Make mortgage interest payments and childcare costs tax deductible while at the same time increasing property tax on PPR's

Purple

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It doesn't reduce the cost of purchase, no more than a cheap printer deal tied to expensive ink use reduces the cost of purchasing a printer.
Why do you think that?
Why not just increase stamp duty instead? (At least if it backfires, it's easier to reverse than LPT).
Because that's a transaction tax which is only paid by the people who buy the 1% of properties which change hands. A wealth tax is fairer and less volatile.
 

T McGibney

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Why do you think that?
Because it's a truism that the cost of purchasing any property, especially a home, involves more than the price you pay to acquire it.
Because that's a transaction tax which is only paid by the people who buy the 1% of properties which change hands. A wealth tax is fairer and less volatile.
You're not proposing a wealth tax though.
 

Bluefin

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Where's the sweet spot purple.. . Plenty of families around me with both parents working in well paid jobs with 3/4 kids?

With the climate changes (disaster) on its way, ireland may become a very attractive destination in the not to distant future fot net migration... If only we humans could solve the bloody housing issues
 

Purple

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Because it's a truism that the cost of purchasing any property, especially a home, involves more than the price you pay to acquire it.
Yes, but that doesn't explain why you thing it doesn't reduce the cost of purchase.
You're not proposing a wealth tax though.
Most wealth is held in the form of property. A property tax is the best form of wealth tax.
 

Purple

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Where's the sweet spot purple.. . Plenty of families around me with both parents working in well paid jobs with 3/4 kids?
That's the question alright. I suppose the answer has a lot to do with how economically productive the children will be in the future.
With the climate changes (disaster) on its way, ireland may become a very attractive destination in the not to distant future fot net migration... If only we humans could solve the bloody housing issues
There's 10 billion people on the planet. The population will top out at around 11-12 billion. There's more than enough resources for us all if we just use them correctly but that topic's been covered on plenty of other threads.
 

T McGibney

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Yes, but that doesn't explain why you think it doesn't reduce the cost of purchase.
I can't read your mind. You've claimed that it would without explaining your full reasoning. Perhaps you're assuming that a property tax hike will cause house prices to drop disproportionately, but if you are, you haven't said that.
Most wealth is held in the form of property.
Possible but questionable. I'd have thought that totals in cash and equities combined would be more, but I may be wrong.
A property tax is the best form of wealth tax.
Again questionable. And that assumes we actually need a wealth tax.
 
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Purple

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I can't read your mind. You've claimed that it would without explaining your full reasoning. Perhaps you're assuming that a property tax hike will cause house prices to drop disproportionately, but if you are, you haven't said that.
You said that "It doesn't reduce the cost of purchase". Why do you think that a higher property tax which, as I've already proposed, would be progressive, wouldn't have an impact on house prices?
Possible but questionable. I'd have thought that totals in cash and equities combined would be more, but I may be wrong.
"Housing accounts for the bulk of household wealth , valued at €555 billion and it accounts around two thirds of all assets held by households.
Taking account of debt attached to housing, the net figure is still comfortably over half of all net wealth."
Source

Again questionable. And that assumes we actually need a wealth tax.
Yes, it's my opinion and this is a discussion forum. I've already said that I'm in favour of a reduction in tax on wealth creation and an increase in tax on wealth retention.
 

T McGibney

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You said that "It doesn't reduce the cost of purchase"
Selective quote.
. Why do you think that a higher property tax which, as I've already proposed, would be progressive, wouldn't have an impact on house prices?
It might well affect house prices, but not the cost of buying a house. You haven't clarified that.
"Housing accounts for the bulk of household wealth , valued at €555 billion and it accounts around two thirds of all assets held by households.
Taking account of debt attached to housing, the net figure is still comfortably over half of all net wealth."
Source
That source is inaccessible. Does it factor in for example, pension entitlements?
Yes, it's my opinion and this is a discussion forum. I've already said that I'm in favour of a reduction in tax on wealth creation and an increase in tax on wealth retention.
Yes, opinion.
 

Purple

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Selective quote.
I know. It was selected to show the point you were making.
It might well affect house prices, but not the cost of buying a house. You haven't clarified that.
Do you mean the total costs associated with buying the house or the total cost of ownership over the lifetime of that ownership?
That source is inaccessible. Does it factor in for example, pension entitlements?
They take private DB pension values into account but not State pensions. There are discussions elsewhere on AAM about it.
Yes, opinion.
Now you're getting it! ;)
 

Bow tie

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A person who created their own wealth...especially in the form of a roof over their and dependants heads for stability purposes (the PPR not investments), and which has already been taxed (frequently at 52%) does deserve to retain said wealth and not be forced down specific pathways.
 

T McGibney

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I'm talking about the former, the cost of purchase. That's when people with young families have the least wealth and the highest outgoings.
...which are typically spread over decades with the help of a mortgage.

And that's why when they're buying, they and their finance provider have to concentrate not on the price per se but on future affordability, ie the lifetime cost, which is impacted by any material hikes in property tax, interest rates, and other costs.
 

Purple

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A person who created their own wealth...especially in the form of a roof over their and dependants heads for stability purposes (the PPR not investments), and which has already been taxed (frequently at 52%) does deserve to retain said wealth and not be forced down specific pathways.
But most home owners haven't created their wealth. They have benefitted from a massive increase in house prices which was driven by a massive increase in money supply which was the result of QE. It takes a special type of delusion by a person to think that they are sitting in houses worth 5 times what they paid for it and with pension fund that has more than doubled in value over the last 6-7 years by virtue of their own hard work, intellect and ingenuity. Think of property tax as a small contribution to the people who have to pay for all of that because that house and pension value is down to luck and an unimaginable burden of debt which has been foisted on future generations.
 

Purple

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...which are typically spread over decades with the help of a mortgage.

And that's why when they're buying, they and their finance provider have to concentrate not on the price per se but on future affordability, ie the lifetime cost, which is impacted by any material hikes in property tax and other costs.
You are ignoring the other part of the proposal where the revenue from the increases in property tax are used to offset the cost of making mortgage interest tax deductible. One part acts to depress prices in the entire market while the other offers targeted a benefit to buyers.
 

T McGibney

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You are ignoring the other part of the proposal where the revenue from the increases in property tax are used to offset the cost of making mortgage interest tax deductible.
I am because as I said yesterday in this country tax breaks are temporary while tax hikes are permanent. The mooted tax-deductibility of PPR mortgage interest wouldn't last 2 difficult Budgets and probably not even one.

One part acts to depress prices in the entire market while the other offers targeted a benefit to buyers.
For the nth time, prices are irrelevant. The new buyer will inevitably be worse off when (not if) their mortgage interest tax deduction is curbed and then scrapped.
 

Purple

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Nice insults. I created the wealth to purchase the home.
It's not an insult. You may well have created the wealth to buy the home but the increase in the price of the home had nothing to do with you.

I'm currently selling a house. It has increased in value by €600k in the last 10 years. That's €1154 a week. I'd have to earn an extra €2400 a week to net that sort of money.
During the same period my pension increased in value by €400k without me putting a cent into it. That's an increase of a million Euro in net wealth without me contributing anything towards it. People who don't have capital (wealth) have no chance of making that sort of gain.
 

Purple

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I am because as I said yesterday in this country tax breaks are temporary while tax hikes are permanent. The mooted tax-deductibility of PPR mortgage interest wouldn't last 2 difficult Budgets and probably not even one.


For the nth time, prices are irrelevant. The new buyer will inevitably be worse off when (not if) their mortgage interest tax deduction is curbed and then scrapped.
So you're not opposed to the proposal, you're opposed to what you think will happen to the proposal. Is that correct? That's a completely different thing.
 

T McGibney

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So you're not opposed to the proposal, you're opposed to what you think will happen to the proposal. Is that correct? That's a completely different thing.
I'm opposed to it because on the basis of 30+ years experience, I know with reasonably certainty how it would play out in the medium/longer term.
 
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