"Homeowners to get help" Eamon Ryan

[DerKaiser]

Mind boggling, self serving, piece of logic.

I'm pretty sure you could bottle that and use it as justification for just about anything you pleased.

1. Senior bankers receive bonuses during boom.
2. Said bankers pay tax on their bonuses and spend the rest on champagne and caviar.
3. If only we had more of those lads we wouldn't be in the mess we're in now as their high wages and fiscal irreponsibility are what we need to get us out of this mess.

Blaming the bust on those who had some sense - well that's a new on me. Very Orwellian.

Well A) it's not self serving as I've never paid stamp duty
and B) You're example is too narrow and convoluted.

I'm putting out another point of view that I've rarely seen mentioned.

Stamp duty provided a temporary unsustainable boost to state coffers in the naughties. I fully accept that the only reason these revenues existed to such an extent is because of the unsustainable boom that got us into the current mess.

As such, is it right that those in trouble now who have paid large taxes and duties are totally undeserving of some comeback?

The government was under no obligation to distibute these windfall taxes in the form of income tax cuts and public spending. But it did, and the money is now gone.

The chief beneficiaries of these income tax cuts and public expenditure increases are, in general, the people who acted prudently during the boom. As a result, I do believe there is a logic in saying that they cannot now say 'to hell with those struggling with their mortgages.

 

[Latrade]

The chief beneficiaries of these income tax cuts and public expenditure increases are, in general, the people who acted prudently during the boom. As a result, I do believe there is a logic in saying that they cannot now say 'to hell with those struggling with their mortgages.

I really think we're beyond scraping the barrel and have the pointy stick out trying to get between the slats now. I know how the "other son" felt in the Prodigal Son now. At least his brother had the grace to be repentant as he got the fatted calf rather than blame his prudent brother.

I think the route of a "people's NAMA" is great for PR and soundbites but not for practical purposes. This is where Lenihan needs to step up to the plate and take on the banks. This issue could largely be solved within the banking sector in discussion with those struggling and working out some pattern of repayment.

Then where this just isn't an option for whatever reason with repayment, the LRC proposals may help lessen that blow.

I get the feeling though that the banks taking such a hard line is in order to get as much portrayed as "bad debt" and off their books over to NAMA.

The one gripe most people seem to have is just how easy we make it for people to walk away from their responsibilities.

 

[Howitzer]

The chief beneficiaries of these income tax cuts and public expenditure increases are, in general, the people who acted prudently during the boom. As a result, I do believe there is a logic in saying that they cannot now say 'to hell with those struggling with their mortgages.

Tax cuts are universal benefits. It's hard to see how someone who kept their head down would have benefitted disproportionately from these.

Public expenditure increases benefitted those who received that money as either, income for PS employees, or indirectly via capital expendiure on roads, buildings, etc - developers, consultants. These weren't people who kept their heads down - they may have but not exlcusively.

And again, infrastructural benefits are universal.

So anyone who paid lots of tax deserves something back? I paid tax on a car I purchased. It's now worth a lot less than I paid for it. Where's my NAMA?

You're making the facts suit your argument rather than the other way round.

 

[DerKaiser]

Tax cuts are universal benefits. It's hard to see how someone who kept their head down would have benefitted disproportionately from these.

Public expenditure increases benefitted those who received that money as either, income for PS employees, or indirectly via capital expendiure on roads, buildings, etc - developers, consultants. These weren't people who kept their heads down - they may have but not exlcusively.

And again, infrastructural benefits are universal.

So anyone who paid lots of tax deserves something back? I paid tax on a car I purchased. It's now worth a lot less than I paid for it. Where's my NAMA?

You're making the facts suit your argument rather than the other way round.

You're making exactly my point. A minority paid large taxes and the benefit was universal i.e. there was a distribution of wealth away from a (significant) minority, who purchased houses at inflated prices, to the general public.

Now if we assist those in difficulty on their mortgages we are reversing the process, the general tax paying public will end up bailing out a minority, who happen to be a very similar bunch to the ones who paid high stamp duties in the first place.

A certain demographic have paid disproportionately high taxes and I think we cannot abandon these people.

 

[DerKaiser]

This issue could largely be solved within the banking sector in discussion with those struggling and working out some pattern of repayment.

Then where this just isn't an option for whatever reason with repayment, the LRC proposals may help lessen that blow

I couldn't agree more.

I was under the impression that the banks are being very proactive in restructuring repayment schedules.

As you have stated, there will be people who will just never be in a position to repay their mortgages, however. If we don't face that fact we cannot move forward.

 

[Howitzer]

You're making exactly my point. A minority paid large taxes and the benefit was universal i.e. there was a distribution of wealth away from a (significant) minority, who purchased houses at inflated prices, to the general public.

No. This was your point.

The chief beneficiaries of these income tax cuts and public expenditure increases are, in general, the people who acted prudently during the boom.

2 very distinct things. A universal benefit and one that one chiefly benefits those who acted prudently, are 2 completely different things. Unless people who acted prudented form the majority - which is evidently not the case.

And, FYI, most homeowners will receive a GREATER tax benefit from home ownership over the first 7 years of their mortgage through Mortgage Interest Relief, than they could possibly have paid in stamp duty. Many first time buyers paid NO stamp duty and still receive a relief that can constitute 15% of their interest bill. (compare 15% of the interest on 300K x 7 years versus stamp duty on same)

As such prudent taxpayers are, and will continue for the next 8 years, to make a greater contribution than those servicing mortgages. However only one side of that argument will reap the "benefit" of owning the home. The extent to which it is a benefit is purely down to timing.

 

[Latrade]

As you have stated, there will be people who will just never be in a position to repay their mortgages, however. If we don't face that fact we cannot move forward.

Absolutely right, but as of yet we don't know what proportion of people this is. Apart from Start Mortgages, a lot of banks do seem to be more pragmatic, but just based on postings here that doesn't always seem to be consistent.

I think it needs to be raised from a voluntary or morality basis and into something enforceable and regulated. Take out the discretion from the banks and have a clear criteria for where they provide assistance and the conditions under which it is ok to persue the case by a legal route.

Where a legal route needs to be taken, again the state can have an arbitration panel or some such for "grey cases".

Then in the cut and dried "won't pay" category we have the court system.

On reflection, I personally don't see a need for a People's NAMA. The actual NAMA was a bullet we just had to bite for the "greater good". Everything else can be handled through a regulated banking system in my opinion.

 

[DerKaiser]

Unless people who acted prudented form the majority - which is evidently not the case.

I was making the assumption that the majority had acted prudently (as evidenced by the large proportion with no mortgage)

And, FYI, most homeowners will receive a GREATER tax benefit from home ownership over the first 7 years of their mortgage through Mortgage Interest Relief, than they could possibly have paid in stamp duty. Many first time buyers paid NO stamp duty and still receive a relief that can constitute 15% of their interest bill. (compare 15% of the interest on 300K x 7 years versus stamp duty on same)

My only point has been that those who paid large stamp duties contributed handsomely to the economy and this should not be forgotten, particularly by those who benefitted.

I feel that the general public, be they taxpayers, public servants or both, simply do not acknowledge that they have benefitted from lower taxes which were only possible whilst the government collected large sums of money from residential stamp duties

 

[dontaskme]

paying lots of tax is probably more detrimental to the economy than going down the pub and buying rounds of drinks. Once the money is in the government coffers it seems more likely to be paying for hats at Ascot or revamping residences in Canada or flying financial regulators' wives around the world etc. etc. If you spend it down the pub at least you're supporting your local economy.

Paying large stamp duties just means people were fanning the flames of what was obviously an overheating economy, as well as probably being personally reckless. Hardly the stuff tales of heroism are made of.

 

[cartman1]

I think it's a disgraceful suggestion. For one thing the government does not have the money to be bailing people out.

Secondly, and more frighteningly, it sends out the wrong signal. People who are having trouble paying their mortgages see this and think they're going to get a "Get out of mortgage free" card. Then they will stop making repayments or missing repayments so that they well be well placed when some sort of scheme is in place.

I'm not suggesting we bail people out. If someone took out a debt then they should repay it, that's the basic principle from which we should start. There's a big difference between debt restructuring and debt forgiveness and the government should force the banks to be as flexible as possible in providing solutions.

If people are worried that it might happen again with the same people then make it a condition of any restructuring that they need written consent from the banks to open any new credit facility with another financial institution either indefinitely or for a period of time.

 

[dontaskme]

The banks are already being flexible because the government is making them.

The other measures I've seen mentioned include rolling up interest and banks taking an equity stake. These both seem to come directly from the Anglo Irish playbook. Has nobody learnt anything from all of this?

 

[cartman1]

I'm afraid they're only being flexible to a point and with their own debt. I don't agree with an interest roll up either and an equity stake isn't a great idea. Instead they should be looking at extending loan periods and sitting down with mortgage holders to assess their overall debt situation with all financial institutions not just their own. They won't do either of these at present and I'm sure there are other mechansims out there that would help.

 

[Rad]

That was a great letter in the indo, a good suggestion as how to work out what is fair for the NAMA public bailout.

Re those who are knocking this bailout, the government is responsible for the situation we are ALL in.

I personally bought 4 new houses over the last 13 yrs paying 40% tax to the government on each, ex stamp. I also have paid in excess of 50K pa Tax for the last 20 years.

I personally think its time for me to get this some of this money back.

Regarding the knockers of the Ryan proposal maybe we should also stop paying social welfare, dole etc. Its the same thing. We all make mistakes.

 

[dontaskme]

I personally bought 4 new houses over the last 13 yrs paying 40% tax to the government on each, ex stamp. I also have paid in excess of 50K pa Tax for the last 20 years.

I personally think its time for me to get this some of this money back.

It's already been spent, flying Jackie Healy Rae and John O'Donoghue up and down from Kerry. :lol: :lol: :lol:

 

[Rad]

Thanks Sunny.

Yes I traded up 4 times.

Whats with the attitude BULL not so much WORTH in your points. Get a life.

Anyway my gripe is with the Government who pumped this whole thing. As Bertie said "The Fundamentals of the Property Market are sound"

 

[Howitzer]

You traded up 4 times, into new houses each time? ("40% tax")

And paid stamp duty each time? ("I personally bought 4 new houses over the last 13 yrs paying 40% tax to the government on each, ex stamp")

How much mortage interest relief have you received over that period? Your annual mortgage accounts from the bank will give an exact number.

 

[Howitzer]

Hardly. If you read the previous posts on the thread you'll see how you get much of tax you paid back in Mortgage Interest Relief. FTB's get it all back.

Your scenario of trading up 4 times into a new house each time isn't the norm.

I'd imagine 13 years ago you got the first time buyers grant too on your first purchase.

 

[bullworth]

Thanks Sunny.

Yes I traded up 4 times.

Whats with the attitude BULL not so much WORTH in your points. Get a life.

Get a life ? My attitude is informed by the fact that the remainder of my salary after paying taxes for bail outs is what pays for my life and for my family.
I am sure if you had continued to make super profits your attitude would have been to not give a damn about sharing them with our schools and hospitals. Now you took a gamble and made losses you expect society to bail you out when society hardly has enough money for schools and hospitals.

The renters decided to suffer the consequences of missing out on ''infinite'' prices rises. It works both ways. You would never expect them to share in your super profits f you had done well. Renters should not be penalized by having to bail homeowners out when they cant' even afford a home of their own and have to rent. The very notion that someone stuck in a bedsit has to pay extra taxes to pay for your sense of entitlement to own a home is fundamentally unfair.

Nobody forced you to pay stamp duty. Nobody forced you to buy 4 houses.
My attitude Rad is informed by the simple fact that Adults in the real world know that nobody owes them a living. Adults are responsible for their own decisions.

Anyway my gripe is with the Government who pumped this whole thing. As Bertie said "The Fundamentals of the Property Market are sound"

Bailing property gamblers out would be yet another ridiculous policy by a government which has not changed from the one which got us into this mess.

 

[DB74]

Does the sequence of the last few posts on this thread look out-of-sync to anybody else but me?

 

[Howitzer]

Cabinet to give debt think-tank the green light

The group is expected to consist of Irish Banking Federation boss Pat Farrell, consumer advocate and founder of the askaboutmoney website, Brendan Burgess; and Paul Joyce of the Free Legal Aid Centres (FLAC). Also on the group will be former KBC Bank boss Tom Foley and representatives from the Financial Regulator and the Money Advice and Budgeting Service.

The group will advise on reform of debt enforcement, including the regulation of debt agencies, and the establishment of a Debt Enforcement Office to remove debt proceedings from the courts.
The Greens believe a fear of debt is hampering recovery as consumers remain wary about spending.
"The whole idea is that we don't want people encumbered by debt and for that to stifle our recovery," Mr Ryan said recently.

Debt forgiveness doesn't appear to be within it's remit. For the most part this appears to be about ironing out operational and legal issues which have only come to light because of the simultaneous collapse of the employment/housing markets. There won't be any helicopters raining down money.