Property tax...This will be popular

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. "

gurramok wrote: »

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.

Stamp duty was indeed paid on all investment properties....as far as I know only first time buyers did not pay stamp ( property) tax.
Having a new property tax now on properties is taxing a liability, not an asset. It is an additional tax on those who for whatever reason took the risk to support the economy / construction jobs. It would would only hasten owners throwing the keys back at the banks, and depress the property market further. A new property tax would only result in even lower propertry prices, less stamp duty, even fewer employed in solicitors + architects offices etc.

The way out of the economic mess is to grasp the nettle of public sector spending, which has spiralled out of control from 36 billion only 6 years ago to 63 billion - and rising - this year. Trying to collect a tenth of a billion in a new property tax is neither here nor there.

big b

The stinking hypocrisy of a government encouraging us to buy property, then bringing in a new tax when we do, will not deter this mob from doing so.

No matter how it's calculated, there will be a gnashing of teeth from some sections who'll feel they are being unfairly treated. I have little doubt that there will be some who'll carry a greater burden than others, even less doubt that the uproar will make any protests so far pale into insignificance.
But the brunt of the pain must surely be carried by those who own property outwith the family home. If you were willing to take the risk of profit through property investment, you must surely accept that you were subject to market forces. I feel that most home-owners would accept a property tax if they know that their liability is less than that of those who own more housing stock than just the one they live in.
A higher rateable value for investment property would mean a more manageable bill for those who simply bought a roof over their heads.

gurramok

Yes, thats right the investment properties, forgot about them!

Still no stamp was paid for by FTB's and owner occupiers on new builds.

Nothing wrong with lower property prices, it benefits alot of people. Too many invested in property which resulted in too many employed in construction, architects, solictors etc and thats why there is a mess now.

They cannot throw the keys back, they will be chased by the banks for the outstanding amount for years under the bankruptcy laws.

Agree with public sector slashing.

Why should Ireland be the only country without property tax in the developed world?

jimmmy

gurramok wrote: »

Why should Ireland be the only country without property tax in the developed world?

Its got one of the highest property taxes in the developed world, has it not ( stamp duty of 9% )? Maybe there should be a new property tax, so those who paid little or no property ( stamp duty ) tax can now share the pain and pay the equivalent of 9% stamp duty.

jimmmy

big b wrote: »

But the brunt of the pain must surely be carried by those who own property outwith the family home. If you were willing to take the risk of profit through property investment, you must surely accept that you were subject to market forces.

People were encouraged to buy investment property ( through govt section 23 / 27 etc ). It was to make a plentifull supply of decent quality rented accomodation for the economy. Often people borrow 90% of the cost, and looked on it as a pension. Now the properties are in negative equity + often empty. The govt cannot now change the level of the playing field and hit these people harderer....they already have a liability, not an asset. You cannot tax liabilities.

techdiver

jimmmy wrote: »

People were encouraged to buy investment property ( through govt section 23 / 27 etc ). It was to make a plentifull supply of decent quality rented accomodation for the economy. Often people borrow 90% of the cost, and looked on it as a pension. Now the properties are in negative equity + often empty. The govt cannot now change the level of the playing field and hit these people harderer....they already have a liability, not an asset. You cannot tax liabilities.

Investing in anything is a risk. If you are not willing to take the bad with the good don't invest.

big b

jimmmy wrote: »

People were encouraged to buy investment property ( through govt section 23 / 27 etc ). It was to make a plentifull supply of decent quality rented accomodation for the economy. Often people borrow 90% of the cost, and looked on it as a pension. Now the properties are in negative equity + often empty. The govt cannot now change the level of the playing field and hit these people harderer....they already have a liability, not an asset. You cannot tax liabilities.

fair point, jimmmy. It's also fair though, that those willing to take the risk, in pursuit of profit, should bear a greater cost than those who were simply buying somewhere to live.
The value of investments can go down as well as up.
People who thought there would be an endless supply of renters in Leitrim who would pay the 2nd mortgage for them clearly hadn't done much homework. Should their liability really only be the same as the young couple who scraped a few bob together to buy their first home? That home may now be worth less than they paid for it. Should they be exempt too?

eoinbn

I am not a fan of property tax, but I understand its advantages. I do find it quite fitting that FF used the abolishment of private property tax to buy the election in 1977, leading us to financial ruin in the 80's and now they will try and reintroduce it which will hopefully lead to the ruin of the FF party.

Darragh29

The property tax is where I'm drawing my line in the sand with this government. Whatever about bullsh*t levies and the likes, I'll run with that to a certain degree but I'll go to the Joy before I pay a property tax in this country. I've already paid 40% tax on my property in VAT, we are now more than a year into a recession and we still have 166 people in Dail and a further 60 people in the Seanad who must be the only people in the country who can claim unvouched expenses worth tens of thousands of Euro a year, on top of insane salaries, and these same people wonder why they need more money to run the country???

jimmmy

techdiver wrote: »

Investing in anything is a risk. If you are not willing to take the bad with the good don't invest.

Exactly. Nobody invest in Ireland. What a great message that is to the world. Pity the people who did invest in Ireland, pay all that stamp duty and vat and income tax 2 or 4 or 6 years ago, which meant the govt was able to increase public expenditure from 36 billiion euro in 03 to 63 billion today. Only now people are not investing in Ireland and taxes are only 30 billion or not much more this year. Hitting those who pay the taxes further will not solve the problem. They have been stung too much already....many have lost whatever savings they had 4 or 6 years ago. Now they will depend entirely on the old age pension for their retirement. Not a very fair or satisfactory outcome for those who paid so much tax.

10000maniacs

Darragh29 wrote: »

The property tax is where I'm drawing my line in the sand with this government. Whatever about bullsh*t levies and the likes, I'll run with that to a certain degree but I'll go to the Joy before I pay a property tax in this country. I've already paid 40% tax on my property in VAT, we are now more than a year into a recession and we still have 166 people in Dail and a further 60 people in the Seanad who must be the only people in the country who can claim unvouched expenses worth tens of thousands of Euro a year, on top of insane salaries, and these same people wonder why they need more money to run the country???

At last, somebody who gets it.;)
Every penny you put into your property, you have already paid 40%+ tax/levies on this money. Then you are hit for stamp duty which will in some cases bring this above the 50%. Then you will be hit with mortgage interest.
Then you will be hit with management charge if you have an apartment.
Then in December you will be hit with property tax in the budget. Getting worried?

silverharp

10000maniacs wrote: »

At last, somebody who gets it.;)
Every penny you put into your property, you have already paid 40%+ tax/levies on this money. Then you are hit for stamp duty which will in some cases bring this above the 50%. Then you will be hit with mortgage interest.
Then you will be hit with management charge if you have an apartment.
Then in December you will be hit with property tax in the budget. Getting worried?

Maybe we will get the tax revolt , if enough people bin them..... one can dream

NewDubliner

jimmmy wrote: »

Now they will depend entirely on the old age pension for their retirement.

How is that funded?

jimmmy

10000maniacs wrote: »

At last, somebody who gets it.;)
Every penny you put into your property, you have already paid 40%+ tax/levies on this money. Then you are hit for stamp duty which will in some cases bring this above the 50%. Then you will be hit with mortgage interest.
Then you will be hit with management charge if you have an apartment.
Then in December you will be hit with property tax in the budget.

Do not worry, it will not happen. Too many empty places + places in negative equity already. If the stamp duty had been reasonable, fair enough....but the govt cannot take up to 9% off someone + then hit them with a tax on a liability. When they cut public sector spending 33% then maybe.

jimmmy

NewDubliner wrote: »

How is that funded?

Ask anyone who pays tax to the government ...that is how the government pays money. Plus borrowed money of course.

Hookey

jimmmy wrote: »

Do not worry, it will not happen. Too many empty places + places in negative equity already. If the stamp duty had been reasonable, fair enough....but the govt cannot take up to 9% off someone + then hit them with a tax on a liability. When they cut public sector spending 33% then maybe.

You keep on talking about it like its a tax on the property; its not; its a tax on occupancy; negative equity has nothing to do with it. Everywhere else in Europe with this kind of tax (e.g. everywhere else in Europe!) would charge a fee based on location, size of house, number of occupants, usually with discounts for single occupiers, and discounts for empty houses. I'd take your bet and say this will happen. From a government POV its a no-brainer.

10000maniacs

Hookey wrote: »

You keep on talking about it like its a tax on the property; its not; its a tax on occupancy; .

So you reckon the Government are not giving due consideration to Property tax, but in fact they are contemplating an Occupancy POLL TAX.
Well that went down well with our nearest neighbours in 1990.
Lovely Jubbily. Can't wait.:rolleyes:

Hookey

10000maniacs wrote: »

So you reckon the Government are not giving due consideration to Property tax, but in fact they are contemplating an Occupancy POLL TAX.
Well that went down well with our nearest neighbours in 1990.
Lovely Jubbily. Can't wait.:rolleyes:

That's exactly what the UK Council Tax is (sorry, "Community Charge"). This is the basis of most European local taxation.

The Poll Tax was different as it wasn't connected to the property you lived in, so if you had multiple adults living in one house, they all got charged as individuals. The Council Tax (sorry, "Community Charge") is billed to the "homeowner" (or chief rent payer).

NewDubliner

jimmmy wrote: »

Ask anyone who pays tax to the government ...that is how the government pays money.

That's an evasive answer.

Would it be correct that everyone has had to pay more for goods and services to pay for private-sector second pensions? And that the money was then unwisely invested & as a result, you're now looking for a reduction in public-sector pensions to compensate for this? And that we'll all have to pay property tax to make up for the money taken out of thr NPRF to help build up the share-values on which your second pensions depend?

GUIGuy

Consider a typical new property purchase 3 years ago.

Price around 400k
20% of that was social housing levy (80k)
12.5% of it was VAT (50k)
40k was the county council levy

So before stamp duty was paid that on that 400k transaction the purchaser already endebted themselves to pay out 170k in tax. Then he/she had to pay stamp duty on top of that.

This person does not yet on a property they own a mortgage.
Now consider their neighbour down the road who bought 20 years earlier. They bought for about 20k and didn't pay anything except vat.
They saw their 'wealth' increase because their younger neighbours indebted themselves. Wage inflation over the years means they have no trouble with their 150 a month mortgage. They have 5 years left.

Now who is 'asset rich'? The person who has little or no equity, or the person who still has a fairly large asset?

I've no problem with property tax per se... but it should be on the equity that a person has in the property. The equity is a persons wealth. A mortgage is the opposite of wealth it is debt.

I also think any such should be progressively weighted such that those who benefited most from the property boom pay a little more. Who are they? Anyone those who bought properties before the boom, or before social housing levies/county council levies were introduced.

These people made equity gains is off the backs of those who bought property more recently... the added taxes they paid on purchase were one of the drivers of higher prices.

silverharp

GUIGuy wrote: »

I also think any such should be progressively weighted such that those who benefited most from the property boom pay a little more. Who are they? Anyone those who bought properties before the boom, or before social housing levies/county council levies were introduced.

OYE! feck off , my house was bought before the boom , but it was bought as a house, nothing more nothing less, I've never planned to move, I dont even view it as an asset , as it doesnt generate income and costs money to up keep. In reality its a consumption item but even a 1% tax based on some artificial paper value would kill us as a family. It would be a straight forward tax based on gov. produced inflation.

Fighting Irish

techdiver wrote: »

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...

lol

Fighting Irish

Sleepy wrote: »

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...

I'd love that, we need to punish the daft, its the only way they'll learn

Fighting Irish

gurramok wrote: »

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.

work hard, get screwed, ye that sounds fair

jimmycrackcorm

So will farmers get taxed for the land trhey hold or is this just a concrete tax proposal?

old boy

it would be much simpler to put a water tax in place, how many people in this country payes for the water they use, water is getting scarcer and imo has to be paid for, i am definitly not a GREEN. eeeeekkkkkkkk

jimmmy

Hookey wrote: »

You keep on talking about it like its a tax on the property; its not; its a tax on occupancy;.

Well if its the occupancy thats taxed, thats not as bad. It means the govt will get nothing on the 200,000 empty houses / apartments in the country, many of which are in serious negative equity already, without any additional property taxes. As I said before, if the stamp duty had been reasonable, fair enough....but the govt cannot take up to 9% off someone + then hit them with a tax on a liability. When they cut public sector spending 50% to 2004 levels , then maybe....thats the elephant in the room, as Eddie Hobbs says.

10000maniacs

jimmmy wrote: »

but the govt cannot take up to 9% off someone + then hit them with a tax on a liability.

Its more like 40% plus 9%. You have already paid 40%+ PAYE PRSI and Levy on the capital.

NewDubliner

jimmmy wrote: »

It means the govt will get nothing on the 200,000 empty houses / apartments in the country, many of which are in serious negative equity already, without any additional property taxes.

If they're empty, they're owned by speculators, not ordinary joes. The government is bailing them out with extra taxes levied on you and by pay cuts in the public sector.

jimmmy wrote: »

As I said before, if the stamp duty had been reasonable, fair enough....but the govt cannot take up to 9%

First time buyers didn't pay stamp duty & got tax relief on the loans. Some got 'first time buyers' grant.

The idea is to collect tax relative to the cost of servicing the properties, water, sewage, police, roads etc. Seems like a good idea, to match taxes to consumption of scarce resources.

Debatable if it should be per house or per person. I can see some social merit in encouraging multiple occupancy.

Also, I suggest isolated houses (not attached to farms) should be charged more. We need to encourage urban living. It's more efficient.

Interesting & provocative article in The Economist - argues that home ownership is bad for the economy. Worth reading even if you don't agree with it.

jimmmy

NewDubliner wrote: »

If they're empty, they're owned by speculators, not ordinary joes..

Some are owned by ordinary joes who cannot sell them as the market in certain areas around the country has crashed....they cannot be sold even at 40% or 50% off....what if someone gets a job transfer ?

Also many were bought - with 90% loans ...as their pension. The govt encouraged them to do this. You cannot call these people "speculators", "not ordinary joes"etc

NewDubliner wrote: »

The government is bailing them out with extra taxes levied on you and by pay cuts in the public sector..

rubbish. It was the taxes ( which your "speculators" paid lol ) which inflated public sector spending from 36 billion in 03 to 63 billion + spending today. Cut public spending back , as Eddie Hobbs, George Lee etc says.

NewDubliner wrote: »

First time buyers didn't pay stamp duty & got tax relief on the loans. Some got 'first time buyers' grant.

.

Tax them so with a property tax. Its time they paid it. Not the people who paid big time already in property taxes.