FF, Housing & Landlords

Boggle

The reason prices went up was to keep the hardcore pre-deregulation taxi drivers happy, appeasement I think they call it.

So you admit that prices are artificially high because of the regulation of the market? How is this good for the consumer? (please tell me your not thinking about a career in politics!!!)

bonkey

Boggle wrote:

You dont get out much do you?? Regulation ightens markets, not the other way around!

Regulation can do both.

Boggle

Regulation can do both.

Regulation generally implies that you need permission to enter a market, which invariably deters competition. I am struggling to find an example whereby restricting access to a market has had good effects on the consumer... could you provide some examples?

SkepticOne

Boggle wrote:

Regulation generally implies that you need permission to enter a market, which invariably deters competition.

But regulation can simply mean the maintanence of quality and price and need not have anything to do limiting numbers. Somewhere along the line, vested interest groups got it into their heads that the purpose of regulation was protection against competition. The taxi drivers found out that this was not the case.

Boggle

But regulation can simply mean the maintanence of quality and price and need not have anything to do limiting numbers.

Regulation should solely deal with quality and nothing else. As long as something is safe to be sold then it should be sold - when you attempt to interfere with pricing or market entry conditions you always end up hurting the consumer.

bonkey

Boggle wrote:

Regulation generally implies that you need permission to enter a market, which invariably deters competition. I am struggling to find an example whereby restricting access to a market has had good effects on the consumer... could you provide some examples?

There's no shortage of them.

Would you suggest that we - the consumers - would be better off with a market that allowed highly flammable materials to be used in clothes? Sharp objects in kids toys? No quality-levels associated with what can, and cannot be sold as food or drink?

All of these are forms of regulation - they are the government intervening to dictate what is, and is not, permissable in a given market.

The abolition of child-labour, minimum working wage, Health-and-Safety in the workplace,etc. : These too are all examples of regulation. Would you suggest that we would be better off without them?

In terms of competition...BT had its hands tied for over a decade after de-monopolisation of the British network in order to allow competition to develop. That was regulation of the marketplace from day 1. The same approach is currently being used (although less well) with ESB. Similarly, the Monopolies Comission's very purpose is to ensure that a monopoly doesn't abuse its position in one market to gain an advantage in another....which means that the MC's job is to regulate monopolies to encourage competition.

The world is simply rife with examples of regulation being a positive for the consumer, examples of regulation being there to assist competition, and so on.

jc

jank

Aside from regulations, I strongly believe that when interest rates increase as that are forcast to do then it will be the final nail in the coffin of the housing boom. Too few people buying too many houses at huge prices. Many of these houses are miles from anywhere and are just commuter houses.

Christian_H

Boggle wrote:

I do not presume too much. This is a govt who will rape you at every opportunity. If licences came in then it is the vested interests (as per usual) who would be able to succesfully lobby and bribe the govt into doing what they wish.

Are you crazy! The TAXI market was de-regulated, i.e. No limits where placed on the amount of people who could apply for a licsence. It still has regulation regards rules of procedure & tariffs, but it is an open market for all to enter the market with an equal intial investment.

The problem that built up was that very irresponsible TAXI plate owner who know deregulation was comming very soon sold their plates at huge costs to a few stupid people who hadn't a clue. When de-regulation came in some of these people had their TAXI plates devalued by as much €75,000!!

These poor idiots had gone and gotten mortgages to pay for a public/council TAXI liscence.

The same is happening in the PUB industry, it so difficult to get a pub liscence that pubs sell for millions now. Exactly the same as did TAXi plates at one stage and just like Houses.

The general joe soap who wishes to make a few quid from renting a second home or who needs to take in lodgers to pay for his own home would suffer as renting would now become a difficult thing to do.

The only reson this "joe soap" would have difficulty affording a house is because they have just paid 300,000 or some other ridiculous price for a house.

(I buy a house and decide I want to take in tenants so I can afford to live - this should be simple and not involve me having to apply for a licence and wait the usual 1-3 years for it to come through) Also don't forget that the costs are forwarded on to the consumer.

Where are you going with these presumptions?!?! 1-3 years... do be stupid. In relaity to get a liscene it will take a matter of weeks not years.

the consumer is paying throuhg the Nose already here thus my demand to see proper and open regulation of the housing market. So your point is irrelevant.

The wealthy landowner on the other hand is not deterred from hoarding houses as they have efficient systems for this procedure. Anyway, they'd just charge a yearly admin charge.

What systems? MONEY? If you have loads of money you can borrow more and thus by more and so on... is this the magic system you talk of?

You dont get out much do you?? Regulation ightens markets, not the other way around! Pubs: artificially high prices as they are a controlled market. Taxis: Prices kept artificially high by the regulator to appease taxi drivers. Dogs: ??? What do they sell???

I do, I get out a lot. In fact I talk to hundreds of people a week. I have talked to many people o this issue and spend so little of my time virtually expousing this issue.

Yet as pointed out before the PUB sector is suffering from the same problem the TAXI sector has just been "shocked" out of overnight. There is such poor competition in the Drink sector thats its jsut not funny, agian their is a situation where a liscence has become a commodity. The home has become a commodity and this is a dangerous way of dealing with housing.

Why? Is the house going to run away? All you care about is that the house is okay .. lets face it if they decide to stiff you, you have law on your side and his bank account number so he's easily traceable.

No offence but you show complete ignorance on this issue. It is frightening how few right you have as a tenant. If you buy a TV you have more rights o recourse if things go wrong but if you rent, forget about it.. everything has to go to arbitration. Its protracted and longwinded. Over the decades so many judges have awarded judgement in favour of the landlords in
a manner that defies social logic of justice.

for e.g. Orignally, if you lived in a residence for 20 plu 1 day you had a right to remain there as a tenant for as long as you lived! (wow what security of tenure)

However if you conducted some amount of business there, perhpas you did accounts at home then. Then after 5 years you could claim permanent tenacy rights.

This issue came to court in one instance where a couple claimed that the wife did the books for the hubby at the weekend therefore they had a right to stay. Grand and dandy, but now if you look at all those pityful leases they throw at you there is a clause, indicating tha "you cannot practice or use the property in a professional", i.e so you cannot invoke the 5 year tenacy right as outlined above.

Oh there is more but I can't go into the details....

They do! They want more money, they pressure the regulator into increasing the price. As they all charge the same there is no need for competition.

WHAT???

Why fund someone to spend his days running round in circles trying to figure out if a house is being rented out. What you gonna do? Go to every licensed house and ask if they are tennants? Its ore efficient to offer everyone a minor tax break on a made up tax if they provide you of details on who owns and benefits from each property. You know the rent, the no. occupents per house, no house per landlord i.e. you have all data on file to be checked against the revenue databases... no legwork!

I'll tell you WHY!

So much of this money, billions is in the blackmarket and is not going into the tax system thus the greed and tax avoidence of the few, which turns out is so massive in value is causing us to pay higher tax and not have enough to pay for health or to infact build houses for poeple hwo need them.

19bn GDP/GNP (one or the other) a year in this country is paid in rents. If even 10% of this is going untaxed it causes a huge distortion.

Look if you want to go live in a world where the few own nearly everything and charge you for the privlege of living the go ahead! Enjoy your slavery to the wealthy but not on my watch. **** that!

Does anybody ever stop for a minute and think... WHY? Why property rights, why should people inherit so much property, why should peole be allowed to own LAND, is it not Land which underlines the strenght and security of the state its only wealth generating Asset, yet it in the hands of a private few?

Who Owns Ireland... well its not the public... its a bunch of old grubby Landowners. Thiefs... we should not repect inherited right of ownership except that of the people whom the government represents whos needs are first and not there to serve the needs of this eltiest parasites.

SkepticOne

Christian_H wrote:

Listen TAX is TAX, its not suppose to regulate social life, it is merely a revenue generating dept. to fund the giovernment who works for US... does anyone have a clue as to what we should expect from Government.

Landlords should be brought to heel throuhg regulation and liscencing. Simple as that.

Of course, if landlords are taxed (as they should be, imo, no one should be exempt), the landlords will simply up the rents by a corresponding amount. It is, of course, out of the tenants pocket that this tax will ultimately be paid.

madmorphy

I think a house price correction is definitely on the way.As others have said rents are dropping,rental prices around me are e150 pm lower than they were 12 months ago.If professional landlords start offloading houses on top of all the new supply,prices can only start dropping.
If this happens it will be the same edjits who bought eircom shares who'll be caught again,virgin landlords who recently bought second homes by releasing equity in their own home for a deposit but who have huge mortgage repayments.All because some person in the pub told them u couldn't lose,this was the same person who told u about the pyramid scheme that couldn't lose either.Remember the one where u put e1000 in and u get e7000 back,how i laughed at a girl one night who for 2 hours tried to convince me she could not lose but still couldn't tell me where the e6000 grand was supposed to come from without ripping someone she knew off.

Boggle

Are you crazy! The TAXI market was de-regulated, i.e. No limits where placed on the amount of people who could apply for a licsence. It still has regulation regards rules of procedure & tariffs, but it is an open market for all to enter the market with an equal intial investment.

Rules re tarifs = no real competition as they all charge the same. Dunno if you take many taxi's but they are extortionate, even compared to hackneys. While there are more taxi's around - there is still no competition in prices.

The only reson this "joe soap" would have difficulty affording a house is because they have just paid 300,000 or some other ridiculous price for a house.

Do you actually think a licencing system would actually change that? TWhat you propose places no barrier to large estate agents leasing hundreds of houses - the only people it would affect are the people leasing to pay for a second home or who need tenants to ppay the mortgage ... in which case it wouldn't change anything.

Where are you going with these presumptions?!?! 1-3 years... do be stupid. In relaity to get a liscene it will take a matter of weeks not years.

the consumer is paying throuhg the Nose already here thus my demand to see proper and open regulation of the housing market. So your point is irrelevant.

I love it when people dismiss points as irelevant.... Ever applied for a grant in college? Shouldn't take long, should it? I got my last years grant the summer after I finished college at which stage I was struggling to pay off a student loan as well as having had to work long hours while at college to survive.

What systems? MONEY? If you have loads of money you can borrow more and thus by more and so on... is this the magic system you talk of?

You sound like a politician anyway. You have no clue whatsoever. If you want to read the point and argue against it, please do so. Otherwise, dont be an idiot.

The home has become a commodity and this is a dangerous way of dealing with housing.

Your proposal will not go very far towards dealing with this issue. Better focus energies on dealing with the culprits. Anyone/ any company who owns 5 or more houses is in it for capital wealth. House prices are inflated by people hoarding property to keep the prices artificially high. It seems to me that a limit on the amount of property one could own would be a better approach to tackling house prices.

No offence but you show complete ignorance on this issue.... [tenants rights]

No offence, but your proposal doesn't address any of those issues. You are pushing a licensing system, to register landlords for tax purposes. While the few landlords who receive tax might feel aggrieved at being forced to pay tax, it wont deter people from letting .... and it wont ensure more money into the coffers either as it would be easier to dodge than even the current system (if used properly).

Look if you want to go live in a world where the few own nearly everything and charge you for the privlege of living the go ahead! Enjoy your slavery to the wealthy but not on my watch. **** that!

NOT ON MY WATCH!!! - I understand that you may want whats best, but in effect this proposal would make no impact whatsoever to peoples lives. Making people register as landlords and be licenced wont do very much for people. Better defined laws re housing and letting would. More efficient, cost effective systems would. Harsher penalties for landlords who abuse the law would.


Please note, in many cases you have just dismissed arguments and points you didn't like as waffle. If you are unwilling to debate something then at least dont be ignorant about it... but if you cant argue your point with some bloke bored at work then best stay away from politics mate!

RainyDay

Gurgle wrote:

I checked on this a couple of years ago (when I was thinking of buying a second house to rent out ), the tax is paid as earnings (at 42%) so the longer you have the mortgage the less of the payment is interest and more is subject to income tax.

So if the rent charged is the same as the mortgage repayments, the owner will have to make up the difference lost to tax. If house prices (and therefore rents) stop rising then as the mortgage gets older a lot of people will find it difficult to hang on to their second house.

You are missing one important point - the crazy anomoly in the current tax system whereby investors get uncapped tax relief for mortgage interest paid and home-owners have a fairly low cap (€6k iirc) on the interest relief available. This ensure that investors are able to outbid residential purchasers when they are competing for the same house, courtesy of the subsidy at the taxpayers expense.

It also means that it is the best interests of the investor to keep their mortgage interest high in order to minimise their tax bill. In fact, even when they have spare cash available to reduce their mortgage, they are better off putting this cash on deposit (at approx 2.6%) and keeping their mortgage high, as the state will pay out 42% of their mortgage interest bill via the tax relief. This is why interest-only mortgages are so popular with investors, as the state subsidises their interest bill. This needs to be addressed urgently, but I'd have little hope that the FF guys who depend on the builders to cough up their donations in the FF tent at the Galway Races will do anything useful here.

Christian_H

SkepticOne wrote:

Of course, if landlords are taxed (as they should be, imo, no one should be exempt), the landlords will simply up the rents by a corresponding amount. It is, of course, out of the tenants pocket that this tax will ultimately be paid.

We as a People have a Government, that can regulate against this and has to some extent already so if the Revenue crack down on non-declared incomes while the correct laws are in place to tackle price hiking then it works.

You see the tax as it is not VAT like all other goods but on the income declared.

So the landlord could be a doctor, have a practice perhaps 5 apartments in Dublin and a house in Spain (on a golf course, ugh)

This Doctor/Lanlord could be earing the following,

500,000 (professional practice)
72,000 (rents 5 x ?14400 per year)

---

572,000

if he only declares one house, as income then to the revenue its going to look like this,

i.e. he has only 514,400, as taxable income.

So what about the lost 57600!!!!
#
Remember that house in Spain, yeah well the rental income from one back in Ireland probably paid for this house and next years rent will go towards houses in turkey, Budapest etc etc

Just imagine if there are 200,000 rented units in Ireland.

THE MARKET OVERALL

Now lets say only 40,000 are ever declared as income and the average rent is 12,000 p/year.

2,400,000,000 (Value of Incoem from Rental sector)
- 480,000,000 (declared rental income)

---

- 1,920,000,00= undeclared income

Potentially there is 1.92 billion of undeclared taxable money floating around and slipping out of the economy and not being declared and taxed and reintroduced for the civic good.

Ok these figures are hypothectical but I think it could be somethign close to this, what is true no one actually knows what the numbers really are...

The rental sector being one that is mostly in the black avoids being properly included in informed coverage/anlysis of the housing sector, is the reason prices are artificially high.

I think the Rental market is possibly one of the largest sectors of tax non-compliance and downright lies, cloak and dagger style.... its a big story, no one covers it and when the **** hits the fan in hindsight people will discover this truth.

Gurgle

SkepticOne wrote:

Of course, if landlords are taxed (as they should be, imo, no one should be exempt), the landlords will simply up the rents by a corresponding amount. It is, of course, out of the tenants pocket that this tax will ultimately be paid.

When the rents go up too much, more renters become buyers.

eg. landlord buys a house for €300k, mothly payments are about €1200 (ish) over 30 years.
So he charges €1200 per month rent ?
Even if he pays no tax he will still be out of pocket for all repairs and upkeep.

If the current rental-tax laws were enforced, then to cover costs he would have to charge at least €1500 per month.
Many tenants would go and buy a similar house for themselves, reducing their monthly bill to €1200 (minus a pissy little bit of tax relief on a tiny portion of the interest).

Sure, there are people who will just pay the €1500. Not indefinitely though, especially as the number of houses in the country is finally approaching the number needed.

I don't see a crash coming but I think prices will slow their increase rate.

If they slow to below the national inflation figure, thats an effective decrease in the property value and over a few years will bring the prices to a more reasonable level.

Gurgle

RainyDay wrote:

the state will pay out 42% of their mortgage interest bill via the tax relief.

Correct me if I'm wrong but isn't it 20% as its tax credits now rather than tax relief ?

bonkey

Gurgle wrote:

When the rents go up too much, more renters become buyers.

Is this just an opinion, or an established trend?

Ireland's high home-ownership seems to be independant of rent cost (i.e. it was always high, whereas rent costs are only recently beginning to become extortionate).

Many tenants would go and buy a similar house for themselves, reducing their monthly bill to €1200 (minus a pissy little bit of tax relief on a tiny portion of the interest).

Nice theory, but if thats the case, then surely it will apply whether the rent is 200/month or 2000/month, based on a house costing X or 10X) and so has nothing to do with raising/lowering/maintaining prices?

Sure, there are people who will just pay the €1500. Not indefinitely though, especially as the number of houses in the country is finally approaching the number needed.

The problem isn't the number of houses in the country. If you live in Cork, would the availability of a house for you in Donegal be much use? The problem is localised supply and demand, most focussed around Dublin.


jc

Gurgle

bonkey wrote:

Is this just an opinion, or an established trend?

Purely an opinion but based on experience

bonkey wrote:

Ireland's high home-ownership seems to be independant of rent cost (i.e. it was always high, whereas rent costs are only recently beginning to become extortionate).

Recently as it the last 5-10 years.

bonkey wrote:

Nice theory, but if thats the case, then surely it will apply whether the rent is 200/month or 2000/month, based on a house costing X or 10X) and so has nothing to do with raising/lowering/maintaining prices?

Rent is always going to be directly linked to the current market value of the property. On the day its bought, the landlord's repayment costs are set (provided interest rates remain the same). If the house fails to increase in value then he can't expect to get (much)more in rent than his repayments are.

With the last decade's rate of increase, a year after you bought a house you could rent it for significantly more than your mortgage, making the whole thing extremely profitable and enticing to investors - easy cash.

If the prices stop going up, the easy cash dries up. Property would still be a great investment as a nest-egg for retirement but not much use as a cash-cow business as it is now. You would have to put money into it every month. The return in 30 years when the mortgage is paid off is still excellent in comparison to the actual amount put in but this still rules out anyone who doesn't have the extra income to put into it.

bonkey wrote:

The problem isn't the number of houses in the country. If you live in Cork, would the availability of a house for you in Donegal be much use? The problem is localised supply and demand, most focussed around Dublin.
jc

I doubt if anyone living in Cork would be looking at the Donegal Democrat for houses. The availibility of houses isn't quite that limited.

Besides, Ireland is small, people move around a lot.
I've lived in Sligo, Dublin, Cork and Meath in the last 10 years.

Victor

Boggle wrote:

Rules re tarifs = no real competition as they all charge the same.

It's a maximum tariff, I have often had drivers round down the amount from say 6.40 to 6.00

Boggle wrote:

there is still no competition in prices.

There is competition in service (especially in the corporate market).

Gurgle wrote:

Correct me if I'm wrong but isn't it 20% as its tax credits now rather than tax relief ?

No, you seem tot be wrong. The landlord would be reducing the amount of tax he pays at the highest rate, which would be typcially 42%.

Boggle

It's a maximum tariff, I have often had drivers round down the amount from say 6.40 to 6.00

I know what you are saying but in effect its a guideline price . ... i.e. its what you'll get away with charging. It could be argued that if this was removed then they would be free to increase their charges further, but you would also remove their excuse for having such a price (i.e. its a deemed acceptable price).

And while there is competition, I dont believe their is a sufficient level of comp yet to give any level of price comp. (Anyway, there's no prices on display on the exterior of the taxi to encourage comp)