Will a new property tax be imposed on investment properties?

[Complainer]

As for your 2nd point, yes, banks are far stricter in trying to get capital repayments now from property investors.there are plenty of threads here on AAM. In fact,there was a big article in just last weeks Sunday business post you may have read how permanent tsb are calling in all capital repayments now by property investors irrespective of their finances.

You miss the point. The actions being taken by one bank today are irrelevant. My point is to ask if you really want to trust the banks to act in the best interests of society on an ongoing basis? I don't trust the banks. We need proper legislative controls.

As for your third point, you are quite right in that if you have the income you pay the tax. However, if tax relief was taken away then property investors would be in negative cash flow each month and you think they should pay tax on this income even though they are making a loss? Nonsense.

This is contrary to the fundamental basis of any tax i.e. You pay out tax on any surplus cash you have after expenses.

The question is whether interest-only is a legitimate expense. It's not. It is a tax avoidance advice, designed to maximise the interest paid, and therefore the state subsidy. It is not a legitimate expense.

 

[shej]

Has the 75% relief been signalled for reduction in the 4 year plan?

Just wondering has the current 75% interest relief been signalled for reduction in the 4 year plan?

 

[Bronte]

So you're happy with the way house prices went after Bacon was abolished then?

.

Bacon being abolished didn't create the property bubble.

 

[Complainer]

Bacon being abolished didn't create the property bubble.

It certainly wasn't the only cause, but it was right up there with a number of other bubbling policies.

 

[zxcvbnm]

Just wondering has the current 75% interest relief been signalled for reduction in the 4 year plan?

No - there is no talk of this being amended.

Although i do believe that labour want to change it. Although i also think that FG are against changing it.

 

[T McGibney]

It certainly wasn't the only cause, but it was right up there with a number of other bubbling policies.

The bubble was well and truly underway by the time the Bacon package was abolished.

There is convincing evidence that the Bacon package actually fuelled the bubble between 1998 and the end of 2001, and subsequently, as it led to a spiralling of rents and abnormally high profits for landlords - especially those without mortgages. These abnormally high profits in turn fed the myths that (i) property investment was a no-brainer and (ii) properties would continue to rise in value ad infinitum. We all know where that led...

 

[zxcvbnm]

The question is whether interest-only is a legitimate expense. It's not. It is a tax avoidance advice, designed to maximise the interest paid, and therefore the state subsidy. It is not a legitimate expense.

OK - we're not gonna agree here it seems.

But suffice to say, byu your own admission you're only reason for getting this abolished is because you say it unfairly facilitates the investor who wants to take advantrage of the relief by allowing them save loads of their other cash in different accounts this unfairly taking advantage of this relief.

You're right - it does allow someone do this should they wish.
However - so few people are in a position to do it it is negligible in the extreme.
Hardly reasonable to abolish it for everyone else who have paid significant amount of property taxes already.

You may say that it is also unreasonable to expect the state to cover it instead.
Your comment of what other property taxes people have paid previously should be disregrded is also very unfair and would seem at odds with most peoples sentiments.

For example,it is for this very reason why people who have paid stamp duty are exempt from paying this new property tax for a number of years (7 years i think). (i.e. previous taxes paid are indeed considered relevant)
Everyone seems in agreement that this is equitable.

 

[gearoidc]

Complainer,

The terms under which people could invest in property were set by the State. As I have said already, they "lured" people in.
To then shut the door behind them, and change the rules of the game is immoral. No other word describes it.
You have still not given a proper explanation why landlords should go to the hassle and expense of providing accommodation if they cannot write off their expenses.

 

[Complainer]

OK - we're not gonna agree here it seems.

But suffice to say, byu your own admission you're only reason for getting this abolished is because you say it unfairly facilitates the investor who wants to take advantrage of the relief by allowing them save loads of their other cash in different accounts this unfairly taking advantage of this relief.

You're right - it does allow someone do this should they wish.
However - so few people are in a position to do it it is negligible in the extreme.
Hardly reasonable to abolish it for everyone else who have paid significant amount of property taxes already.

I'd love to see some data to support your claim that 'few people are in a position to do it'. Certainly, recent purchasers of residential property will be struggling, but I suspect there an awful lot of landlords whose mortgages are older and at modest levels, but are still maximising their interest to avail of the state subsidy.

We need to have the right policies in place, regardless of whether we are in a boom or a bust mode.

You may say that it is also unreasonable to expect the state to cover it instead.
Your comment of what other property taxes people have paid previously should be disregrded is also very unfair and would seem at odds with most peoples sentiments.

For example,it is for this very reason why people who have paid stamp duty are exempt from paying this new property tax for a number of years (7 years i think). (i.e. previous taxes paid are indeed considered relevant)
Everyone seems in agreement that this is equitable.

I'd wondering where you picked up 'most people's sentiments' and 'everyone's agreement' - was this at the Landlord society meeting? I'm not so sure at all that society as a whole wants to continue to subsidise landlords, given our extreme conditions.

Complainer,

The terms under which people could invest in property were set by the State. As I have said already, they "lured" people in.
To then shut the door behind them, and change the rules of the game is immoral. No other word describes it.
You have still not given a proper explanation why landlords should go to the hassle and expense of providing accommodation if they cannot write off their expenses.

You could make exactly the same arguement about public sector salaries, or AIB shares or whatever - that the stated 'lured' people in. We are in drastic times, and we need to cut back. Landlords should be taking their fair share of the pain.

 

[T McGibney]

Landlords should be taking their fair share of the pain.

Singling out one particular sector for unashamedly punitive tax charges is the exact opposite of ensuring that those in that sector 'are taking their fair share of the pain' in line with other sectors that are not subject to such punishment.

In relation to interest-only mortgages, I've argued for years that they are very very bad news all round - for investors, for banks and for society. Had they been banned years ago, the country and many individual citizens would not now be facing ruin.

I still believe that they should be banned for new borrowings, and phased out over a finite timescale for existing borrowers. That said this is an issue for banking regulation and not the tax system, as the latter is too blunt an instrument to be used in order to implement such radical change.

 

[zxcvbnm]

Landlords should be taking their fair share of the pain.

That's a nonsense statement.
Landlords have paid out far far more in taxes than pretty much anyone else in business as far as taxes payable to get involved in that business.

You are seriously approaching this with a complete biased view.

As i said already in a previous post, if you want to single out one business above another business for not 'taking their fair share of pain', then landlords shoudl be the last on their list.

As i said - I paid out €130k between stamp duty and VAT on 2 properties totalling €750k.
And of course i did it by choice. I have no problem with that.

But for someone to come along and say they are going to single out the business I am involved in - instead of the many other businesses out there - because I have yet to 'take my fair share of the pain' is tripe, plain and simple.
Name me one other business out there with comparable taxes that need paying as entry costs.

You clearly seem to have some agenda here and are determined on selecting whatever bit you want to suit that agenda.
Focussing in on the tiny amount of property investors that store these hordes of cash that you seem to think they have to take advantage of this tax relief (while conveiently ignoring the massive entry costs paid to the exchequer due to taxes) is an example of the blinkers you have on.

 

[gearoidc]

I'd love to see some data to support your claim that 'few people are in a position to do it'. Certainly, recent purchasers of residential property will be struggling, but I suspect there an awful lot of landlords whose mortgages are older and at modest levels, but are still maximising their interest to avail of the state subsidy.

Complainer,
Don't you see the irony in your post?
You ask for "data" and then in the same breath talk about "suspecting" what "an awful lot of landlords" are up to.

Have you any "data" to support your suspicions or are they simply a manifestation of your obvious prejudice against landlords? (By the way, your suggestion that landlord's need to take their share of the pain is off the scale in its ignorance of the facts)

And what exactly do you mean by "maximising" their interest?
How does one "maximise" one's interest???