.

However at this stage if you have problems with the property tax, what do you intend to do when you have to pay for water next year? Cloth has has to be cut to measure.
 
Just for the record please don't take my attitude as being accepting that one should have to pay a property tax. I don't necessarily agree with it. But it is a tax and have no other option.
 
No, your attitude comes across to me as...

The law's the law old people. If the govnt imposes a new tax that means you have to move out of your home then you just have to do it.

It doesn't matter if you've been there for twenty or fifty years , or were even born in it -out you go, regardless of the savings that you make in order to stay in it.
 
Well what would you suggest oldnick? ?Its a tax. It has to be paid. How someone chooses to finance that is their own issue.

There's no point in saying I have a nice big house but I can't afford to heat it or maintain it. But to hell it with it, I am just going to stick with it because i've been here for a while, despite the fact when my income reduces further in the future with age and further taxes come I will in an even worse position.

I think a €25k income with a €1,700 tax you just have to set the money aside per month. People in apartment copmplexs paying management fees have to do it all the time. Surely it's just a a matter of budgeting. OP also stated there was savings too.
 
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