First time buyers, if you have owned a house abroad?

Webbs

I know the wording on regards 1st time buyers is that if you have owned a house abroad you cannot be regarded as a 1st time buyer in the Irish market (which is another example of the rip off nature of the housing market).
But my question is, has anyone omitted to tell the mortgage people etc that you have previously owned abroad and has anyone had an issues with this?

Raskolnikov

Webbs wrote:

I know the wording on regards 1st time buyers is that if you have owned a house abroad you cannot be regarded as a 1st time buyer in the Irish market (which is another example of the rip off nature of the housing market).
But my question is, has anyone omitted to tell the mortgage people etc that you have previously owned abroad and has anyone had an issues with this?

What you're proposing is tax evasion, if you go ahead with buying in Ireland declaring you're a first time buyer and get caught you'll be liable for a lot of money. As for getting away with it? Well, the Irish revenue won't have ready access to foreign land registries so they won't know you have your name on property deeds elsewhere. However, I imagine they would have access to Irish mortgage records. So if you used an Irish mortgage broker to purchase abroad, revenue will have access for that record.

bbbbb

Yes, it's not a case of "forgetting to mention". You will be making a (false) declaration to the revenue that you are a first time buyer. You've probably seen how off-shore bank accounts caught up with people, sometimes decades later.

dochasach

Yet another subtle, but effective way the government discourages immigrants from getting a permanent foothold here. How to create a permanent underclass? It's simple, just put Polish and Bulgiarian immigrants who once had a couple thousand quid in equity on a house in their homeland in the same stamp duty category as property cartels who made millions by pricing Eastern European and Spanish FTBs out of their home markets.

- Ah but we were persecuted by our landlords for 800 years, it's our turn right?

Cantab.

Webbs wrote:

I know the wording on regards 1st time buyers is that if you have owned a house abroad you cannot be regarded as a 1st time buyer in the Irish market (which is another example of the rip off nature of the housing market).
But my question is, has anyone omitted to tell the mortgage people etc that you have previously owned abroad and has anyone had an issues with this?

The air of entitlement and cute-hoorism surrounding your post is typical of the kind of attitude that will bring this country down.

Calina

Webbs wrote:

I know the wording on regards 1st time buyers is that if you have owned a house abroad you cannot be regarded as a 1st time buyer in the Irish market (which is another example of the rip off nature of the housing market).
But my question is, has anyone omitted to tell the mortgage people etc that you have previously owned abroad and has anyone had an issues with this?

So effectively, your question is this: has anyone tried to evade stamp duty liabilities and benefit from preferential tax relief by lying to the Revenue Commissioners about this, and did they get away with it?

Personally I didn't own property abroad, but it wouldn't even occur to me to be as dishonest as to lie about it if I did.

Zambia

sounds like you have an answer to your question

If you buy abroad
Get the mortgage abroad.
Plus have an explanation as to where the deposit went from your bank(gambling)
Be sure not to leave a payment from your account going abroad left lying about. So rent the property to pay for the mortgage.
Keep your mouth shut

I dont see how they could get you , you rotten tax evading sponger :cool:

Cantab.

But my experience is that stamp duty evasion is rampant in Ireland. I even know of two of my acquaintences who recently bought 'investment' property here in Ireland as FTBs and live abroad. They're quite open about this fact and seem to be able to get away with it. There's little or no incentive for them to own-up - the worst that can happen is you'll have to pay the SD and get a slap on the wrist from Revenue. You won't even risk getting a criminal record. Going by recent years, you'll have made so much money from capital appreciation, that a small fine from revenue won't make much of a difference. I don't know if Revenue will ever get the means or the motivation to persue all these tax evaders. The country relies so heavily on the construction industry that any small measure (by way of casting a blind eye) certainly helps to prop up an ailing market.

hmmm

Zambia232 wrote:

I dont see how they could get you , you rotten tax evading sponger :cool:

It's going to be hilarious when he finds out that tax authorities share information these days. Tax evasion being a criminal offense, plus penalties and tax should make for an enjoyable time of his life when he receives "the letter" from Revenue.

A small example.

Zambia

hmmm wrote:

It's going to be hilarious when he finds out that tax authorities share information these days. Tax evasion being a criminal offense, plus penalties and tax should make for an enjoyable time of his life when he receives "the letter" from Revenue.

A small example.

To avoid this hiliarious occurence best you buy in someone elses name...or not in the EU.

conor_mc

dochasach wrote:

Yet another subtle, but effective way the government discourages immigrants from getting a permanent foothold here. How to create a permanent underclass? It's simple, just put Polish and Bulgiarian immigrants who once had a couple thousand quid in equity on a house in their homeland in the same stamp duty category as property cartels who made millions by pricing Eastern European and Spanish FTBs out of their home markets.

- Ah but we were persecuted by our landlords for 800 years, it's our turn right?

Sorry mate, but our government discriminates against returning Irish emigrants and eastern European immigrants equally.

Oh, and those who had to sell their houses in Mayo to move to Dublin, say.

Or people who need a larger house, or maybe a home nearer a new job?

Lets face it, stamp duty sucks, but to say it's there to help keep immigrants down is blatant rubbish!

The_Conductor

dochasach wrote:

Yet another subtle, but effective way the government discourages immigrants from getting a permanent foothold here. How to create a permanent underclass? It's simple, just put Polish and Bulgiarian immigrants who once had a couple thousand quid in equity on a house in their homeland in the same stamp duty category as property cartels who made millions by pricing Eastern European and Spanish FTBs out of their home markets.

- Ah but we were persecuted by our landlords for 800 years, it's our turn right?

Not so. The vast majority of most immigrants/migrant workers have never owned property abroad. In most cases they either rented, or more commonly, lived with their extended families until they chose to migrate/immigrate (mostly for economic reasons). So the vast majority of them benefit in the same manner as an Irish FTB.

dochasach

conor_mc wrote:

Sorry mate, but our government discriminates against returning Irish emigrants and eastern European immigrants equally.

Oh, and those who had to sell their houses in Mayo to move to Dublin, say.

Or people who need a larger house, or maybe a home nearer a new job?

Lets face it, stamp duty sucks, but to say it's there to help keep immigrants down is blatant rubbish!

I agree this one wasn't designed to keep immigrants down but it is conveniently effective at doing just that. Unlike returning emigrants, most East European immigrants don't have Irish parents willing to mortgage their home to give FTBs an under-the-table leg up. Most non-Irish immigrants aren't bold enough to risk stamp duty evasion (and the possibility of being deported.) I do agree with your point on those having to move from Mayo to Dublin and I hope we can agree that we desperately need stamp duty reform to discourage using housing as gambling chips and encourage using housing as homes.

The 250,000 empty homes should face full stamp duty, regardless of price or when they were built by whom. With rare exception they are all vacation homes, speculative homes, or held back inventory from a developer cartel. They are a waste of public resources. I'd tack on an annual fallow land windfall tax on appreciation, but I suspect the days of significant appreciation are behind us. Also tax cleared developable non-farm land unless it meets some sort of sustainable biosphere standard that is in the public interest.

Owner-occupied homes should be taxed at a rate proportional to the ratio of square meters to family size. Scrap the free stamp duty for new homes, that's an obvious giveaway to developers which will leave first time sellers in tears when things start to go pear-shaped with the Irish property market. Imagine trying to sell your house in a stagnant market when a builder can sell an identical one for at least 9% less and still break even.

Landlords who register should not pay stamp duty. They are providing a service and should only be taxed on income.

Foreign property owned by Irish should be liable to full stamp duty. I realize this would be difficult to enforce but should be possible within the E.U. The Spanish, Hungarian and Bulgarians priced out of their home markets should be happy to do something to discourage rampant speculation on their soil.

Alternatively, since people expect schools, roads and public other infrastructure to be maintained, an annual tax. This would be the only sustainable source of property revenue when the bubble winds down.

The_Conductor

dochasach wrote:

The 250,000 empty homes should face full stamp duty, regardless of price or when they were built by whom. With rare exception they are all vacation homes, speculative homes, or held back inventory from a developer cartel. They are a waste of public resources. I'd tack on an annual fallow land windfall tax on appreciation, but I suspect the days of significant appreciation are behind us. Also tax cleared developable non-farm land unless it meets some sort of sustainable biosphere standard that is in the public interest.

What this would encourage is a form of temporary "house sitting" which was discussed previously in this forum.

dochasach wrote:

Owner-occupied homes should be taxed at a rate proportional to the ratio of square meters to family size. Scrap the free stamp duty for new homes, that's an obvious giveaway to developers which will leave first time sellers in tears when things start to go pear-shaped with the Irish property market. Imagine trying to sell your house in a stagnant market when a builder can sell an identical one for at least 9% less and still break even.

Thats a nice way to try to encourage a more lax approach to family planning.....

dochasach wrote:

Landlords who register should not pay stamp duty. They are providing a service and should only be taxed on income.

Why discriminate against owner-occuppiers. They too are supplying a service, to themselves, and thus generate no taxable income in the transaction and should not pay stamp duty. You could similarly argue that people who plant their own vegetables are supplying a service to themselves, and as they generate no income should not be taxed. Treating Landlords differently from any other buyer is perpetuating a myth that there is a fundamental shortage of property and landlords should be encouraged to speculate in the market (one of the reasons there are so many tax-dodge vacant properties lying vacant the length and breadth of the country).

dochasach wrote:

Foreign property owned by Irish should be liable to full stamp duty. I realize this would be difficult to enforce but should be possible within the E.U. The Spanish, Hungarian and Bulgarians priced out of their home markets should be happy to do something to discourage rampant speculation on their soil.

Errr- foreign property owners do pay all local taxes, including stamp duty, where the asset is located. In most cases these taxes and duties are at levels vastly above those a local resident (or after a Spanish court case taken by a UK ex-pat- "those ordinarily resident for tax purposes") would have to normally pay. It is quite successful. Look at Praia-del-Rei and some of the more exclusive Portuguese developments- they are largely owned by nationals rather than ex-pats, a welcome development I might add.

dochasach wrote:

Alternatively, since people expect schools, roads and public other infrastructure to be maintained, an annual tax. This would be the only sustainable source of property revenue when the bubble winds down.

There is an annual tax (several of them actually) that are supposed to pay for schools, roads and other public infrastructure. For roads we have road tax (shortly to be reformed to take into account carbon emmissions), for all other central expenditure there are the myriad of taxes and charges, most notably of which is income tax. Ireland leads the EU in proposing and implementing stealth taxes- what you are proposing is simply another one. Its a manner of how to rob Peter to pay Paul. It doesn't matter how you do it- its a cash transaction of removing money from the public to pay for certain expenditure.

What we did have previously was a form of property tax (and this is what they have in the UK) whereby an annual (council) tax based on the value of the property is levied automatically to pay for the public services one expects. Commentators are unaminous that this *will not* come back in Ireland (I think the early 1980's loom large in a lot of people's memories).

The way that a lot of the larger estates (think Johnstown and many others around the country) ended up in public hands was through crippling property taxes and death duties. It reached the stage when it was easier to hand over the keys to the tax man than to try to somehow mortgage the family silver. Those were bad days- I've seen a lot of the documents and case files detailing the deals that various families made with the Irish government. We really do not want to go backwards in time.......

Zambia

Why oh why would you want to pay rates.

Rates can and do go up at the goverments say so , its not nice to have a bill that you cannot reduce for the life of the Property. Its like owning your house and still paying rent.

Its fair to say though every time i have seen a scrapping of stamp duty those house in the band go up in price by the amount of stamp.

dochasach

smccarrick wrote:

What this would encourage is a form of temporary "house sitting" which was discussed previously in this forum.

Since when has the fact that a law is unenforcable, unenforced or preferentially enforced (ahem) stopped anyone from making the law? You must be new here ;-)

That being said, you could probably track the number of homes per person and create a steeply progressive stamp duty to discourage punters from buying 80 empty properties as "a sure thing." Owner occupied house, no stamp duty, 2nd, 9%, 3rd 18%... (Yeah, I know people will max out their speculative power by buying apartments in an up-and-coming part of outer nowhere in the names of their wife, kids and dog, refer to my earlier response about unenforcable laws.)

Why discriminate against owner-occuppiers.

Not really, don't landlords usally have to pay income tax on rental income? Assuming the government isn't entirely a black hole, doesn't that tax eventually come around to reduce the need for stamp duty? In any case a steeply progressive stamp duty to discourage speculation would either raise enough money that no owner-occupier would have to pay stamp duty or it would dampen the speculative rise in price so that owner-occupiers aren't priced out by speculative empty-house-sitters.

Treating Landlords differently from any other buyer is perpetuating a myth that there is a fundamental shortage of property and landlords should be encouraged to speculate in the market (one of the reasons there are so many tax-dodge vacant properties lying vacant the length and breadth of the country).

O.K. I'm with you here.

Errr- foreign property owners do pay all local taxes, including stamp duty, where the asset is located.

Yes, I know that, but all too often they avoid income and capital gain taxes here and where the asset is located. It would be far easier to collect a one time foreign investment property stamp duty than it would be to collect income taxes, unless E.U. trans-border financial reporting improves.

In most cases these taxes and duties are at levels vastly above those a local resident (or after a Spanish court case taken by a UK ex-pat- "those ordinarily resident for tax purposes") would have to normally pay. It is quite successful. Look at Praia-del-Rei and some of the more exclusive Portuguese developments- they are largely owned by nationals rather than ex-pats, a welcome development I might add.

I'm with you here!

There is an annual tax (several of them actually) that are supposed to pay for schools, roads and other public infrastructure. For roads we have road tax (shortly to be reformed to take into account carbon emmissions), What we did have previously was a form of property tax (and this is what they have in the UK) whereby an annual (council) tax based on the value of the property is levied automatically to pay for the public services one expects. Commentators are unaminous that this *will not* come back in Ireland (I think the early 1980's loom large in a lot of people's memories).

Well when the property churn associated with rapid changes in immigration patterns and subsequent speculation stops, where is the money going to come from? Carbon tax could help but if you make it high enough to really make a difference,industry will begin leaving Ireland. Industry will go to non-Kyoto countries (e.g. the U.S.) or to Kyoto signatories with an exemption from carbon targets (e.g. China, India) or Kyoto signatories benefiting from the fact that their target baseline was set when their industries were particularly carbon unfriendly. (e.g. Russia and eastern europe) I'm not happy with the fact that an annual property tax will probably be necessary soon. I've also seen cases where elderly people must remorgage a paid off home to pay rising property taxes. But I don't see an alternative unless the government is willing to be more efficient (heh), or if they can somehow keep this bubble going to infinity and beyond. I'm surprised they haven't already noticed a drop in stamp revenue with so much new property exempt and so much existing property sitting on the market for months.