And I've already expressed my approval of the UK's decision to abolish MIR back in 2000. We should have done likewise years ago.
That doesn't mean I agree with every aspect of the UK's housing policy.
Who thinks that TRS should be extended in the Budget?
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And I've already expressed my approval of the UK's decision to abolish MIR back in 2000. We should have done likewise years ago.
That doesn't mean I agree with every aspect of the UK's housing policy.
No idea, MIR never made any economic sense.
My best guess is that it's just another example of politicians using the electorate's own money to buy votes. Like FTB grants, the abolition of domestic rates, etc, etc.
Incidentally, you do realise that MIR comes out of the "public purse" don't you?
MIR didn't prevent people becoming underprivileged! If it never existed houses would simply have been cheaper and taxes would have been lower.
Tax relief for pensions comes out of the public purse also by the same logic? Better the public purse takes a small dent now than a big dent later.
If MIR never existed, would more houses would have been swept up by landlords pricing out people looking for PPRs?
Then those people have to worry about rent all their lives, including into retirement, instead of owning their own home outright.
Who is more likely to have to seek social housing, rent supplement, etc?
If there's any logic to getting rid of MIR, then it should be scrapped for landlords also.
Why do you insist on continually bringing up pensions? This thread is about mortgage interest relief. There is no connection between MIR and pensions.
If MIR never existed would more property have been acquired by landlords? Possibly but that would have just meant lower rents. From a societal perspective what maters is the cost of housing - not who owns property.
A mortgage is just money "rented" from a bank. Does it matter if you rent money from a bank or rent a property from somebody else?
MIR is only available in respect of a home loan on a PPR - landlords can't claim MIR.
Anyway, the decision has already been made to phase out MIR so thankfully this broader discussion is entirely academic.
Again - the only issue is whether the decision to extend MIR for a limited period beyond the end of this year for a limited cohort of borrowers is justified.
If MIR never existed would more property have been acquired by landlords? Possibly but that would have just meant lower rents. From a societal perspective what maters is the cost of housing - not who owns property.
A mortgage is just money "rented" from a bank. Does it matter if you rent money from a bank or rent a property from somebody else?
MIR is only available in respect of a home loan on a PPR - landlords can't claim MIR.
Anyway, the decision has already been made to phase out MIR so thankfully this broader discussion is entirely academic.
Again - the only issue is whether the decision to extend MIR for a limited period beyond the end of this year for a limited cohort of borrowers is justified.
Landlords get mortgage interest relief in that they can offset it against their tax liability. It's not 'MIR' but it is mortgage interest relief effectively.
How is that not a subsidy from one cohort of society to another, if you are so opposed to such things?
Every thing about Irish society tells me it does matter who owns property and it would not be safe to assume that more property owned by landlords would mean lower rents, as you noted earlier, ownership has dropped recently, and haven't rents gone up?
I keep bringing up pensions because it appears to me that the intention behind tax relief for pensions, and for such things as permanent health insurance, has similarities in intention to that behind MIR. And I've heard the same arguments made against tax relief for pensions, it's regressive, it's a subsidy from people without means to those with means... and those arguments are refuted by the idea that it makes sense to encourage citizens to engage in prudent fiscal behaviour. A carrot rather than a stick.
I'm making the same argument for MIR. Now maybe you don't think that in practice MIR achieves what pension tax relief achieves.
But that is a question of effect in practice. I am arguing at least for the same intended design.
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No landlords do not get MIR.
Landlords can indeed deduct certain legitimate business expenses in calculating their taxable profits. Prior to 2009 they could deduct 100% of their interest payments in calculating their profits - just like any other business.
The proportion of home owners has certainly fallen but that doesn't mean that housing supply currently meets demand. Hence, house prices and rents are rising.
I'm perfectly happy to discuss whether granting tax relief on retirement savings is justifiable on an appropriate thread but can we just stick to the subject matter of this thread here - i.e. whether there is any justification for extending MIR beyond the end of this year?
The decision to phase out MIR has already been made. The Government has already recognised that in a constrained market a demand-side support such as MIR simply increases the cost of housing - in other words, it makes no economic sense.
Now, can you justify the extension of MIR beyond 2017 for a limited cohort of borrowers?
Landlords can indeed deduct certain legitimate business expenses in calculating their taxable profits. Prior to 2009 they could deduct 100% of their interest payments in calculating their profits - just like any other business.
The proportion of home owners has certainly fallen but that doesn't mean that housing supply currently meets demand. Hence, house prices and rents are rising.
I'm perfectly happy to discuss whether granting tax relief on retirement savings is justifiable on an appropriate thread but can we just stick to the subject matter of this thread here - i.e. whether there is any justification for extending MIR beyond the end of this year?
The decision to phase out MIR has already been made. The Government has already recognised that in a constrained market a demand-side support such as MIR simply increases the cost of housing - in other words, it makes no economic sense.
Now, can you justify the extension of MIR beyond 2017 for a limited cohort of borrowers?
It's not a business expense though, because they are acquiring an asset along the way, it's a different category to paying for an accountant. But we can save that argument for another thread.
I have been justifying the extension of MIR beyond 2017 for a limited cohort of borrowers. This should have been the predule to the extension of MIR to further borrowers and the removal of FTB grant. But the government has made mistakes in the past and will make mistakes in the future - we can disagree on which category this one falls into.
Arguments have been made against this extension such as "why should non-homeowners subsidise homeowners" or "it's regressive".
I have argued, with reference to pension tax relief, that these are not sufficient arguments against a public policy.
That's why it is justified to reference pensions in this thread, and it can be justified for a government to engage in seemingly regressive policies such as pension tax relief and mortgage interest relief in order to encourage prudent fiscal behaviour.
Obviously, you are not convinced mortgage interest relief encourages prudent fiscal behaviour. I do.
I think I've made the case for it as well as can be made, referencing other examples of such public policies.
Sorry I've read back through the thread and I can't find your justification for extending MIR beyond the end of 2017 for a limited cohort of borrowers.
Could you re-state your justification for this extension without re-introducing a host of unrelated issues?
The topic of the discussion is a particular instance of tax relief.
Referencing what other tax reliefs are available, and their justifications, is 'germaine' to such a discussion.
gnf_ireland
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I am not an expert in the area, and will not claim to be one, but I do know that each and every cohort of PPR purchasers avail of the effects on government housing policy decisions differently. It is constantly changing and some benefit more than others from the various changes
For a good period prior to 2011, FTB were exempt from stamp duty, whereas subsequent buyers were penalised much higher
From 2011, everyone paid a standard 1% across the board
For a period of time, purchasers of property were exempt from LPT for a number of years (cannot remember the exact dates)
For others it was the availability of Mortgage Interest Relief
Now it is the Help to Buy scheme
All of these initiatives are ultimately to encourage people to make provisions for the future and target specific groups of people. However, everyone who avails of this relief could be classified as 'more well off' as they are in a position to purchase a property in the first instance.
My view is all of these initiatives ultimately raise the price of property, so they should all be abolished and all incentives should be banned permanently. The only incentives which should be permitted is those that reduce the price of property, or increase the available supply - e.g. reducing VAT on newly built homes or reducing development fees.
The only big difference I see with MIR over the others is most of the others were clear once off benefits, so extending them to benefit the same people was not an option. I cannot imagine a scenario where people would be too happy if the LPT exemption was extended for that group
For the record, I avail of MIR having purchased in 2011, but I consider it my offset against having to pay 1% stamp duty as a FTB
Can I come up with a valid reason to extend it other than its nice to see something back from the government - sadly I cannot !
PS: I do agree that the government does and should have incentives people to act in a responsible manner and reduce the need for future costs on the public purse. However, I do think the tax relief on pensions up to 2m is way too high and should be around 1.2m - allowing for a lump sum payment and a pension roughly equal to the average industrial wage.
For a good period prior to 2011, FTB were exempt from stamp duty, whereas subsequent buyers were penalised much higher
From 2011, everyone paid a standard 1% across the board
For a period of time, purchasers of property were exempt from LPT for a number of years (cannot remember the exact dates)
For others it was the availability of Mortgage Interest Relief
Now it is the Help to Buy scheme
All of these initiatives are ultimately to encourage people to make provisions for the future and target specific groups of people. However, everyone who avails of this relief could be classified as 'more well off' as they are in a position to purchase a property in the first instance.
My view is all of these initiatives ultimately raise the price of property, so they should all be abolished and all incentives should be banned permanently. The only incentives which should be permitted is those that reduce the price of property, or increase the available supply - e.g. reducing VAT on newly built homes or reducing development fees.
The only big difference I see with MIR over the others is most of the others were clear once off benefits, so extending them to benefit the same people was not an option. I cannot imagine a scenario where people would be too happy if the LPT exemption was extended for that group
For the record, I avail of MIR having purchased in 2011, but I consider it my offset against having to pay 1% stamp duty as a FTB
Can I come up with a valid reason to extend it other than its nice to see something back from the government - sadly I cannot !
PS: I do agree that the government does and should have incentives people to act in a responsible manner and reduce the need for future costs on the public purse. However, I do think the tax relief on pensions up to 2m is way too high and should be around 1.2m - allowing for a lump sum payment and a pension roughly equal to the average industrial wage.