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

I'm angry because instead of banking risk decisions at the top incurring loses to those who invested in a normal manner, we are in a rolling process from now on, it seems, of handing over everything to roll up toward the top of the pyramid. I don't want that.
 
Bronte said:
Mandelbot if you don't mind, you've calculated the tax would be equal to 5% if you deffered for 20 years based on a 4% charge. What would it be as a percentage of the property value without the 4% charge. To see what saving one would make by not defering.
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Well assuming no change in value or tax rate over the 20 years:

0.18% x 4% x 20 +
0.18% x 4% x 19 +
0.18% x 4% x 18 ... etc

I make it 1.512%

If the nominal value increases over time it probably decreases that %
 
mandelbrot said:
Well assuming no change in value or tax rate over the 20 years:

0.18% x 4% x 20 +
0.18% x 4% x 19 +
0.18% x 4% x 18 ... etc

I make it 1.512%

If the nominal value increases over time it probably decreases that %
Click to expand...

You're using simple interest -- does it not get compounded? ... in which case it would be 1.974%
 
Just as a matter of interest for anyone considering deferring the LPT -- if your circumstances improve in future do you have to pay previous years off, or can they be left deferred until the property is eventually sold?
 
dub_nerd said:
You're using simple interest -- does it not get compounded? ... in which case it would be 1.974%
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What makes you think it would be compounded? Statutory interest on any other tax liability is simple interest so it's logical to assume the rate quoted is simple interest.
 
mandelbrot said:
What makes you think it would be compounded? Statutory interest on any other tax liability is simple interest so it's logical to assume the rate quoted is simple interest.
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Nothing makes me think it would be compounded. That's why there's a question mark after "does it not get compounded" ... because it's a question.
 
No, genuine question. I try to avoid rhetoric. Thanks for answering anyway.

Allow me to bump my latest one ...

If you defer the property tax and your circumstances improve in future do you have to pay previous years off, or can they be left deferred until the property is eventually sold?
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Bronco Lane said:
So outstanding taxes are paid off and the residue distributed?

Am I right in saying that if a house worth say €900k is left to 3 children then each gets €300k. The inheritance tax free threshold is €225k, so each pays inheritance tax on the remaining €75k.

If a house is worth €900k and is left to 3 children but has outstanding property tax of say €30k then €870k is distributed amongst the 3 children with each receiving €290k each. So each pays inheritance tax on the remaining €65k and not €75k?

Incidentally I agree with truthseeker on his point made.

Seems like a way for someone to reduce an inheritance tax bill. Am I right on this?
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If the €900k house was inherited, any inheritance tax liability is calculated using the €900k value.

The €30k property tax liability is separate.
 
The €30k would be paid from the estate and the residue distributed.

CAT is payable on the amount inherited.

@Bronco Lane, this would indeed reduce an inheritance tax bill. So would willing €30k to the Irish Cancer Society or any other charity. While the amount of tax payable by each beneficiary is reduced by €3,000, the amount inherited is reduced by €10,000 so they are worse off by €7,000 each.
 
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