Will the Governnment do anything about negative equity

mathie

A friend of mine thinks the Government will do something for people in negative equity.

Anyone think they will?
If so what will they do?

Do what exactly?

mathie

Deleted User wrote: »

Do what exactly?

I've no idea.
Hence the question.

Small Change

mathie wrote: »

If so what will they do?

Deleted User wrote: »

Do what exactly?

mathie wrote: »

I've no idea.
Hence the question.

I'm confused

Paulw

Of course they won't do anything. What can they do????

It's a fact of life - cost of things can go up or down.

Hopefully they will not do anything. I can't think of anything that could be done that wouldn't be at the expense of taxpayers in general and those of us who didn't borrow too much and pay too much.

What does your friend think they will do?

damnyanks

Anyone know what the bankruptcy law in Ireland is like ? Can people just declare bankruptcy and walk away from the houses?

mathie

Small Change wrote: »

I'm confused

Threads.
Confusing.

mathie

Deleted User wrote: »

Hopefully they will not do anything. I can't think of anything that could be done that wouldn't be at the expense of taxpayers in general and those of us who didn't borrow too much and pay too much.

What does your friend think they will do?

I think something along the lines of allowing them to sell their place (which is in negative equity) at current market value and the government will cover the shortfall.

blah

What can the government do? Anything they do will cost the taxpayer money.

If they give everyone high rates of mortgage relief, then that's less tax revenue.
If they force the banks to give everyone low interest rates, the banks make less of a profit and need more bailout money.

They'll just end up giving with one hand and taking with the other.

Except in the case of people who, for whatever reason, have not bought yet.

John_Mc

damnyanks wrote: »

Anyone know what the bankruptcy law in Ireland is like ? Can people just declare bankruptcy and walk away from the houses?

No. The Bank will sell your house for whatever they can get and then pursue you for the outstanding balance.

blah

mathie wrote: »

I think something along the lines of allowing them to sell their place (which is in negative equity) at current market value and the government will cover the shortfall.

But the government is the taxpayer....?

spockety

I think the government should pay off the negative equity amount outstanding on a mortgage in a one off amnesty.

In order to pay for it I should think a new "NE Tax" would be brought in, perhaps a 10% levy on everything. Income, goods, travel, services. Should pay for it within a few years.

irlrobins

mathie wrote: »

I think something along the lines of allowing them to sell their place (which is in negative equity) at current market value and the government will cover the shortfall.

Dream on! Anyone who suggests that as a course of action has no grasp of basic economics.

hobochris

spockety wrote: »

I think the government should pay off the negative equity amount outstanding on a mortgage in a one off amnesty.

In order to pay for it I should think a new "NE Tax" would be brought in, perhaps a 10% levy on everything. Income, goods, travel, services. Should pay for it within a few years.

I think that's worst thing they could do.

Your essentially waving peoples debts and putting them onto the shoulders of people who were smart enough not to rack up debt in what was obviously a bubble. it would be quick way to spark a surge in Emigration.

Why Should I pay for someone elses debt? did I benefit from them borrowing beyond their means?

also it would rock investor confidence as the government could just wipe out debt as they see fit, so why should investors invest in this country when their investments could be devalued at any stage.

we're trying to attract outside investment in order to build a knowledge based economy not drive it away.

spockety

spockety wrote: »

I think the government should pay off the negative equity amount outstanding on a mortgage in a one off amnesty.

In order to pay for it I should think a new "NE Tax" would be brought in, perhaps a 10% levy on everything. Income, goods, travel, services. Should pay for it within a few years.

I would leave the country if that was enacted.

Why should I bailout my landlord who has been loosing about €500 per month on his "investment" since he bought it a couple of years ago.

techdiver

spockety wrote: »

I think the government should pay off the negative equity amount outstanding on a mortgage in a one off amnesty.

In order to pay for it I should think a new "NE Tax" would be brought in, perhaps a 10% levy on everything. Income, goods, travel, services. Should pay for it within a few years.

Of course. I will pay for some one else who was dumb enough to borrow too much.... dream on.....

hobochris

To answer the thread title question: my guess would be no.

They did nothing to prevent it, in fact they nurtured an environment for the unregulated madness that caused this boom-to-bust to happen.

What we should be asking now is what was in it for them?

there is no point going into to much here, I'll use my vote to voice my opinion.

The_Conductor

spockety wrote: »

I think the government should pay off the negative equity amount outstanding on a mortgage in a one off amnesty.

How is this an 'amnesty'? It would in effect be the government stepping in and handing out lumpsums to random people. Further- negative equity is notional until such time as a property is sold. You, me and the man on the moon may know that a property is not worth the amount outstanding on a mortgage- but its purely hypothetical until such time as the property is sold......

spockety wrote: »

In order to pay for it I should think a new "NE Tax" would be brought in, perhaps a 10% levy on everything. Income, goods, travel, services. Should pay for it within a few years.

We already have a tax on everything- its called VAT. The rate of VAT varies on different products and services, and varies depending on the frame of mind the Minister for Finance is in.

Also- why should someone who exercised prudence and decided they would be overstretching themselves were they to buy into overpriced property- be punished- by having to bailout their idiot neighbour who splurged like there was no tomorrow? Its all well and good to say 'life's not fair'- but putting a punitive tax on someone who exercised due caution and diligence is not the way to go.

If there is to be an effort made to assist people- it has to be by reform of personal bankruptcy law- its the only fair way of dealing with this......

Cookie_Monster

Why should they? Those people (who bought over priced property) have already proved they are not good with money/finances. How could anyone possibly think that giving them more would be a good idea?


No one forced any of these people to buy a house, it was a risk they themselves took and unfortunitly they got stung.

The government have much more important things to worry about.

Senna

They have had already done something. They have kept TRS for 7 years after the purchase of a property.
It would have been very easy (and beneficial) for them just to cut all relief and they would have done it, only for so many people in NE.

It would be another nail in the coffin of the property market, so there is another reason, but NE was the biggest reason for keeping it (for the moment, it will be completely phased out soon enough).

There is another dark cloud on the horizon for those in NE, property tax will soon be introduced and for many it will be the straw that broke the camels back. Imagine OAP's medical card X 100.

smccarrick

smccarrick wrote: »

If there is to be an effort made to assist people- it has to be by reform of personal bankruptcy law- its the only fair way of dealing with this......

I guess this is it. You live with your negative equity (and ask the banks to let it follow you if you move home?) or you don't get credit for the foreseeable future.

whippet

I bought a car for €40K two years ago, will the government give me 20 odd grand to make up that short fall ? Class, maybe that LCD I bought pre-HD, I could get a grand back on that .... savage !!!! ... recession .. what recession !!!

More and more we are hearing people looking for 'The Government' to help out such and such ... do people not realise everytime 'The Government' spends a cent they are taking money out of everyone else's pockets!! it's our money !!!

spockety

My post was obviously way too sarcastic for the sarcasm to be spotted, sorry folks!

(Or the fact that nobody spotted it means that they are actually fearful that this type of thing is something our government would actually consider :eek: )

irlrobins

No I picked up on the dripping sarcasm. But it was fun to watch people fly off the handle....:D

whizzbang

spockety wrote: »

My post was obviously way too sarcastic for the sarcasm to be spotted, sorry folks!

(Or the fact that nobody spotted it means that they are actually fearful that this type of thing is something our government would actually consider :eek: )

There is so much lunacy going about at the moment that your slipped in without being noticed

I'm sure somebody somewhere thinks your suggestion is a fair idea.

nice1franko

also, the government should cover losing bets on the grand national as its not fair on joe public.

...the mind boggles

I've been drinking

Firetrap

I certainly hope not. It's like betting on a horse then going back to the bookie to complain that the horse lost. I for one refused to buy a house because I believed we were experiencing a housing bubble that was going to burst. Now that I have been proved right, why should I bail out people who are in negative equity?

RATM

Yeah I'd agree with Sprockety on this one. There should be a blanket 10-15% negative equity tax. We should slap it on the 40m people in the US who claim Irish ancestry. We did build their country after all, including the Grand Canyon. About time they started paying us something back imo.

CamperMan

I hope not