Will a new property tax be imposed on investment properties?

Maggs065

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Hi,

Maybe the above is a naive question, but since we are already paying a property tax and tax on our investment property, will we also be subject to the proposed new tax?

If so, do you think this will reflect a rise in rental rates?

Cheers,
Maggs
 
I've wondered about this also, wouldn't be surprised if there was another tax imposed but I don't think that rent increases are an option. We reduced the rent last year for our tenants & as long as it covers the mortgage & related charges we're happy enough. Though how long this will continue - who knows. We aren't major landlords just 1 property which I though would compensate for me not having a pension - stayed at home with the kids when they were small. If we sold now (if it would even sell) we would be very lucky to clear the mortgage. Still, it was our decision & we have to live with it.
 
I would say that a tax on Investment residential properties and Investment Commercial Properties will come into play. An easy and correct tax in my opinion, but then no doubt others will doubt this.
 
I would say that a tax on Investment residential properties and Investment Commercial Properties will come into play. An easy and correct tax in my opinion, but then no doubt others will doubt this.

Do you mind me asking why you think so?

I'm not a landlord myself but I see large numbers of commercial and residential landlords in serious financial difficulties and I'm dismayed that there seems to be an appetite out there to screw them to the wall altogether.
 
I do not believe that there is any desire to screw people to the wall altogether. However if a property tax had of being brought in around four years ago. it would have taken the heat out of the market. Property was a drug in this country and in the words of a High Court Judge, we all becamed property Junkies. Until the market has lost the unprofessionals in the market, both agents and purchasers and Financial Institutions, then the property market can rebuild itself. If placing a Tax means the start of a clean up, well and good. Otherwise there is nothing more pathetic than watching amateurs really screw a market and in this case persons that empty their pockets to satisfy the greed of others.
 
I've wondered about this also, wouldn't be surprised if there was another tax imposed but I don't think that rent increases are an option. We reduced the rent last year for our tenants & as long as it covers the mortgage & related charges we're happy enough.

Unfortunately I have to supplement my mortgage payment by €250/month. I've calculated that my 'investment' property costs up to €6000/year and am nervous about a new tax.
I'm a reluctant landlord - having got married recently and moved in with my husband. I think there are alot of landlords like me out there that are renting out their former PPR.
 
Maggs065 - there are many people in your position, I think I stated why we became landlords - to give me some kind of money at retirement - so if I lose out it's because I was lulled into a false sense of security & obviously didn't know enough about the country/world economic factors which could come into play. That's my fault - but I think we were all "guilty" of being naive. It was all made so easy to borrow & I do really have sympathy for people like yourself who thought they were doing the prudent thing by buying a house before they were priced out of the market. We live & learn I suppose - but do we really? I'm concerned that if all the facts do not come out regarding what happened here it will all happen again. I'd agree with Mercman a property tax on rented property would have probably slowed down the market - along with other factors which could have been put into play - spilt milk!
 
Until the market has lost the unprofessionals in the market, both agents and purchasers and Financial Institutions, then the property market can rebuild itself. If placing a Tax means the start of a clean up, well and good. Otherwise there is nothing more pathetic than watching amateurs really screw a market and in this case persons that empty their pockets to satisfy the greed of others.

You're entitled to your opinion, that said the above sounds a bit too Malthusian for my tastes. I'm not sure whether a modern democracy should seek to systematically engineer the financial impoverishment of a minority element of its population - especially as retrospective punishment for a supposed 'crime' that never existed in the first instance.

The irony that the 'crime' in question was actively encouraged, facilitated and incentivised by the same State apparatus that now seeks to mete out this punishment (and has already started doing so) is beyond satire.
 
The irony that the 'crime' in question was actively encouraged, facilitated and incentivised by the same State apparatus

Encouraged Yes, Incentivised (with tax incentive schemes) Yes, but not facilitated. The Banks did this in a completely reckless manner which if the Senior Management and Middle Maqnagement had of taken cognisance of what they were doing, it would have been stopped. Instead, the Bonuses were paid for crazy lending and allthough the loans have gone pear shaped, none of the bonuses have been recalled. But before we all get into a rhetoric about blaming the Government, does anyone really believe that the opposition would have done anything different -- Not in a month of Sundays.
 
Expect the tax relief on mortgage interest to be reduced or eliminated. Maybe if they had listened to Bacon in the early part of the decade, the prices wouldn't have got so crazy.
 
The time to tax landlords/investors is gone IMO - should have been done 5-6 years ago to discourage investors from buying.
 
Encouraged Yes, Incentivised (with tax incentive schemes) Yes, but not facilitated. The Banks did this in a completely reckless manner which if the Senior Management and Middle Maqnagement had of taken cognisance of what they were doing, it would have been stopped. Instead, the Bonuses were paid for crazy lending and allthough the loans have gone pear shaped, none of the bonuses have been recalled. But before we all get into a rhetoric about blaming the Government, does anyone really believe that the opposition would have done anything different -- Not in a month of Sundays.

Facilitated? -yes definitely, by the 'see no evil hear no evil' attitude of the State to the unsustainable credit boom, typified by the Financial Regulator, David Begg & friends on the Central Bank board and Bertie 'might as well commit suicide' Ahern.

Note that you are blaming the banks but now proposing to screw others (ie their customers) for the banks' misdeeds.
 
Well I would say screw the Banks but they are broke. Accordingly in a democracy you simply cannot have Government interfere is Private business or Enterprise. Maybe they should jump to the shouts of the non professional property owners and re introduce Rates, and this will then sort matters without gripe.
 
Expect the tax relief on mortgage interest to be reduced or eliminated. Maybe if they had listened to Bacon in the early part of the decade, the prices wouldn't have got so crazy.

Why should one sector of business be singled out for special treatment on interest on loans for premises? If this is brought in it would be so as to increase the tax take -therefore should this approach not be applied to all businesses? It would appear as it is that restricting it to 75% is already unfair-when compared to other businesses with loans on premises.
Surely this will lead to lots of defaults from landlords struggling? Just a point...
 
Why should one sector of business be singled out for special treatment on interest on loans for premises?
Because people live in those premises. We're a society first, and an economy second. Housing is a critical service.

If this is brought in it would be so as to increase the tax take -therefore should this approach not be applied to all businesses? It would appear as it is that restricting it to 75% is already unfair-when compared to other businesses with loans on premises.
Certainly, relief on unlimited interest on interest-only property investments should be stopped, as this is simply a tax avoidance device.

Surely this will lead to lots of defaults from landlords struggling? Just a point...
Cutbacks in social welfare, public sector pay and increased taxation will all lead to additional defaults from struggling house-owners too. Do we defer these measures too, or are landlords expected to be immune?
 
Because people live in those premises. We're a society first, and an economy second. Housing is a critical service.

Indeed, but I can't fathom how the State's imposition of special taxes and other charges on landlords is supposed to help their tenants.

If a landlord goes bankrupt, has their property repossessed, or is forced to sell the property, their tenants will also suffer amid the ensuing disruption.

The fact that one person's 'investment property' is another person's home is the precise reason why the State should tread very carefully.
 
Indeed, but I can't fathom how the State's imposition of special taxes and other charges on landlords is supposed to help their tenants.
It is really a case of removing a relief rather than imposing a charge, though I understand the net effect is the same. In the long term, this will reduce the still-inflated property prices, which will be passed on to tenants as reduced rent.

If a landlord goes bankrupt, has their property repossessed, or is forced to sell the property, their tenants will also suffer amid the ensuing disruption.
Indeed there is some disruption, though the impact on a tenant is fairly marginal. The longer term benefit to the tenant is reduced property and rental prices.
 
Being served with a notice of summary eviction from one's home within one month to facilitate vacant possession hardly counts as 'marginal disruption' for any tenant. In my view, any measure that erodes tenants' security of tenure is to be deplored.

Although JM Keynes once said 'in the long run we are all dead', you may be correct in concluding that higher landlord taxes will eventually help depress house prices and rents.

That said, the last time such measures were tried (March 1998 to December 2001, following the Bacon Report) rents went through the roof, only to fall when these measures were scrapped in December 2001. Who was it said that the recipe for failure is doing the same thing again and again while expecting a different result?
 
That said, the last time such measures were tried (March 1998 to December 2001, following the Bacon Report) rents went through the roof, only to fall when these measures were scrapped in December 2001.

That's not surprising - removing incentives/imposing taxes on landlords has the effect of reducing the supply of rental properties, which leads to increasing rents:)

Something like that is happening in Britain now, as it is simply too difficult for landlords to get a buy-to-let mortgage and a lot of landlords sold in the last year or so (those who didn't really want to be landlords, just couldn't sell their house, so had rented it instead). So those landlords that are still there are able to charge higher rents as a result.
 
I think it was Nationwide who said this week that 50% of investment property mortgages were in arrears. If the amount of interest relief on mortgages is lowered again or a charge is added to the property this will drive more landlords into arrears.

Many people in this country thought that a property would become or enhance their pension. Many private sector workers struggle to fund an adequate pension. Most landlords who got into it for these reasons are not fatcats themselves but are just hoping they can hang on to their property and not default on the mortgage payments. Being a landlord is not a crime or wrong - many people made an investment decision based on the tax rules and regulations at the time.

If the government can change the rules on the amount of tax relief available on an investment property (which it has, and will probably do again) why can't they come along and say - all the tax relief you thought you were getting to fund your pension is wiped off the board. Tough luck and you can trust nothing in this country. It's a very bad precendent.
 
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