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Property tax...This will be popular

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    #122
    jimmmy
    Closed Accounts Posts: 2,539 ✭✭✭jimmmy


    blast05 wrote: »
    However, the reality is the world needs these companies just as the world has always needed people to invest in property for the benefit of those who do not want or can not afford to buy.

    Yes. If nobody invested in providing accomodation to people ( houses + apartments ) to people, what sort of economy would we have ? Cuba springs to mind. The people who paid tax , stamp duty etc, and created employment ( + a lot of tax for the govt ) in providing accomodation should not be kicked when they are down, now they are in negative equity, and often with empty property ( 200,000 + in the country are empty ).


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    #123
    NewDubliner
    Closed Accounts Posts: 1,615 ✭✭✭NewDubliner


    jimmmy wrote: »
    Yes. If nobody invested in providing accomodation to people ( houses + apartments ) to people, what sort of economy would we have ?
    If people leverage too much on an unreliable income stream (rents) and saturate the market with too much supply of accomodation, what kind of an economy will we have?

    jimmmy, you said yourself that people should pay their for pensions 100%, yet, you're sympatihsing with people who tried to buy houses with other people's money. If they'd funded the investments from their personal earnings and charged a reasonable amount of rent to cover management and wear and tear, I'd have some sympathy, but the people you're defending so persistantly tried to conjure up a valuable asset with virtually no investment of their own.


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    #124
    Serenity Now!
    Closed Accounts Posts: 1,326 ✭✭✭Serenity Now!


    blast05 wrote: »
    It is.
    I'm just extending the discussion.
    For what its worth, i also have a rental - my wifes place before we got married - it is probably fast approaching negative equity, i.e.: 50% of its peak value ..... and as i said i don't really have too much or an argument re paying tax on properties like this but i certainly can see the point being made by those people who purchased in 2006/07 who were merely jumping on to a government orchestrated pyramid scheme.
    Negative equity for a start isn't measured on a "peak" value. It is measured on market value. Is your third property worth less than it is mortgaged for?
    House I bought in 2006 (to live in when I returned to this country) is now worth more or less what it is mortgaged for. It was 310,000 euros, rose in value to ca.495,000 and is now roughly around 320,000 in value. Only difference is my mortgage plus interest repayment has decreased each month.

    Its only really negative if you want to realise the asset.


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    #125
    bobbbb
    Closed Accounts Posts: 507 ✭✭✭bobbbb


    Serenity Now! wrote: »
    Negative equity for a start isn't measured on a "peak" value. It is measured on market value. Is your third property worth less than it is mortgaged for?
    House I bought in 2006 (to live in when I returned to this country) is now worth more or less what it is mortgaged for. It was 310,000 euros, rose in value to ca.495,000 and is now roughly around 320,000 in value. Only difference is my mortgage plus interest repayment has decreased each month.

    Its only really negative if you want to realise the asset.

    True, you havent lost anything unless you need to sell.
    But remember the value you think it is may be higher than someone else thinks it is.

    Having said that ......
    Meanwhile i wait to see what happens and for the dust to settle and spend a hell of a lot more on rent than i would on a mortgage.

    Depressing reading the article about that in the paper today.
    http://www.examiner.ie/Ireland/idsnqlsnoj/rss2/


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    #126
    Biffo The Bare
    Registered Users Posts: 291 ✭✭Biffo The Bare


    bobbbb wrote: »
    True, you havent lost anything unless you need to sell.
    Its very hard to know how low prices will eventually drop. Expect a couple of tough years, after years of tremedously inflated prices.


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    #127
    blast05
    Closed Accounts Posts: 256 ✭✭blast05


    Serenity Now! wrote: »
    Negative equity for a start isn't measured on a "peak" value. It is measured on market value. Is your third property worth less than it is mortgaged for?
    House I bought in 2006 (to live in when I returned to this country) is now worth more or less what it is mortgaged for. It was 310,000 euros, rose in value to ca.495,000 and is now roughly around 320,000 in value. Only difference is my mortgage plus interest repayment has decreased each month.

    Its only really negative if you want to realise the asset.

    Yes, ok, i know - way i phrased it wasn't too clever.
    Record market conditions are creating the most favourable buying conditions in a generation, according to the director of the Irish Mortgage Corporation, Frank Conway.

    The ironic thing is that right here, right now, this quote is probably correct. Of course future trends of interest rates, job security etc etc


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    #128
    jimmmy
    Closed Accounts Posts: 2,539 ✭✭✭jimmmy


    NewDubliner wrote: »

    yet, you're sympatihsing with people who tried to buy houses with other people's money. .

    Wrong again, people actually bought property with their own money or else money they borrowed from financial institutions
    NewDubliner wrote: »
    If they'd funded the investments from their personal earnings and charged a reasonable amount of rent to cover management and wear and tear, I'd have some sympathy, .
    Actually that is the only way most people fund their pension ( whither it be property investment or other ) is by "personal earnings"......and because there are so many landlords, rents are at much more reasonable levels than they would otherwise be ( a basic law of supply and demand, experienced worldwide).



    NewDubliner, you still have not answered the question : " If nobody invested in providing accomodation to people ( houses + apartments ) to people, what sort of economy would we have ?"


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    #129
    NewDubliner
    Closed Accounts Posts: 1,615 ✭✭✭NewDubliner


    jimmmy wrote: »
    Wrong again, people actually bought property with their own money or else money they borrowed from financial institutions
    You said they had 90% mortgages? OK, they borrowed somebody else's money and planned to use the tenant's money to pay it back, then keep the house for themselves. Amount of own money invested? 10% at best.

    The answer to your question is that we do need rental properties, but not too many & these should be funded in a sustainable way that does not put the banks at risk of default.


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    #130
    blast05
    Closed Accounts Posts: 256 ✭✭blast05


    I wonder are there any figures for what percentage of banks bad debt will come from home owners versus 'buy to let' versus developers.

    Reading this thread and one would presume it is 100% from the 'buy to let' sector


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    #131
    bobbbb
    Closed Accounts Posts: 507 ✭✭✭bobbbb


    NewDubliner wrote: »
    You said they had 90% mortgages? OK, they borrowed somebody else's money and planned to use the tenant's money to pay it back, then keep the house for themselves. Amount of own money invested?


    You have just described how any business starts off.


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    #132
    NewDubliner
    Closed Accounts Posts: 1,615 ✭✭✭NewDubliner


    bobbbb wrote: »
    You have just described how any business starts off.
    With 90% borrowed from the bank and based on trying to sell into a saturated market at an insane profit margin bearing no relationship to the value added by the 'entrepreneur'? Isn't that why the borrow-to-let market has failed?

    It's this kind of 'leveraging' that's got us into trouble.


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    #133
    jimmmy
    Closed Accounts Posts: 2,539 ✭✭✭jimmmy


    bobbbb wrote: »
    You have just described how any business starts off.

    Yes !


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    #134
    jimmmy
    Closed Accounts Posts: 2,539 ✭✭✭jimmmy


    NewDubliner wrote: »
    You said they had 90% mortgages? .
    Some landlords did / do. Some have have equity / money from other sources and own the property outright. Others may have 50 or 60% loans.
    NewDubliner wrote: »
    OK, they borrowed somebody else's money
    .
    If someone borrows money from a financial institution to fund a property purchase, then I guess you can indeed say they "borrowed somebody else's money" ! Is there something wrong with this ? Should nobody ever borrow money and nobody ever lend money ? Maybe you would prefer stalinist Russia ?


    NewDubliner wrote: »
    and planned to use the tenant's money to pay it back,
    .
    Not all of the money the tenant ever earned....just whatever money the tenant wanted to give in return for the use of the building. Its called "rent". Its like hiring something for a period of time. There is no law forcing the tenant to do it in the first place.
    NewDubliner wrote: »
    The answer to your question is that we do need rental properties, but not too many .

    Yes indeed, not too many. Everyone knows there is too much now. However, the govt which was elected did encourage the construction of a plentiful supply of decent quality accomodation, to give employment, to give people an accomodation choice and to keeps rents relatively low. Ever hear of the law of supply and demand ? If there are not enough , what happens then ? Rents shoot up...are you in favour of even less choice of accomodation / higher rents ?


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    #135
    gurramok
    Closed Accounts Posts: 13,992 ✭✭✭✭gurramok


    Well as agreed, there are far too many now hence all tax reliefs including the rental tax relief should be abolished.

    It proves that the 'property is your pension' myth is just a myth.

    Start introducing tax reliefs for startup industry to create sustainable jobs, not for a failed asset investment.


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    #136
    Akrasia
    Registered Users Posts: 22,424 ✭✭✭✭Akrasia


    blast05 wrote: »
    The reality is where i am from in rural Ireland has only gained from the Celtic Tiger in 3 ways - increased construction of 1 off-housing, increased grants to farmers and higher disposable income for all the sons and daughters that return from Dublun, Galway etc at weekends. This is similar to hundreds of rural areas.
    I grew up in the country and I don't know anyone who thinks the proliferation of one off monstrosities and holiday homes in the countryside is a 'benefit' to rural Ireland.
    (other than the farmers who made a windfall selling sites and the few builders and quarries)
    For the sake of a few very short term jobs and a ruined economy, we have permanently altered the character of rural ireland and not for the better.


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    #137
    Akrasia
    Registered Users Posts: 22,424 ✭✭✭✭Akrasia


    jimmmy wrote: »
    Ireland has the highest property tax of all...its called stamp duty. Ask anyone who paid 9% stamp duty ....tens of thousands or hundreds of thousands of euro ) in Ireland .....or indeed the other taxes incurred in house construction in the past number of years ( vat, income tax, indirectly sometimes social housing requirement in the case of apartments / estates - a sort of tax etc )

    those people who paid stamp duty would have paid the market rate for their property which during the mania was equal to exactly whatever the maximum amount the banks would lend.

    If stamp duty was reduced, the costs would not have fallen, the prices would have risen to fill the void left by the reduction. The tax foregone would have gone into the pockets of developers and landowners and not the state (welll... they got their mitts on it eventually, but thats not the point)


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    #138
    Akrasia
    Registered Users Posts: 22,424 ✭✭✭✭Akrasia


    jimmmy wrote: »
    Yes. If nobody invested in providing accomodation to people ( houses + apartments ) to people, what sort of economy would we have ? Cuba springs to mind. The people who paid tax , stamp duty etc, and created employment ( + a lot of tax for the govt ) in providing accomodation should not be kicked when they are down, now they are in negative equity, and often with empty property ( 200,000 + in the country are empty ).

    If they're sitting on an empty property hoping that it will increase in value so they can sell for a profit then they are causing serious harm to the economy and our ability to recover from this mess they helped to create. If they set an appropriate price, in most circumstances they will be able to either sell or rent their property. If they're not going to do so voluntarily, the government should encourage it through taxation policy.

    I've said it before but i'll say it again it is essential that our property prices fall to their real value as quickly as possible By trying to refloat the property market you're just doing more and more damage to our chances of recovery (slim and getting slimmer by the day)


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    #139
    Akrasia
    Registered Users Posts: 22,424 ✭✭✭✭Akrasia


    jimmmy wrote: »
    NewDubliner, you still have not answered the question : " If nobody invested in providing accomodation to people ( houses + apartments ) to people, what sort of economy would we have ?"

    its not an all or nothing scenario. There are two main kinds of property investor. Investor A buys a property rents and maintains it and makes a profit on the rental income

    Investor B Buys a property with a 90% interest only mortgage, sits on it for 6 months and hopes to sell it for a profit without doing anything to make it more valuable.

    The first kind of investor will always provide properties if there is a demand for them, the second are just leeches and we can do without them


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    #140
    jimmmy
    Closed Accounts Posts: 2,539 ✭✭✭jimmmy


    Akrasia wrote: »
    If they're sitting on an empty property hoping that it will increase in value so they can sell for a profit then they are causing serious harm to the economy and our ability to recover from this mess they helped to create. If they set an appropriate price, in most circumstances they will be able to either sell or rent their property.

    Incorrect . You say "If they set an appropriate price, in most circumstances they will be able to either rent their property"...there are currently over 200,000 empty properties in the country ....do you think there are tenants for them all. ? As regards selling them, I know some properties reduced by 50% and still not sold....do you think someone should sell their pension at a 50% loss ?

    Akrasia wrote: »
    If they're not going to do so voluntarily, the government should encourage it through taxation policy.
    As regards property, the government has already done enough damage through taxation policy.


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    #141
    jimmmy
    Closed Accounts Posts: 2,539 ✭✭✭jimmmy


    Akrasia wrote: »
    those people who paid stamp duty would have paid the market rate for their property which during the mania was equal to exactly whatever the maximum amount the banks would lend.

    If stamp duty was reduced, the costs would not have fallen, the prices would have risen to fill the void left by the reduction. The tax foregone would have gone into the pockets of developers and landowners and not the state (welll... they got their mitts on it eventually, but thats not the point)

    So you think if stamp duty was about 19% instead of the already high 9%, property prices would have been 10% less? The real world does not work like that.


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    #142
    blast05
    Closed Accounts Posts: 256 ✭✭blast05


    I grew up in the country and I don't know anyone who thinks the proliferation of one off monstrosities and holiday homes in the countryside is a 'benefit' to rural Ireland.

    I am being completely sincere when i say that i do not know of a single person where i am from who would agree with that sentiment .......


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    #143
    NewDubliner
    Closed Accounts Posts: 1,615 ✭✭✭NewDubliner


    jimmmy wrote: »
    If someone borrows money from a financial institution to fund a property purchase, then I guess you can indeed say they "borrowed somebody else's money" ! Is there something wrong with this ?
    There is if you can't pay it back.
    jimmmy wrote: »
    Not all of the money the tenant ever earned....just whatever money the tenant wanted to give in return for the use of the building.
    And now the tenants want to pay less.
    jimmmy wrote: »
    are you in favour of even less choice of accomodation / higher rents ?
    Of course not, and as long as the landlords are able to cope with the new market reality & lower returns, it's 'win-win'. So, why all the whinging?


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    #144
    bobbbb
    Closed Accounts Posts: 507 ✭✭✭bobbbb


    Akrasia wrote: »
    its not an all or nothing scenario. There are two main kinds of property investor. Investor A buys a property rents and maintains it and makes a profit on the rental income

    Investor B Buys a property with a 90% interest only mortgage, sits on it for 6 months and hopes to sell it for a profit without doing anything to make it more valuable.

    The first kind of investor will always provide properties if there is a demand for them, the second are just leeches and we can do without them

    You dont happen to have links to show us how many of each type there is do you?


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