Tax Treatment of Landlords has to be Revisited

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Leo said:
What tax incentive do you think would make tens of thousands of new units available in that timeframe?
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I thought I asked you that same question!!!!

I think for April 2023 when estimated 5,000 landlords will have served notice on tenants and they will be evicted by June 2023, something has to be done or effort has to be made to reduce this as much as possible.

I think a tax break for landlords who sign up for a 2-5 years lease agreement. Or a tax break for a meaningful reduction in rent. An ability for landlords in RPZ with properties way out of kilter with rents to be permitted to be Ng them some way to market rent.

I think some portion of the mortgage repayment (capital) will have to be allowable against tax. This would encourage new investment I believe.

I think certainty needs to be provided to landlords. I think SF threats of a three year rental freeze and inability to sell property with vacant possession needs to stop. It scares landlords and motivates them to leave and we need them to remain until your solution of mass supply arrives. I think SF are being found out in the polls.

Landlords are experiencing interest rates increases and an inability to increase rents by more than 2% is eroding profits and turning small profitable properties into loss makers. Why on earth would landlords stay in the rental sector when they are loosing money.
 
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PebbleBeach2020 said:
I thought I asked you that sane question!!!!

I think for April 2023 when estimated 5,000 landlords will have served notice on tenants and they will be evicted by June 2023, sometime has to be done or effort has to be made to reduce this as much as possible.

I think a tax break for landlords who sign up for a 2-5 years lease agreement. Or a tax break for a meaningful reduction in rent. An ability for landlords in RPZ with properties way out of kilter with rents.

I think some portion of the mortgage repayment (capital) will have to be allowable against tax. This would encourage new investment I believe.

I think certainty needs to be provided to landlords. I think SF threats of a three year rental freeze and inability to sell property with vacant possession needs to stop. It scares landlords and motivates them to leave and we need them to remain until your solution of mass supply arrives. I think SF are being found out in the polls.

Landlords are experiencing interest rates increases and an inability to increase rents by more than 2% is eroding profits and turning small profit properties into loss makers. Why on earth would landlords stay in the rental sector when they are loosing money.
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I think you are wasting your time unfortunately.
The powers that be in this country only listen to the build side mafia, getting small landlords out increases demand for their product.
Follow the money!
 
RonnieShinbal88 said:
The powers that be in this country only listen to the build side mafia, getting small landlords out increases demand for their product.
Follow the money!
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Yes, because limiting the market for you product to a few small players with much greater bargaining power always means you get a better price :rolleyes:
 
PebbleBeach2020 said:
I thought I asked you that same question!!!!
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I thought I made my opinion on that clear.


PebbleBeach2020 said:
I think a tax break for landlords who sign up for a 2-5 years lease agreement.
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There's no incentive for that with Part 4 restrictions in place.

PebbleBeach2020 said:
I think certainty needs to be provided to landlords. I think SF threats of a three year rental freeze and inability to sell property with vacant possession needs to stop. It scares landlords and motivates them to leave and we need them to remain until your solution of mass supply arrives. I think SF are being found out in the polls.
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That to me, and from the rumblings I hear are much greater factors in motivating current landlords to leave the market. No small tweaking of taxation will address that and any significant moves would be political suicide.
 
Leo said:
Yes, because limiting the market for you product to a few small players with much greater bargaining power always means you get a better price :rolleyes:
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Well if you get a fraction of the non competitive price that those small players get, via 'political donations', then that is absolutely correct.
I think you were implicitly linking the common good with what the political class want.
Not a huge amount of evidence for that historically in this country!

Edit - I misread your response, I'm not sure I follow it.
How does getting small landlords with existing properties out limit the market for builders, if that is what it refers to?
 
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RonnieShinbal88 said:
Well if you get a fraction of the non competitive price that those small players get, via 'political donations', then that is absolutely correct.
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Corporate political donations are a thing of the past in this country. They were basically regulated out of existence years ago. Today the taxpayer lavishly funds political parties.
 
RonnieShinbal88 said:
Well if you get a fraction of the non competitive price that those small players get, via 'political donations', then that is absolutely correct.
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No, it just isn't. No supplier of goods or services ever aims to reduce their market. It would be madness to do so.

RonnieShinbal88 said:
I think you were implicitly linking the common good with what the political class want.
Not a huge amount of evidence for that historically in this country!
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Really, where?

I think you've made it clear you don't know what you're talking about.

How many of our politicians are landlords, yet they keep introducing more tenant-favouring legislation and fail to give themselves tax breaks on rental income?
 
Leo said:
No, it just isn't. No supplier of goods or services ever aims to reduce their market. It would be madness to do so.
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Getting rid of existing small landlords doesn't reduce their market, it increases it.

Once supply is up they would be free to change their approach, but short term this creates demand.

It would worsen the short term situation, justifying the various incentives for builders that they have floated only yesterday for example.

Supply catches up and the market restrictions go back to normal welcoming small landlords back with open arms.

Hard luck on all the tenants evicted over the next year or two.
 
Whatever the reason is for doing absolutely nothing to help incentivise small landlords to stay in until supply can catch up (if ever), be it incompetence, malice or political careerism, I just can't see any explanation that is in the common good.

Unless you take the view that it is a lost cause and nothing can be done to convince them to stay in, without even having a discussion on it with small landlords, which again seems questionable.
 
Sorry, I missed it. Can you tell me what you would do in the next 6 months to make things better for tenants and encourage landlords to remain in the sector without yet again severely reducing supply?
Leo said:
I thought I made my opinion on that clear.
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RonnieShinbal88 said:
Whatever the reason is for doing absolutely nothing to help incentivise small landlords to stay in until supply can catch up (if ever), be it incompetence, malice or political careerism, I just can't see any explanation that is in the common good.

Unless you take the view that it is a lost cause and nothing can be done to convince them to stay in, without even having a discussion on it with small landlords, which again seems questionable.
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That is it in a nutshell. The idea of floating last summer about tax breaks for landlords and giving them nothing - equates to a kick in the teeth for existing landlords. In the budget last september, giving tenants tax breaks if they invest thousands in retrofitting and improving the energy efficiency of their properties - equates to nothing. The governemnt think landlords will invest thousands and cannot increase rent by more than 2% and cannot get vacant possession of their property, are forced into an eviction ban, are threatened with rent freezes for 3 years by SF and more - a kick in the teeth. Then this month, the minister for housing announces landlords can write off white goods against tax - hello minister, we can do that already, it isn't new - just shows he doesn't even know his brief and is a bluffer - a kick in the teeth. And the government are back kite flying again now saying something must be done about the taxation on small landlords - hang on again and we might do something.

They had their chance last September to do something meaningful and didn't did it. Landlords who subsequently served eviction notices after the budget, I think I read there are upwards of 5,000 landlords who served notices to quit to RTB which will come into effect April - June 2023, they I think will not be for turning now. More will follow.

How with their special advisors they cannot explain why they need to keep small landlords in the game is beyond me. They have given a tax break to tenants, nothing to landlords. They can be giving tenants a lot more in terms of emergency accommodation and hotel rooms in the second half of this year, because thousands upon thousands of landlords are exiting and the new entrants are a mere fraction to replace them. The next few years are going to be absolutely god awful for tenants and young people in ireland trying to find a place to live as they start out on their working career. A great motivator to emigrate from Ireland.
 
Leo said:
No, it just isn't. No supplier of goods or services ever aims to reduce their market. It would be madness to do so.


Really, where?

I think you've made it clear you don't know what you're talking about.

How many of our politicians are landlords, yet they keep introducing more tenant-favouring legislation and fail to give themselves tax breaks on rental income?
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The State is reducing the supply of rentals by their actions. It makes no sense to continue losing suppliers from the market at a time when there is such chronic under-supply. As you say it would be madness to do it but that is exactly what they are doing by their actions.

Common sense would suggest the question is how do we encourage (not force) existing supply and encourage new supply. Why would a small landlord enter the market if the treatment existing landlords is anything to go by? We have heard multiple times we need professional/corporate landlords. Well that's exactly what we are getting and it has not exactly worked out well for us to date. Do we see them charge low rents?

In fairness I would not see politicians as your common landlord. if they get troublesome tenants you can be reasonably sure they will be able to remove them quicker than the ordinary landlord by legal means of course but by availing of systems quicker than the ordinary landlord can do.
 
The Horseman said:
The State is reducing the supply of rentals by their actions. It makes no sense to continue losing suppliers from the market at a time when there is such chronic under-supply. As you say it would be madness to do it but that is exactly what they are doing by their actions.

Common sense would suggest the question is how do we encourage (not force) existing supply and encourage new supply. Why would a small landlord enter the market if the treatment existing landlords is anything to go by? We have heard multiple times we need professional/corporate landlords. Well that's exactly what we are getting and it has not exactly worked out well for us to date. Do we see them charge low rents?

In fairness I would not see politicians as your common landlord. if they get troublesome tenants you can be reasonably sure they will be able to remove them quicker than the ordinary landlord by legal means of course but by availing of systems quicker than the ordinary landlord can do.
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The 'a lot of politicians are landlords so the government would never screw over landlords' argument is obviously some very dubious logic.
 
Being morally correct in taxing rental income at 52% would be fine, but if it leads to less houses available for rent and more expensive rent - then it's wrong.

My own quick research
France: you pay tax on 50% of the gross rent (if total rent is less than 70k) - don't need to calculate expenses.
Belgium: more complicated but it's something like tax on 60% of the rent.
Germany: you can use 2% of the house value as a depreciation figure.
Netherlands: you pay the property tax (obviously higher than our LPT) on the property you're renting out not on the rent. That property tax is based on the rental value of the property - so this seems to make sense.
Sweden: you pay a flat 30% tax on rental profits.

In Ireland if there's no mortgage on a property, then for higher rate tax payers an attractive option is leaving it idle, which in Ireland despite LPT and various service charges is relatively cheap. If you were in Netherlands with higher property taxes and no rental taxes - then you'd be renting that out.
 
ashambles said:
Being morally correct in taxing rental income at 52% would be fine, but if it leads to less houses available for rent and more expensive rent - then it's wrong.

My own quick research
France: you pay tax on 50% of the gross rent (if total rent is less than 70k) - don't need to calculate expenses.
Belgium: more complicated but it's something like tax on 60% of the rent.
Germany: you can use 2% of the house value as a depreciation figure.
Netherlands: you pay the property tax (obviously higher than our LPT) on the property you're renting out not on the rent. That property tax is based on the rental value of the property - so this seems to make sense.
Sweden: you pay a flat 30% tax on rental profits.

In Ireland if there's no mortgage on a property, then for higher rate tax payers an attractive option is leaving it idle, which in Ireland despite LPT and various service charges is relatively cheap. If you were in Netherlands with higher property taxes and no rental taxes - then you'd be renting that out.
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what kickstarted the dramatic rise in headline/advertised rents in Ireland was making rental income subject to USC and PRSI. For a lot of landlords this meant the effective tax rate increased from 40% to 52% overnight. As a result, rents needed to increase by a gross 24% each month just for the landlord to not be in a worse position. The State benefitted handsomely. Landlords neither gained nor lost anything. The tenants got absolutely hammered!

What followed was RPZ, threats and the vilification of landlords. First 4% rent increases every year, then 2% rent increases every year without fail. And the introduction of REITs and institutional investors that charge (imo) far in excess of what a rental should be charging.

That is what has brought us to the current situation.
 
ashambles said:
Being morally correct in taxing rental income at 52% would be fine, but if it leads to less houses available for rent and more expensive rent - then it's wrong.

My own quick research
France: you pay tax on 50% of the gross rent (if total rent is less than 70k) - don't need to calculate expenses.
Belgium: more complicated but it's something like tax on 60% of the rent.
Germany: you can use 2% of the house value as a depreciation figure.
Netherlands: you pay the property tax (obviously higher than our LPT) on the property you're renting out not on the rent. That property tax is based on the rental value of the property - so this seems to make sense.
Sweden: you pay a flat 30% tax on rental profits.

In Ireland if there's no mortgage on a property, then for higher rate tax payers an attractive option is leaving it idle, which in Ireland despite LPT and various service charges is relatively cheap. If you were in Netherlands with higher property taxes and no rental taxes - then you'd be renting that out.
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You also need to factor in the eviction process, in France it seems to be done in around 6 to 8 months and includes the court organising a repayment schedule for all of the arrears within 36 month, and forcible removal from the property:
frenchrealestatelaw-traesch.fr

Eviction Law - Overseas Property Investments French Real Estate

Learn about eviction of a tenant for French Leaseback property, under the French law. Ask your question for free to an English speaking lawyer !
frenchrealestatelaw-traesch.fr frenchrealestatelaw-traesch.fr

The French don't mess around, they are not afraid to seize bank accounts.
 
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