7 year CGT exemption for investment properties may make the rental crisis worse in 2019

[Sarenco]

If the exemption is pulled forward to say next year, then 100% of properties sold using this scheme next year wil be removed from the rental market.

Does that not assume that:- (a) 100% of these properties will be sold; and (b) 100% of these properties will be sold to owner occupiers?

Neither assumption seems very realistic to me.

TBH, I really don't see how the expiry of the 7-year minimum holding period could have any significant impact on the rental or sales market. In any event, I think there is zero chance of the 7-year period being extended.

 

[ixus]

Take 2014, per this thread:

http://www.thepropertypin.com/viewtopic.php?f=4&t=26451&p=912717&hilit=Ixus#p912717

There were approx 36.2k transactions on the PPR. Mortgages by volume were 16.4k, indicating 20k cash only transactions. Approx 55% cash to 45% mortgage. This year has swung to circa 40% cash to 60 mortgage.

If 20-40% of the cash only were getting out at the end of the CGT relief period, we would see 4-8k units come online. Not insignificant. Pretty sure figures are similar for 2012/13.


@ landlord - Removal of rental property also removes a potential tenant. If the house is let, it is off the market anyway.

 

[galway_blow_in]

i wouldnt pay any heed to anything id read on the property pin

its a site reserved for permabear cranks , even in 2012 , most were predicting the average house in dublin would drop to around 120 k for a three bed semi

 

[Gordon Gekko]

I've yet to meet a client who is frantically waiting for the expiry of the 7 year period to offload his/her property.

 

[ixus]

i wouldnt pay any heed to anything id read on the property pin

its a site reserved for permabear cranks , even in 2012 , most were predicting the average house in dublin would drop to around 120 k for a three bed semi

They're statistics from official sources. It simply shows the property market has flipped from cash driven to mortgage driven over the years. Factors likely include ECB monetary policy, bank lending policy, economic activity, jobs & the CGT relief

On the other side, forums evolve. Very few permabears. Though I might be one of them. There's even a thread where someone called the bottom for supply reasons.

 

[ixus]

I've yet to meet a client who is frantically waiting for the expiry of the 7 year period to offload his/her property.

That's interesting, though I wouldn't expect it to be frantic with the expiry being anything from 18 months to 3.5 years. Would the logical approach not be to look at the market 6 months beforehand, assess the figures and make decisions then? It's not an area I operate in (client management), so no idea.