New property tax

[murphaph]

As someone who will be subject to this proposed tax I must say I am ready and willing to pay it. I'm not happy about it of course but I understand that we ALL must do our bit and in general, people who own more than one property are likely to be more wealthy than people who do not. I would expect special exemptions for people who've bought property for their parents to live in etc.etc.

HOWEVER! I expect the government to reel in its own spending first and foremost by implementing immediate pay cuts across the public sector and followed up by a detailed analysis of who does what with redundancies for wasters being the norm. The 'job for life' mentality must be a thing of the past. Everyone must take their part of the pain so our country may recover.

 

[Robin Banks]

If a property tax is brought in it will just raise rents. It's very simple.

Not with 21,000 properties to rent on Daft it isn't. There is massive oversupply of rental property, the country is in the grips of a property bubble induced recession, emigration & unemployment are rising.

The landlord won't be at a loss

Yeah, they'll all just jack up the rent on their empty BTL shoeboxes. That'll get them rented for sure.

It's a race to the bottom now lads, and it's just getting started.

 

[Bronte]

actually nice apartment, but add 20k for 2 bedroom

Can you not acknowledge that he has proved his point. There was in the not so distant past a time in Ireland when you could purchase houses for less than the cost of site plus building cost. As in the valuation was basically = to the rebuild costs.

As a landlord another tax is just that and 200€ is not a lot to be honest. This is going to be one of those dreaded taxes, hard to implement, hated, too many exceptions, difficult to get people to pay it. It's just rates by another name. It would be far simplier if they just increased the PRTB fee that way people who earn money on their property would be the one's paying the tax.

 

[kkelliher]

Can you not acknowledge that he has proved his point. There was in the not so distant past a time in Ireland when you could purchase houses for less than the cost of site plus building cost. As in the valuation was basically = to the rebuild costs.

As a landlord another tax is just that and 200€ is not a lot to be honest. This is going to be one of those dreaded taxes, hard to implement, hated, too many exceptions, difficult to get people to pay it. It's just rates by another name. It would be far simplier if they just increased the PRTB fee that way people who earn money on their property would be the one's paying the tax.

He hasnt proved his point, as its a wait and see? I still dont believe you will buy a 3 bed house in Dublin for €102k. Lets see.

I agree with your other points. I would have taught a fair way would be to introduce a licence for those who wish to rent which would have to be renewed every year, Like a TV licence. That way those who own second properties with family etc etc in them would not be charged.

 

[Thomas22]

Alot of people will have bought the 2nd home as their pension, which they saw as a safety net for retirement. Your view on this topic is quite simplistic and doesn't seem to allow for reason.

Buying property for a pension will turn out to have been a very poor investment.

Although I feel sorry for these people buying property for a pension was never a good idea. It might have worst in the last few years but it goes against the most important aspect of long-term investing, diversification.

Th sooner property turns back into a place of shelter rather than a speculative investment vehicle the better for the country. When prices fall another 50%-60% the myth of housing as an investment will be well and truly over.

 

[MrMan]

Buying property for a pension will turn out to have been a very poor investment.

Although I feel sorry for these people buying property for a pension was never a good idea. It might have worst in the last few years but it goes against the most important aspect of long-term investing, diversification.

Th sooner property turns back into a place of shelter rather than a speculative investment vehicle the better for the country. When prices fall another 50%-60% the myth of housing as an investment will be well and truly over.

I agree that you shouldn't put all of your eggs in one basket, but I don't think it is true to suggest that property investment is a myth. People have put faith in others managing their pensions for them and have been left with nothing so there is no sure way of managing for the future. It also depends on when people bought and when they plan on cashing in as to ascertain whether it has been a poor investment.

 

[rabbit]

MAny people these days are at a loss due to taking on a second property.
Obviously like any business that is the risk they took on and that's the way the cookie crumbles and all that.

However I certainly don't see why they should be subjected to a further property tax while their business runs at a loss.

Why not target profit making businesses instead?

Good point. Some people bought apartments and houses in parts of the country where there are now whole estates of empty dwellings. They paid stamp duty on these, and the govt got a lot of vat and income tax etc in their construction. People were encouraged to invest in section 23 / 27 / 50 property etc. Now people who bought in 04 / 05 / 06 are in negative equity, often with empty apartments ( 2/3 of Leitrim buildings are unoccupied ). This tax if its introduced will be very unfair and the final nail in the coffin for many. It will make investor property even harder to sell, if its not hard enough / impossible already.We should be encouraging property transactions...that is where the govt will get stamp duty + help keep solicitors + auctioneers with some income etc ( I am not a solicitor or auctioneer , but I do not wish to see unemployment rising more ).

 

[kkelliher]

The main reason they are looking at it is to give them a more steady income stream as opposed to stamp duty. I cannot see how this will help as it will over a period of time dilute the investor market away.

A general all property tax (which would not be popular) is the only way they will get what they are looking for.

As a second property owner I in principal have no problem with a tax like the €200 a year. I do have a major problem with the proposed 1% of value per year that some economists are outlining.

 

[Bronte]

Buying property for a pension will turn out to have been a very poor investment.

Although I feel sorry for these people buying property for a pension was never a good idea.

What would have been better than property for a pension?

 

[Mr DT]

A balance portfolio of Cash, Bonds, Equity, Property

 

[rabbit]

I do have a major problem with the proposed 1% of value per year that some economists are outlining.

If its 200 now it will be 2000 next year, and 5000 the year after. Property is already taxed enough ( stamp duty is very high, as is vat etc, income tax etc ) . If they wanted to tax it more , that should have been done in 02, 03, 04 etc, instead of fooling the public with tax incentives etc ( section 23/27/50 ). The govt simply cannot change the level of the playing pitch now.

 

[Jister]

I I work in IT and I have rented for the last 6 years and will continue to do so until an average house is 3 times average salary.

I think thats a very accurate prediction.

I remember working and building my house in the late 1990's and every year the tax bands were widened, I was getting 4 and 5% pay rises, the top and bottom tax rate were coming down by 1 or 2%.

The value of my home rocketed, maybe "worth" 450K at the peak of the idiotic price cycle.

Now we are beginning to see the begining of the deflation, tax will go up by 1 or 2% a year for the next few years, wages are being cut all over the place etc.

I reckon my house is worth about €250K, specuvestors hate me saying this, its the truth though.

The exact opposite to what happened in the late 1990's is going on now, hold tough and average prices will be 3 x average salary in a few years.

 

[Thomas22]

If its 200 now it will be 2000 next year, and 5000 the year after. Property is already taxed enough ( stamp duty is very high, as is vat etc, income tax etc ) . If they wanted to tax it more , that should have been done in 02, 03, 04 etc, instead of fooling the public with tax incentives etc ( section 23/27/50 ). The govt simply cannot change the level of the playing pitch now.

Of course they can. They are quickly running out of money and a property tax is an obvious way to fill the gap.

 

[kkelliher]

I think thats a very accurate prediction.

Lets remember he said 3 times average salary therefore approx €102k and we were talking about a 3 bed semi in dublin.

Accurate......Only time can tell but very unlikely

 

[Robin Banks]

Only time can tell but very unlikely

Yeah, that's probably what you'd have said about combined share price of AIB and BOI trading for less than €1, back in 2007 when they were selling for over €40.

Like I said, we're just gettin started on the property slide. Weeeeeeeeeeeeeee !!

 

[Thomas22]

Lets remember he said 3 times average salary therefore approx €102k and we were talking about a 3 bed semi in dublin.

Accurate......Only time can tell but very unlikely

It only seems unlikely when you think the current prices are realistic. 4 times average salary is the long term average ratio of house prices to salary but we might just overshoot on the downside like we did on the upside.
3 or 4 times might sound crazy but it is likely to happen.

 

[Importer]

KKeliher, You have a few things to learn still about boom and bust markets, I fear.

102K for a three bed semi in a decent part of Dublin is looking more likely by the day. Who on earth would have believed AIB shares would touch 33 cents ?

You are also correct that the Irish Government is unlikely to be able to support the banks in a period of such turmoil, and that my friend is the most worrying thing of all.

 

[minion]

KKeliher, You have a few things to learn still about boom and bust markets, I fear.

102K for a three bed semi in a decent part of Dublin is looking more likely by the day. Who on earth would have believed AIB shares would touch 33 cents ?

I think you may be exaggerating a bit here.

If that happened i know a lot of people who could buy them outright for cash from their savings.

And if they even had half of that saved then they could pay the rest back to the bank for about €55 a week over 25 years.

Or even if someone borrowed the whole lot, it would cost them about €125 a week.

The dole would be enough pay for that. Imagine 3 people on the dole taking a room each and sharing that mortgage. What a life.

 

[foghorn]

No way thats true. I can guarantee weather you know or not but your IT job is linked in some manner to the boom in Ireland which was spurred on by the Property Industry.

Feel free to explain the hand-waving vague "linked in some manner" and what relevance it has.

You might as well say "Your IT job is linked in some manner to the high price of Dublin escorts".

No disrespect but I cannot believe someone in IT has been unable to buy a house for over 6 years.

You seem to not understand the difference between "unable to" and "want to". I myself could have stretched to paying a considerable mortgage. However, when looking at historical trends in house prices, it seemed insane. I was right. And those who were wrong now want me to bail them out.

 

[wheeler]

Youre in the minority so most greedy people did it for profit and pleasure

Can you provide the statistics to back that up?

How many have bought second homes instead of taking out a pension?
How many have bought second homes for family members?

This is taxing the responsible amongst us.

Making a sweeping statement like this doesn't help without backing it up.

Whether or not we are in a minority should not mean that the minority should therefore be ignored.