Stance on House Prices

STaN

With all of the media attention over the past 6 months on this very subject, the issue of house prices in this nation has been described as the single biggest domestic threat to the Irish economy.

By this time last year, stamp duty was coming in at €1.68 billion according to exchequer returns. The present government therefore has a vested interest in keeping house prices high and this was followed this year by another stealth tax on buildings of €10,000.

Quote from Fine Gael:
"More and more young people are going on lengthy Local Authority waiting lists, with over a 100,000 people throughout the country having to wait anywhere up to 7 or 8 years before they have any chance of getting a home."

The fact that the government are getting UP TO 40% (reference) of the price of a house is hardly helping young people to enter the housing ladder. This could mean as much as €126,000 is taken in tax from a new house costing €280,000.

This has a knock-on effect of contributing to our culture of personal borrowing, which stands close to €70bn (of which €56.4bn is mortgage debt) according to figures from the Central Bank recently.

Are the government, be that Fianna Fáil or the Progressive Democrats seriously committed to this and therefor why do we not follow the Example of the UK, who's cut of a new house, stands at 1% (i may be corrected on that)? Another election promise broken?

Meh

Originally posted by STaN
Example of the UK, who's cut of a new house, stands at 1%

I doubt that very much. If you read the 40% article you linked, they're counting income tax and PRSI paid by the construction workers. Unless builders in the UK are magically exempt from income tax, the UK government is taking a lot more than just 1%. Also note the "up to", and the fact that the article comes from a press release by the Irish Home Builder's Association -- not exactly a neutral source.

STaN

Originally posted by Meh
Also note the "up to", and the fact that the article comes from a press release by the Irish Home Builder's Association -- not exactly a neutral source.

From YFG:
"It is now estimated that up to 45% of the cost of new house goes in taxes & levies to the government or local authorities! .... At present, we already see a number of existing taxes and levies being passed on to the end-consumer by the landowners and developers, including:
* Local Authority development levies;
* 9% Stamp Duty on the purchase of sites for housing;
* the 20% social housing quota for new developments which has become a EUR7,500 levy (EUR13,000 in Dublin) on homebuyers who don' t qualify for social housing!"

rde

First of all, does everyone -as the Home Builders Association suggest - blame builders for the price of houses? I've never heard that, nor considered it myself. YFG, being just as feckless and inane as OFG, are picking on builders because they've no credible policies to offer as an alternative to the government's. You'd think it'd be easy, but FG are like the tories in england; they do polls to find out what people don't like, then campaign on them without actually having decent policies; just headlines.

Second, one of the reasons for the increasing difficulty is the fact that most people are trying to buy houses by themselves; they're not married, so they're trying to buy it on a single income. Twenty years ago, more people were married, and two incomes were used. Forty years ago, women didn't buy houses by themselves as a rule, which effectively halved the number of people vying for the houses.

In the good old days, banks would lend three times the salary. Today, AIB have a policy of 3.5 (they did about a year ago, anyway). Taking the average salary for a 'young person' to be €28k (I pulled that figure out of my arse; I doubt it's that inaccurate), that means they could afford ahouse that cost €100k (say €120k when deposits and banks' leeway are introduced). So if Fine Gael are serious about this, let's hear how they'll half the prices of houses in Dublin without bankrupting the building sector, decimating tax receipts or eliminating social housing.

PS I've got a house. Ha ha.

shotamoose

Originally posted by STaN
the 20% social housing quota for new developments which has become a EUR7,500 levy (EUR13,000 in Dublin) on homebuyers who don' t qualify for social housing!"

Tough. If that social housing didn't come through the quota system it would have to be paid for out of general taxation. The quota system also promotes mixed communities which are generally seen as a good thing as they don't lump social housing tenants together as has been the practice in the past.

The comparison with the UK doesn't really hold up as they've got an even harsher quota system over there. In London they want half of all new housing provision to be at sub-market prices, and that translates into quotas of approximately a third on most developments.

They've got stamp duty in the UK too (higher than 1% I believe, though could be wrong on this), in fact there's a lot of complaints that the Govt is bringing in billions by leaving stamp duty thresholds unchanged. What's more, they're going to bring in a tax on the increase in the value of land when residential planning permission is granted.

shotamoose

Looks like I was half wrong about stamp duty in the UK. It's a variable rate system - 0% up to £60,000, then 1% up to £250,000, then 3% up to £500,000, then 4% for anything above that. About 15% of national purchasers pay at 3% or more.

Nuttzz

Ex Council House, Terraced in Ballyfermot €225k last month

3 Bed house with lake, 4 acres of land and 100 acres of forest in Nova Scotia in Canada €225k

if that doesnt tell you the country is gone mad what does????

Meh

Originally posted by STaN
From YFG:
"It is now estimated that up to 45% of the cost of new house goes in taxes & levies to the government or local authorities!

Again, that "up to" makes the 45% figure essentially meaningless. How many new houses paid 45% in tax? What was the average/median tax take for a new house for a first-time buyer?