New property tax

spockety

Irish Times front page this morning reports that Property Tax won't actually be implemented... too politically explosive to try and push ahead with.

Repolho

faceman wrote: »

Running an efficient public service is the duty of the government. Thats what needs to be looked at before targetting people with a tax they cant avoid.

This is why the McCarthy "An Bord Snip" report was commissioned!

Repolho

D3PO wrote: »

So you think this is fair ? Ah sure its the same amount of tax who cares if the low and middle income earners are the ones screwed over, sure were only paying the same amount of tax as a country.

If this government were serious about balancing the tax take out they would start by getting rid of artists exemptions, the rebate to sports persons, remove the cinderella rule (If your irish you should pay tax in ireland just as it is for americans) etc etc

Hitting the more wealthy in our society is one of the objects of property tax. Its not the low and middle earners who will suffer from it.

Also, the report does also suggest tightening up on the residency rules by adding in (i) a test for where you principal residence is and (ii) where is your centre of personal / economic interests and citizenship.

The report is 500+ pages and does suggest a great deal more than just a property tax!

D3PO

Repolho wrote: »

Hitting the more wealthy in our society is one of the objects of property tax. Its not the low and middle earners who will suffer from it.

Also, the report does also suggest tightening up on the residency rules by adding in (i) a test for where you principal residence is and (ii) where is your centre of personal / economic interests and citizenship.

The report is 500+ pages and does suggest a great deal more than just a property tax!

Im aware of that, however this is a property forum hense the disucssion on the property tax.

i wouldnt call the average joe with a 30 - 35 or 40 year mortgage in negative equity who owns a 1 bed or 2 bed apartment or even the standard 3 bed semi d as wealthy.....

SparkyLarks

D3PO wrote: »

Im aware of that, however this is a property forum hense the disucssion on the property tax.

i wouldnt call the average joe with a 30 - 35 or 40 year mortgage in negative equity who owns a 1 bed or 2 bed apartment or even the standard 3 bed semi d as wealthy.....

so should only the wealthy pay property tax, or should noone? I\'m not sure on your point

As a country we pay very little of our GDP in Tax and we need to pay more for the level of services that we as a country seem to want.
from the OECD
# 1 Sweden: 54.2 % of GDP
# 2 Denmark: 48.8 % of GDP
# 3 Finland: 46.9 % of GDP
# 4 Belgium: 45.6 % of GDP
# 5 France: 45.3 % of GDP
# 6 Austria: 43.7 % of GDP
# 7 Italy: 42 % of GDP
# 8 Netherlands: 41.4 % of GDP
# 9 Norway: 40.3 % of GDP
# 10 Germany: 37.9 % of GDP
# 11 United Kingdom: 37.4 % of GDP
# 12 Canada: 35.8 % of GDP
# 13 Switzerland: 35.7 % of GDP
# 14 New Zealand: 35.1 % of GDP
# 15 Australia: 31.5 % of GDP
# 16 Ireland: 31.1 % of GDP
# 17 United States: 29.6 % of GDP
# 18 Japan: 27.1 % of GDP


so either we put it on income, which will cost the country jobs and effect everyone or we put it on somethig else, like property.
It\'s quite easy to put the think in bands and let the amount go up as the prices go up e.g.

Value %
0- €100,000 0%
€100001-€300000 0.15% €150-€450 a year
€300001-€600000 0.25% €750-€1500
€600001-€1200000 0.4% €2400-4800
>€1,200,001 .6% €7200

and as for the bank own the property thing, that is fine as long as you have no problem with the bank coming over unannounced( they own the house and your not a tennant) and using your bedroom as office or storage space.

If they wanted to get really creative why not base the tax on emissions, or BER rating, and the money saved could be used to buy carbon credits.

that would allow people to do something about their tax bill.

Repolho

D3PO wrote: »

i wouldnt call the average joe with a 30 - 35 or 40 year mortgage in negative equity who owns a 1 bed or 2 bed apartment or even the standard 3 bed semi d as wealthy.....

The guy in your example is going to pay the tax on his income?

The recomendations of the commission was to try and move taxes away from directly taxing income in order to reduce the cost of employment in this country.

Kipperhell

D3PO wrote: »

Im aware of that, however this is a property forum hense the disucssion on the property tax.

i wouldnt call the average joe with a 30 - 35 or 40 year mortgage in negative equity who owns a 1 bed or 2 bed apartment or even the standard 3 bed semi d as wealthy.....

I wouldn't call that person Average Joe. As a percentage of the population they would probably be a very small amount. I wouldn't call them wealthy either.

I can't think of anybody who really deserves more tax that would be constructive. Targeting tax on unnecessary expenditure might be a good idea but harder to implement. Cars and fuel are really they only ones I see as viable. What ever gets the least coverage will have cuts and increased taxes. It makes sense to publicise unpopular choices that will never be implemented.

20goto10

How can they base it on property value (either partly or wholly)? Who decides what your property is worth? And seeing as it will most likely be self assesed, whats to stop me valuing my home as €1. Thats the price I have decided its worth and seeing as there is no third party to tell me I'm right or wrong then thats what its worth. Until such time I want to sell it then I'll value it a bit higher

D3PO

SparkyLarks wrote: »

so should only the wealthy pay property tax, or should noone? I\'m not sure on your point

.

no of course we shouldnt just tax the wealthy in terms of property tax. I just think this is such a politically explosive topic right now given the shambles the market is in right now that there are other areas of the mccarthy report that they should be looking at.

As for the GDP % table I dont buy into that at all. The reason its so low is the low level of corporation tax. Which in turn has got many multinationals in which has increased our GDP which has subsequently diluted our tax to GDP ratio.

I dont for one minute believe that that low table reflects what the average tax payer is paying.

SparkyLarks

D3PO wrote: »

no of course we shouldnt just tax the wealthy in terms of property tax. I just think this is such a politically explosive topic right now given the shambles the market is in right now that there are other areas of the mccarthy report that they should be looking at.

As for the GDP % table I dont buy into that at all. The reason its so low is the low level of corporation tax. Which in turn has got many multinationals in which has increased our GDP which has subsequently diluted our tax to GDP ratio.

I dont for one minute believe that that low table reflects what the average tax payer is paying.

Table 2 Comparison of total tax wedge (as percentage of labour costs)1
Country Total Tax wedge 2007 Annual change 2007/06 (in percentage points)
Tax wedge Income tax Employee SSC Employer SSC
(1) (2) (3) (4) (5)
Belgium 55.5 0.0 0.042 0.006 -0.029
Hungary 54.4 2.5 0.550 1.988 -0.045
Germany 52.2 -1.1 0.159 -0.611 -0.613
France 49.2 -1.0 -0.966 0.092 -0.126
Austria 48.5 0.3 0.278 0.000 0.000
Italy 45.9 0.3 0.118 0.227 0.000
Sweden 45.4 -2.4 -2.471 -0.004 0.080
Netherlands 44.0 -0.4 0.601 -1.207 0.250
Finland 43.7 -0.5 -0.431 -0.027 0.000
Czech Republic 42.9 0.3 0.316 0.000 0.000
Poland 42.8 -0.9 0.109 -0.965 0.000
Turkey 42.7 0.0 -0.020 0.000 0.000
Greece 42.3 0.4 0.401 0.000 0.000
Denmark 41.3 0.1 0.134 -0.047 -0.022
Spain 38.9 -0.2 0.014 0.017 -0.265
Slovak Republic 38.5 0.0 0.018 0.000 0.000
Luxembourg 37.5 1.0 0.663 0.315 0.001
Norway 37.5 0.1 0.478 0.031 -0.391
Portugal 37.4 0.0 -0.004 0.000 0.000
United Kingdom 34.1 0.1 0.023 0.019 0.022
Canada 31.3 -0.5 -0.363 -0.090 -0.091
United States 30.0 0.1 0.108 0.000 -0.005
Switzerland 29.6 0.1 0.107 0.000 0.000
Japan 29.3 0.5 0.794 -0.156 -0.174
Iceland 28.3 -1.2 -0.829 -0.009 -0.404
Australia 27.7 -0.6 -0.578 0.000 0.000
Ireland 22.3 -0.7 -0.740 0.035 0.000
New Zealand 21.5 0.5 0.470 0.000 0.000
Korea 19.6 1.4 1.022 0.113 0.263
Mexico 15.3 0.3 0.293 -0.039 0.021
1. Figures of the average worker single without children.
www.oecd.org/dataoecd/14/35/40259873.xls

D3PO

firstly what exactly is the average worker ? and with no childeren that doesnt mean anything.


that table is about as useful as an inflateable dartboard, furthermore its from 2006/07

No reflection to the income levy, pension levy, vat increase, increase in DIRT etc etc. If you want to argue the point at least have up to date data

SparkyLarks

D3PO wrote: »

firstly what exactly is the average worker ? and with no childeren that doesnt mean anything.


that table is about as useful as an inflateable dartboard, furthermore its from 2006/07

No reflection to the income levy, pension levy, vat increase, increase in DIRT etc etc. If you want to argue the point at least have up to date data

Why does having no children invalidate anything.

An average worker is defined as somebody who earns the average income of full-time workers of the country concerned in sectors C-K of the International Standard Industrial Classification (ISIC). The average worker is single, meaning that he or she does not receive any tax relief in respect of a spouse, unmarried partner or child.


income levy adds only 2 5 to the average worker and still brings us to just below the UK you should be able to propose a diffferent figure quite easily

you haven;t provided any figures to back up your claim

but her are 2008 with different Family configuration
and we are still low,
Part I. Taxation of Wage Income (2008)

Table I.6. ´All-in´ average personal income tax rates at AW by family type 1 Country one earner two children

Denmark 29.1%
Netherlands 28.1%
Greece 26.6%
Turkey 26.0%
Hungary 24.6%
Germany 24.1%
Finland 23.1%
Belgium 22.6%
Norway 22.1%
Poland 21.5%
Austria 20.5%
Sweden 19.1%
United Kingdom * 19.1%
France 17.6%
Italy 15.5%
Japan 14.1%
United States 11.3%
Spain 11.2%
Canada 11.0%
Korea 10.0%
Portugal 9.9%
Australia * 9.8%
Switzerland 7.5%
Slovak Republic 5.8%
Iceland 5.6%
Mexico 5.1%
New Zealand* 3.5%
Luxembourg 1.0%
Ireland -4.7%
Czech Republic -7.1%
http://www.oecd.org/dataoecd/34/21/2576404.xls

from here
http://www.oecd.org/document/60/0,3343,en_2649_34533_1942460_1_1_1_1,00.html#tbw

Are you still claiming

D3PO wrote: »

I dont for one minute believe that that low table reflects what the average tax payer is paying

D3PO

those figues mean nothing without putting some context on them.

Quite simply you cannot compare two countries from a couple of OECD reports and argue that tax increases here are justified.


You cannot just say oh were paying x amount less than this country so that justified increasing the taxes to be on a par with them, you need to understand how this impacts the economy, what changes have been made already and how thats likely to impact on both an economic and sociatal level.

Im not an idiot Im aware there is a hole in the department of finances coffers and they need to plug that.

That needs to be done both by reducing expenditure and targetting taxes in an economic and socially responsible manner.

I would content that a property tax and college fees should therfore be off the table.

Narrowing of tax bands, an 3rd teir income tax rate, water charges, and a crbon tax I think people will accept as we need to fix this problem, but certain things given the context of the mess we are in just wont be tolerated.

Im telling you now there will be massive outcry if a property tax comes in

SparkyLarks

D3PO wrote: »

those figues mean nothing without putting some context on them.

Quite simply you cannot compare two countries from a couple of OECD reports and argue that tax increases here are justified.


You cannot just say oh were paying x amount less than this country so that justified increasing the taxes to be on a par with them, you need to understand how this impacts the economy, what changes have been made already and how thats likely to impact on both an economic and sociatal level.

D3PO wrote: »

Yes but my point is
1) we are a low Tax economy
2) to maintain our public services we need to increas more tax
3) Euther we do it through income tax or other Taxes, i.e property etc

D3PO wrote: »

Im not an idiot Im aware there is a hole in the department of finances coffers and they need to plug that.

That needs to be done both by reducing expenditure and targetting taxes in an economic and socially responsible manner.

D3PO wrote: »

I agree but think that
1) we need to increase our overall tax
2) It is econmically and sociall irisponsible to increase the cost of employement with income taxes

D3PO wrote: »

I would content that a property tax and college fees should therfore be off the table.

Narrowing of tax bands, an 3rd teir income tax rate, water charges, and a crbon tax I think people will accept as we need to fix this problem, but certain things given the context of the mess we are in just wont be tolerated.

Im telling you now there will be massive outcry if a property tax comes in

you want to narrow the tax bands? when the average single earner with two children doesn\'t contribute to the state coffers?

If you don;t want a property tax where are you going to find the 4bn that it could provide? That is very expensive water charges.

D3PO

SparkyLarks wrote: »

D3PO wrote: »

those figues mean nothing without putting some context on them.

Quite simply you cannot compare two countries from a couple of OECD reports and argue that tax increases here are justified.


You cannot just say oh were paying x amount less than this country so that justified increasing the taxes to be on a par with them, you need to understand how this impacts the economy, what changes have been made already and how thats likely to impact on both an economic and sociatal level.
Yes but my point is
1) we are a low Tax economy (debateable)
2) to maintain our public services we need to increas more tax (why ? what wrong with getting rid of the waste int he system in which there is plenty)
3) Euther we do it through income tax or other Taxes, i.e property etc


Im not an idiot Im aware there is a hole in the department of finances coffers and they need to plug that.

That needs to be done both by reducing expenditure and targetting taxes in an economic and socially responsible manner.

I agree but think that
1) we need to increase our overall tax (Not arguing this I just think given how fragile the current economic environment is taxes that people have the ability to modiyfy their behavours with should be what we are looking at. i.e carbon tax, water rates, people can modify their behaviour to minimse their tax burden but yet the government still gets tax take)
2) It is econmically and sociall irisponsible to increase the cost of employement with income taxes (Yes its also economically irresponsible for us to have the 3rd highest unemployment benefit being paid given the high rate of unemployment yet we still do it)

I would content that a property tax and college fees should therfore be off the table.

Narrowing of tax bands, an 3rd teir income tax rate, water charges, and a crbon tax I think people will accept as we need to fix this problem, but certain things given the context of the mess we are in just wont be tolerated.

Im telling you now there will be massive outcry if a property tax comes in

you want to narrow the tax bands? when the average single earner with two children doesn\'t contribute to the state coffers?

If you don;t want a property tax where are you going to find the 4bn that it could provide? That is very expensive water charges.

Who says we need to find 4 billion in tax ? We need to close the budgetary gap by 4 billion. That should not be made solely or even using tax as the majority measure to close this gap)

Health care - use of generic drugs, force a renegotiation of consultants fees, increased A&E charges, consilidation of services where appropriate, stop wasting money on crazy things like a new health website that never actually launched etc etc

Social Welfare - means test welfare payments, prime example see that criminal that the indo pointed out last is driving around in BMW's yet is claiming the dole, enforce requirment for persons on welfare to do community service, activities that are financially beneficial to the state

Law enforcement / tribunals - stop wasting money on these tribunals at a cost of billions to the state, increse gardai charge when hired for things like sporting events etc,

Thats before even discussing political expenses, abolish government jet, ministirial cars, remove committe allowances, remove unvouched expenses

I could go onb breaking down other departments opportunities but you get the picture.

There is plenty of scope to save 4 billion in costs without even touching tax. If you believe otherwise your very nieve.

Repolho

D3PO wrote: »

I would content that a property tax and college fees should therfore be off the table.

You haven't given any good reasons as to why a property tax should be off the table other than tat you have already paid stamp duty.

D3PO wrote: »

Narrowing of tax bands, an 3rd teir income tax rate, water charges, and a crbon tax I think people will accept as we need to fix this problem, but certain things given the context of the mess we are in just wont be tolerated.

A 3rd tier would do little to increase the tax take as the highest earners are out of the PAYE system. This would only end up in further hitting middle income earners. Also, as Sparkylarks has said it is economically irresponsible to increase the cost of employment in this country. You only have to look at reasons cited for the recent redundancies at Teva in Waterford for proof of this.

D3PO

Repolho wrote: »

You haven't given any good reasons as to why a property tax should be off the table other than tat you have already paid stamp duty.



A 3rd tier would do little to increase the tax take as the highest earners are out of the PAYE system. This would only end up in further hitting middle income earners. Also, as Sparkylarks has said it is economically irresponsible to increase the cost of employment in this country. You only have to look at reasons cited for the recent redundancies at Teva in Waterford for proof of this.

There is no good reason not to have a property tax. Your not reading my earlier posts fully. What I said is that given the property market situation and the amount of people in negative equity, if the government tried to introduce said tax it would be a political timebomb.

Is that clear enough ?

A 3rd tier would only do little to increase the tax take if other measures werent put in place to ensure that doesnt happen, review taxable exemptions on pension contributions, introduce tax on share options remove completly any semblance of a cinderella rule etc etc

You dont have to make the cost of employment go up in general to increase the tax take from higher earners.

Repolho

D3PO wrote: »

What I said is that given the property market situation and the amount of people in negative equity, if the government tried to introduce said tax it would be a political timebomb.

quote]

The situation in the property market is exactly why we need to move to an annual property tax as opposed to a stamp duty type tax as it is a more stable tax base.

Your point about negative equity is moot. Just because people are in negative equity does not mean they should be exempt from paying tax. Most people who are in negative equity are so because the value of their property has fallen not becuse they have lost jobs or taken pay cuts. Therefore their ability to pay tax is the same.

ronbyrne2005

Who pays stamp duty? Answer is largely the vendor as stamp duty reduces the sales price in competitive market for a house. If stamp duty on say a 400k second house was removed it would jump up by close to the amount of stamp duty that would have been paid. Of course in current market it's hard to disentangle the effects.

If stamp duty is removed before the tax comes in the price of a house will rise CETERIS PARIBUS. Then when tax is brought in it will cause a fall in prices , the extent of which depends on many factors.

D3PO

Repolho wrote: »

Your point about negative equity is moot. Just because people are in negative equity does not mean they should be exempt from paying tax. .

F**k me does anybody read the posts here properly before replying ? Where the hell have I said that.

For the last freaking time. The sentiment of persons in negative equity would cause political uproar if a property tax was introduced.

Im not saying we shouldnt have a property tax im suggesting that if they do have one there should be a proviso exempting persons who paid stamp duty as FTB's for a period of time.

Im not saying persons in negative equity should be exempt, Im not saying persons in negative equity shoudlnt pay tax.

Please read slowly and understand what Im saying Im stick of repeating myself.

Patrickof

D3PO wrote: »

Im not saying we shouldnt have a property tax im suggesting that if they do have one there should be a proviso exempting persons who paid stamp duty as FTB's for a period of time.

Why any reduction at all?

House prices (during the boom) were a function of what the bidder could pay, not a reflection on the cost or otherwise of the premises. The Stamp Duty was one part of what the bidder could pay, the house price the second part. Had there been no stamp duty then the bidder could have afforded to pay more for the property. E.g. (made up figures) I have 1m to spend on a house which implies I can offer 900K to the vendor as I need the other 100K for the stamp. If there were no stamp duty I could offer 1m to the vendor, which in a property boom was quite likely to happen.

So having already paid stamp duty doesn't necessarily put you in a worse off position that had you not had to pay it.

D3PO

Stamp duty = a property tax thats why.

paying stamp duty and paying property tax is double taxation. It doesnt matter if it was a function of what you could pay or not.

Double taxing can not in anyway be defended, regardless of weather the person can afford it or not.

WacoKid

My house has pyrite and thus is valued at 0 at present! They can't chase me for property tax so. Every cloud has a silver lining :cool:

Repolho

D3PO wrote: »

The sentiment of persons in negative equity would cause political uproar if a property tax was introduced.

Sentiment Shouldn't come into it. Any tax should or should not be implemented based on its merits. We don't vote our government to do whats popular, we vote them in to run the country.

D3PO wrote: »

Im not saying we shouldnt have a property tax im suggesting that if they do have one there should be a proviso exempting persons who paid stamp duty as FTB's for a period of time.

I took it from your arguments against property tax throughout the thread that you are against a property tax.

The commission recommends that "Provision should be made for an exemption from the annual property tax for purchasers of principal private residences who paid stamp duty during the previous seven years

Patrickof

D3PO wrote: »

Stamp duty = a property tax thats why.

paying stamp duty and paying property tax is double taxation. It doesnt matter if it was a function of what you could pay or not.

Double taxing can not in anyway be defended, regardless of weather the person can afford it or not.

Stamp Duty is a documentation tax, it's actually a fee for having a document legally "stamped". It also applies to some share transactions.

It is therefore not a property tax at all, so you are not entitled to any exemptions.

(Just to declare my interests, I too paid SD 4 yrs ago so I too would be affected).

D3PO

ok so if you want to get into symantics stamp duty on property is a property related tax.

Im not saying Im entitled to anything, Im just saying that just like old age pensioners revolted about the medial card issue any move to introduce a property tax would most likely be met with similar if not more vociferous protest

DJDC

Anyone who bought a house in Ireland in the last 2/3 years like D3PO and thousands like him/her will of course be deeply opposed to any property tax. Just imagine being mired in negative equity with little prospect of escape and and then being forced to pay a few thousand more each year.

However there is no need to worry, FF will not introduce this tax unless the country resembles something from Sub-Sahara Africa. It is completely against their obsession with land/property development ideologies and would hurt many of them personally due to their strong links with the construction industry, especially at a local level.

D3PO

Repolho wrote: »

Sentiment Shouldn't come into it. Any tax should or should not be implemented based on its merits. We don't vote our government to do whats popular, we vote them in to run the country.

Tell that to the pensioners who had them roll back on the medical card issue :rolleyes:

you really think FF can do anything based on its merits ? They wouldnt know a CBA if it hit them in the arse

The_Conductor

DJDC wrote: »

Anyone who bought a house in Ireland in the last 2/3 years like D3PO and thousands like him/her will of course be deeply opposed to any property tax. Just imagine being mired in negative equity with little prospect of escape and and then being forced to pay a few thousand more each year.

However there is no need to worry, FF will not introduce this tax unless the country resembles something from Sub-Sahara Africa. It is completely against their obsession with land/property development ideologies and would hurt many of them personally due to their strong links with the construction industry, especially at a local level.

Why wouldn't they introduce it? If they don't- they need to find the money elsewhere- its as simple as that. At the moment- being popular is not going to enter the equation- they know they are going to get booted to the kerbside in the next election- regardless of what they do- so they could safely implement any number of plans such as these safe in the knowledge they'd not be held accountable, over and above their current level of accountability.

Even more so than those who bought in the last 2-3 years, what about all those with 800-900 year leases in complexes who are paying stupid annual management charges?

D3PO

DJDC wrote: »

Anyone who bought a house in Ireland in the last 2/3 years like D3PO and thousands like him/her will of course be deeply opposed to any property tax. Just imagine being mired in negative equity with little prospect of escape and and then being forced to pay a few thousand more each year.

Just to clarify I bought about 4 1/2 years ago and wasnt silly enough to take out mortgage with a high ltv rate so I dont believe Im in negative equity ... yet

Weather I have a lot of equity in terms of my property or not is irrelevent and Im not opposed to a property tax per say.

I just think the government has a duty to look at the situation over the last few years and understand their policies and failure to increase the stamp duty bands in line with rising house prices has meant tens of thousands of FTB's have had to pay significant sums of stamp duty over to the government, and in the interest of a balanced way of collecting tax they shoould consider this point before implementing any such tax.