Property tax to replace stamp duty?

[ubiquitous]

This issue could be resolved by exempting the first €500k from the tax .

This wouldn't make a whole lot of sense. What percentage of properties in Ireland are worth more than €500k? What would this percentage be if a property tax of say €10,000 per year was levied? You would end up with a small subset of the national property stock being levied with a high property tax and the bulk of properties being levied zero.

 

[webtax]

I should have added that it would apply only to PPRs, so all investment properties & second homes would be chargeable. As for the €500k & the % tax to be leived, these figures could be worked out by government to balance income generation & equity.

 

[Afuera]

If a person wishes to purchase a property and leave it empty so be it.

An empty property still has to be connected to the sewage system, road network, water system etc. All of this requires a lot of funding to maintain. At least if someone is living in a property they bring something to the area by buying things, running businesses or working locally. Vacant properties on the otherhand do nothing more than cost an area.

The idea of a property Tax for Investment properties seems like a good idea and should have been introduced years ago. If an Investment property can be afforded then an Investment Tax of 0.75% should be imposed across the board, including Land which is not farmed.

This discouragement of investment could end up causing a shortage in rental properties.

 

[minion]

Well, the latest from the Government is that they don't see this as being a viable solution.

I remember hearing sililar when the idea of a congestion charge was first suggested. Watch that one fly in asap.

FF playing with property tax will be a disaster as it always has been before.

 

[mercman]

Afuera, In a modern Democratic society, no person or entity should be allowed to tell persons how or how not to spend their money. Sure this has been a well voiced argument against Wicklow County Council and also against Galway County Council who try and stop English speakers purchasing in a Gaelteacht area.

A property Tax would have less of an impact on the rental investment market than interst rates fluctuating. Which is better - Rates which are variable or a fixed percentage property Tax based on the type, size and room quantum ?

 

[Afuera]

Afuera, In a modern Democratic society, no person or entity should be allowed to tell persons how or how not to spend their money.

Try telling that to the 20 year old in the US who wants to buy a bottle of beer. I think you may be confusing democracy with uncontrolled capitalism.

Essentially democracy only allows citizens to have a say in who gets to run things for them. If the people feel that they should control and protect certain resources (train lines, water supply, housing, etc) then it's likely that's what they will get. It's not a question of money, it's about upholding and protecting the values of a particular society.

A property Tax would have less of an impact on the rental investment market than interst rates fluctuating. Which is better - Rates which are variable or a fixed percentage property Tax based on the type, size and room quantum ?

Neither are desirable to be honest. Investors are free to look for fixed rates if they deem the risk to be too great with the variable option. Punishing them for providing a badly needed service does not seem to be very forward thinking though.

 

[z106]

Well going by the vibes in teh sunday newspapers this property tax looks unlikely to be introduced.

 

[Cityliving]

The funny thing is that people who own homes say it should only be applied to investors which is laughable.

ok a FTB buys a home not as an investment but as a home. The tax especially if its small will be an inconvenient and an extra cost but it wont stop a homeseeker from buying.

It will however stop an investor as their yield is directly affected and seeing as investors are a significant proportion of what drives the housing market it may generate lots of income from existing investors but it will kill what is left of a dying housing market.

A tax like this would ahve been a great idea 5 -10 years ago, now it is too late and will only cripple homeowners and investors alike.

By the way for the older people here you will remember that it was Finna Fail who cancelled the Rates system that existed not too many decades ago to win an election!

 

[teachai]

The problem with a property tax is that it is not based on someone's ability to pay, but the perceived value of the property.

It will also be expensive to administer. There will have to be exemptions for x, y, and z depending on their individual circumstances. It will be the local county councils who will have to do all the administration and they will then require extra funding form the government.

It seems the stamp duty system was perfectly ok, when house prices were going through the roof, but now they are falling, its not a fair system.

 

[ButtermilkJa]

...
It seems the stamp duty system was perfectly ok, when house prices were going through the roof, but now they are falling, its not a fair system.

Yep, it was perfectly fine for FF for the last 10 years when they got their generous donations from builders at the Galway Races and their brown envelopes for rezoning, but now the boom is over, the tent is gone and there's no more builders around – so they have the nerve to turnaround and start reaching into our pockets.

 

[mercman]

Buttermilk, is this a Taxation or a Political Topic ?? Well we all know who you support and there is little point in apportioning all the blame to FF. Who for years refused to rezone lands around the cities which created the shortage over the past ten years ?

 

[Bronte]

There was a property tax, about 15 or 20 years ago and it was so unpopular I think it lasted only for 2 years. That's why FF will not introduce it again. They have a similar thing based on house value in the UK and it causes people's blood to boil.

 

[mercman]

Bronte, not dissagreeing with you, but on Investment properties it would be quite different. They had Residential Property Tax here which was a nightmare and as far as I know contined to be charged when houses were sold and the Revenue took their slice even tough it had ceased. The Tax take is so low at present that it must be supplemented in some manner. In vestors should not crib as we are talking a small amount on the overall scheme of things.

 

[ButtermilkJa]

Buttermilk, is this a Taxation or a Political Topic ?? Well we all know who you support and there is little point in apportioning all the blame to FF. Who for years refused to rezone lands around the cities which created the shortage over the past ten years ?

It's a topic about the advantages/disadvantages of introducing a new property tax. I chose to remark on why I believe that the timing of this is wrong. If you read my earlier post in this thread you would know my thoughts on the tax itself. My later remarks were a reaction to someone elses mention of timing.

As for your political remarks, I don't support anybody (but you knew that already ), but if you want to turn it into a political debate by singing the praises of FF then we can start a new thread.

 

[Bronte]

Mercman I forgot the name of the tax and you are correct you had to have a certificate that the tax had been paid or was not due for some years after it was abolished. As an investor who lived through Bacon and which stopped me investing at that time if they introduced a property tax of any significant amount I could see it reducing the value of investment properties and people like me would have to consider getting out of the business and that would reduce the availability of rental properties. I believe I've paid plenty in stamp duty and CGT already.

 

[Complainer]

people like me would have to consider getting out of the business and that would reduce the availability of rental properties. I believe I've paid plenty in stamp duty and CGT already.

Any reduction in the availability of rental properties wold be balanced out by the increase in properties for sale.

 

[Bronte]

Any reduction in the availability of rental properties wold be balanced out by the increase in properties for sale.

And who would buy them?

 

[webtax]

And who would buy them?

The people who are currently renting, having been priced out of housing for the last number of years (largely due to the better tax breaks available to investors).
As for it triggering a further decline in house prices, low costs make a country competitive and that includes housing.

 

[Bronte]

The people who are currently renting, having been priced out of housing for the last number of years (largely due to the better tax breaks available to investors).
As for it triggering a further decline in house prices, low costs make a country competitive and that includes housing.

Well amazingly enough the people who are currently renting are not buying even though they are no longer priced out of the market. Why do you think that is?

 

[webtax]

Well amazingly enough the people who are currently renting are not buying even though they are no longer priced out of the market. Why do you think that is?

I would imagine they are waiting for prices to finish falling or saving their deposit now that 100% mortgages are finished.