Property tax...This will be popular

10000maniacs

Property tax on a property on which you pay your mortgage using capital that you have already paid PAYE, PRSI and Levies and you have already paid stamp duty and your bank owns most of.
Sounds like it will go down a treat coming up to Christmas.:D

Hagar

Waits for Leitrim Lad to tell us "It's for your own good."

turgon

Waits for Leitrim Lad to tell us "Its not like the opposition could possibly do any better."

techdiver

Popular - NO
Inevitable - YES

I think we have had it too easy for many years and now we are starting to realise how people in other countries take such taxes as a given. The low (direct) tax economy we lived in is gone. It was unsustainable and we need to realise that the likes of the last 10 years will never happen again...

gandalf

Again I have no problem paying taxes once the unnecessary wastage of taxpayers money has been addressed.

Dr Galen

agreed. The low taxes of the past 10 years are gone. Rightfully so too. We can't have it all ways. If we want to run a social democratic style government with all the investment in public infrastructure that it involves, then we need to pay for it somehow.

Our only hope is that the Commission on Taxation gets it's act together soon and produces a radical reform policy on all taxes.

Sleepy

Well, you could look at it as a tax on wealth for those who bought their houses when prices were realistic and a tax on stupidity for those who bought during the bubble...

silverharp

ok so let me get this straight , taxpayers want to save now that times are not so good , the gov increases taxes so that the state sector doesnt have to live within its means , so now the taxpayer will cut back even more and more private sector jobs will go. that makes perfect sense carry on:rolleyes:

mike65

Only properties or incomes above a certain level with get hit - or second homes/caravans/mobiles (hey thats an idea!).

fricatus

If it does come in, it should be based on the property's market value averaged out over time, and should be discounted according to how much time is left to run on the mortgage.

10000maniacs

I cannot believe what I am hearing here.
If you buy a property for €300,000 tomorrow, you will have to have earned €500,000+ in real terms by the time your mortgage is paid off to pay for it not counting the mortgage interest rate. Thats before property tax is introduced.
This is all very fine if the property value is increasing by 7-10% year in year out. Well its not anymore.
Property tax is Triple taxation.

NewDubliner

fricatus wrote: »

If it does come in, it should be based on the property's market value averaged out over time, and should be discounted according to how much time is left to run on the mortgage.

Or based on the square footage.

Some high-market value houses are near cities and the value reflects the short commutes. A tax based on MV would favour long-distance commuters.

DadaKopf

Yes, taxing property should incorporate spatial incentives to create more sustainable communities. Beyond that, I support wealth taxes because it's a fact that failure to redistribute on basis of wealth in addition to income concentrates wealth among the few. Inequality is possibly more corrosive to society as a whole than poverty, provided certain basic material and social conditions are assured.

Property taxes (not based on market value) or local rates would be a bonus for local democracy, as it would return resources to local authorities that were stripped in the 1970s. That's assuming central government will allow local and regional government to be just that - local democratic government. But it won't, and so in this dysfunctional context, such justifications for property taxes/rates are found wanting.

SEPT 23 1989

Bring in a property tax but lower council rates which are crippling SME's

gurramok

NewDubliner wrote: »

Or based on the square footage.

Some high-market value houses are near cities and the value reflects the short commutes. A tax based on MV would favour long-distance commuters.

Not fair. There are old communities in inner city Dublin mainly inhabited by old folks/working class poor who should not be penalised because of their location.

Using a means test property tax on square foot would be fairer.

Manach

I'd be against property tax on a person's home residence. Keep the tax rates as they are so as money goes from the taxpayer goes to the taxpayer when it is spent, and not on a government program which may or may not be of benfit to the public.

jimmycrackcorm

At least there is precedent - anybody who is in an apartment block pays a property tax in the form of a "management fee".

Hookey

jimmycrackcorm wrote: »

At least there is precedent - anybody who is in an apartment block pays a property tax in the form of a "management fee".

Property tax would be on top of that.

To be honest I'm amazed there's no property tax already. I own a not particularly large flat in London and the Council tax on that is over £1000 a year. Since a housebuilding boom is what grew the Celtic Tiger in the first place, it seems logical to tax those selfsame houses. There are about 1.9m units of "housing stock" in Ireland; at 1000 euro a year (on average) that would plug about half of that pretty big hole in the public finances.

silverharp

Hookey wrote: »

Property tax would be on top of that.

To be honest I'm amazed there's no property tax already. I own a not particularly large flat in London and the Council tax on that is over £1000 a year. Since a housebuilding boom is what grew the Celtic Tiger in the first place, it seems logical to tax those selfsame houses. There are about 1.9m units of "housing stock" in Ireland; at 1000 euro a year (on average) that would plug about half of that pretty big hole in the public finances.

what you are saying is you are ok with tranferring more money from citizens to the state at the very time when people here may at least want to start behaving rationally ie paying down debt and building up savings. The state has proven that it doesnt know how to spend money wisely. Its very immoral

Hookey

silverharp wrote: »

what you are saying is you are ok with tranferring more money from citizens to the state at the very time when people here may at least want to start behaving rationally ie paying down debt and building up savings. The state has proven that it doesnt know how to spend money wisely. Its very immoral

Hey, I don't want to pay any taxes, and I don't trust the government to spend the money wisely in the slightest. But that doesn't alter the fact that we've built a public finance system on an extremely narrow tax base that was dreadfully exposed to economic fluctuation. Its far better to take smaller amounts from lots of sources (income, VAT, property, corporate) than over-rely on one (property transactions). There's also an argument that says introducing a property tax in this way does encourage fiscal responsibility amongst the population because its an ongoing tax that reflects the real cost of ownership of property; people may have been a bit more sensible about buying that second or third holiday home on a million-year mortgage if they'd had to pay council tax on it every year.

is_that_so

10000maniacs wrote: »

I cannot believe what I am hearing here.
If you buy a property for €300,000 tomorrow, you will have to have earned €500,000+ in real terms by the time your mortgage is paid off to pay for it not counting the mortgage interest rate. Thats before property tax is introduced.
This is all very fine if the property value is increasing by 7-10% year in year out. Well its not anymore.
Property tax is Triple taxation.

Well the more obvious choice is to return to the far higher income taxes we used to enjoy.
Incidentally we used to have a property tax of sorts, something FF jettisoned to buy an election and never replaced the income for. This is an extremely normal and acceptable tax in the vast majority of EU countries and a lot of other countries worldwide, used to help fund all those services we complain about. What makes us so special?

silverharp wrote: »

what you are saying is you are ok with tranferring more money from citizens to the state at the very time when people here may at least want to start behaving rationally ie paying down debt and building up savings. The state has proven that it doesnt know how to spend money wisely. Its very immoral

I love the way "The State" is bandied about as an abstract concept for the government when we want to ignore the fact that a majority of the people voted for "The State", three times running. In 2007 there were numerous warnings that they really weren't up to it and had already made a bags of things. Most people chose to ignore that.
Civil servants may run the country but they are also there to implement government policy. A property tax proposal in my view is one sensible attempt to widen the tax base that does not directly tax labour or overly depend on one sector of the economy.

kippy

Theres no doubt that something like this is needed in the long term. However I think it'll be a bridge too far for a lot of people who have bought in the past 5-6 years (bought a house to live in, not to sell on). This of course could be over come with a sliding "means tested" scale.
Already the majority of working people have taken tax increases and stealth tax increases, while their mortgage rates may have gone down, we have no control over them. The existence of "management companies" and associated fees means that a lot of people already have an annual cost associated with their house. Were a property tax on all homes to come in, these companies can wave their income goodbye.
No doubt water rates wouldnt be too far away after this came in.
Again, like many others, I dont mind paying taxes so long as the income is not wasted from them however like most of the cack handed things we've seen in the past year, I wouldnt be too confident that this would be the case.

Davidth88

I too was amazed when I moved here from England there was no council tax/rates or whatever you want to call it.

Although not perfect I think funding local councils partly from the local community makes sense. It would make them more accountable I think.

However now I am used to not paying it , of course I wouldn't want to .( hypercritical or what )

I do however think they should put taxes on 2nd/3rd etc houses. And also cease all those crazy ' section nn ' tax breaks . This to me helped to fuel the property boom .

I was always amazed when people used to move house , not sell their old one but rent it, how they funded the move I could never understand ( I do now 100% mortgage over 50000 years ! )

techdiver

kippy wrote: »

Already the majority of working people have taken tax increases and stealth tax increases, while their mortgage rates may have gone down, we have no control over them.

This is an important point. The World and EU economies will begin to recover long before the Irish economy and this will have a negative effect for many home owners in Ireland as the ECB will start to raise interest rates to combat the natural inflationary pressures of a recovering euro zone economy. This in turn will be another factor that will impede Ireland's recovery.

If people think they have it bad now, just wait until 1 - 2 years down the line when the ECB interest rate head back toward 5%+.

silverharp

Hookey wrote: »

There's also an argument that says introducing a property tax in this way does encourage fiscal responsibility amongst the population because its an ongoing tax that reflects the real cost of ownership of property; people may have been a bit more sensible about buying that second or third holiday home on a million-year mortgage if they'd had to pay council tax on it every year.

I agree there in that I'd prefer a switch from income to consumption taxes but they are now adding consumption taxes on top of increasing income taxes

is_that_so wrote:

I love the way "The State" is bandied about as an abstract concept for the government when we want to ignore the fact that a majority of the people voted for "The State", three times running. In 2007 there were numerous warnings that they really weren't up to it and had already made a bags of things. Most people chose to ignore that.
Civil servants may run the country but they are also there to implement government policy. A property tax proposal in my view is one sensible attempt to widen the tax base that does not directly tax labour or overly depend on one sector of the economy.

voting for particular parties and the machinery of the state dont have a huge bearing on each other , a 3 term FF/Lab gov would have brought us to the same point. I dont have problem with property taxes if they are efficient but income taxes should be lowered or else it is just a straight forward transfer from the private sector to special interests.
I'm only guessing here as I dont have any debt that many people feel they have taken on too much and now want/feel the need to cut back? if so "the State" should not stand in their way?

is_that_so

silverharp wrote: »

I agree there in that I'd prefer a switch from income to consumption taxes but they are now adding consumption taxes on top of increasing income taxes



voting for particular parties and the machinery of the state dont have a huge bearing on each other , a 3 term FF/Lab gov would have brought us to the same point. I dont have problem with property taxes if they are efficient but income taxes should be lowered or else it is just a straight forward transfer from the private sector to special interests.
I'm only guessing here as I dont have any debt that many people feel they have taken on too much and now want/feel the need to cut back? if so "the State" should not stand in their way?

The machinery of state runs independently of government as we would expect. It is also used to further the philosophies/policies of government parties. They can't be usefully separated when one looks at the government/state and how it currently carries out its activities.

What does change with different parties is the philosophy or lack of it they bring which they can then use to shape the organs of state. I disagree on Labour/FF. A three term Labour/FF would never have happened, certainly not after the last time and especially with all of the Bertie carry-on.

My point about FF, and they are long past being an effective Govt. power, is that they were a known quantity, yet somehow an awful lot of people didn't realise until after they'd made their choices. An alternative, at the very least, offers a freshness and a potentially different philosophy. Government is not all about taxes and spending.

silverharp

is_that_so wrote: »

My point about FF, and they are long past being an effective Govt. power, is that they were a known quantity, yet somehow an awful lot of people didn't realise until after they'd made their choices. An alternative, at the very least, offers a freshness and a potentially different philosophy. Government is not all about taxes and spending.

oops on my part I meant too say FG/Lab , but It doesnt alter the substantive point. I'm just not optimistic that any real reform will happen , unlike a restaurant that cant force people at gunpoint to spend money or pay higher prices, the "state" can and does. I dont know what it is maybe the country's movers and shakers are always about 5 years from retirement so they have no incentive to care about the future, its all about maintaining the fantasy a little bit longer. Short of a taxpayer revolt this charade will continue until we are bailed out.

jimmmy

There are too many empty houses / apartments in the country as it is, with the owners in negative equity. Two-thirds of the dwellings in Co. Leitrim are unoccupied, for example. The owners have already paid a property tax in the form of stamp duty. Tax has also been collected in vat + income tax during their construction. They are often impossible to let out , or sell. Having a property tax on them is taxing a liability, not an asset, and would only hasten owners throwing the keys back at the backs.

The govt should cut public expenditure, which has grown from 36 billion in 2003 to 63 billion today. That is the elephant in the room. The cost of trying to collect a property tax would not be worth it as it would be impossible to police. Even a simple, small tax like the tv licence is not properly collected as it is.

PeakOutput

i assume if a property tax is brought in it will not be brought in for everyone at the start and that stamp duty will be abolished when a property tax is introduced no?

for example people with onl one home who bought it in the last 10 years and paid stamp duty on it would not have to pay property tax for a certain length of time

then anyone who is buying from now on will not have to pay stamp duty but will have to pay the property tax and anyone with more than one home will have to pay property tax on them all accept the family home or something like that. and i dont see it being that hard to collect plenty of other countries do it with great success

gurramok

jimmmy wrote: »

There are too many empty houses / apartments in the country as it is, with the owners in negative equity. Two-thirds of the dwellings in Co. Leitrim are unoccupied, for example. The owners have already paid a property tax in the form of stamp duty.

No they probably have not. Stamp duty was not applied for new builds in the bubble hence a boom in building them houses as it was the 'cheaper' thing to do for buyers.

Hookey

PeakOutput wrote: »

i assume if a property tax is brought in it will not be brought in for everyone at the start and that stamp duty will be abolished when a property tax is introduced no?

for example people with onl one home who bought it in the last 10 years and paid stamp duty on it would not have to pay property tax for a certain length of time

then anyone who is buying from now on will not have to pay stamp duty but will have to pay the property tax and anyone with more than one home will have to pay property tax on them all accept the family home or something like that. and i dont see it being that hard to collect plenty of other countries do it with great success

Why would you assume any of those things? More likely is a property tax and a reduced (but not removed) stamp duty; and even that's not a given. As for people who've already paid; I'm guessing it'll be "sorry, we're skint, so tough".

The scary thing about all this is that in a league table of EU wasteful governments, Ireland would actually be near the bottom; ALL EU governments spend more than they earn, but only Denmark, Luxembourg and Slovenia keep the gap smaller than Ireland; the problem isn't so much about what we spend the money on, as how tax is collected in the first place. Like I said before, too narrow a base and over-reliance on the property bubble, which was mind-bogglingly stupid.