Secton 23 & 50 Properties (the Next Irish Crisis)

Treehouse72

interpoint wrote: »

(i) Section 23
Given that the values of properties with section relief have dropped, the ability of distressed landlords to sell will be limited. This negative impact is compounded by the reduced likelihood of other persons purchasing these properties without the associated relief would be greatly diminished. There is, therefore, a real possibility that vacancy rates and defaults will increase in these developments leading to difficulties for the property market, investors, financial institutions, local Government, cities, local towns and villages.

This is so unintentionally ironic and hilarious it's giving me a bellyache (reminder, it is from an IAVI report, and not the quoted poster).

What the IAVI think they are describing here is the negative impact the abolition of S23/50 would have. But what what they are actually describing is what a property crash looks like. It's as though they've just woken up from a dream and are still bleary-eyed and confused in trying to adjust to the cold light of day. "But prices will fall and everyone will lose out!", they seem to be saying in the tone of someone who's just found buried treasure or worked-out a centuries old mathematical problem. As though it has only dawned on them that perhaps a property bubble wasn't such a great idea.

diceyreilly1

FYI this is on the IAVI members website and they conclude
Conclusion

The submission also outlined a number of recommendations including a phasing out of property tax reliefs on a tiered basis and allowing purchasers to retain some of the tax relief. This could be done on a phased basis in line with the phasing out of Mortgage Interest Relief and Rent Relief. This would provide distressed investors with a mechanism to sell. It would also facilitate transactions, reduce the likelihood of mortgage defaults and provide transactions for the creation of the proposed National Property Price Register.
Members of both organisations will be updated in due course in relation to this.

Do I understand from this and other comments from IPOA etc that there is an acceptance that a watered down version is acceptable. This unfortunately will be disastrous for the small investor like myself as it will set the ball rolling for the incoming government who have certainly shown their intentions to abolish the relief immediately and that the present government was not aggressive enough in their move. Even though Fianna Fail have made this move, the attitude of the incomers will be more aggressive only on the basis that it is seen by them as a good public pleaser.
I will not be able to afford my mortgage payments if this proceeds and the ultimate result will be possible repossession etc which will change my situation from a contributor ( NPPR PRTB VAT etc) to a drain on the public finances and a further negative figure to add to the bank stats.
Some of the general Public have mistakenly,I believe, grouped the small investor/pension investor with the developers/speculators which could not be further from reality and the various political parties are trying to grab unto these perceptions in the run up to an election.

soden12

Good to hear that they were able to push through the cut in minimum wage, the USC, the cuts in social welfare and child benefits but can't push through changes to Section 23 without an extensive discussion process.

Once again the vested interests of gombeen auctioneers and developers have screwed us.

The_Conductor

In all fairness- its just one item that has been chopped from the finance bill- the 90% tax on bankers bonuses is gone too- as are the USC contributions for med card holders etc. The tax treatment of same sex couples, has similarly fallen by the wayside.

They have taken a hatchet to many of the provisions- just to get something through pronto (the reason the opposition are pushing for getting the bill through- even if they are going to be voting against it- is because it saves them from borrowing 6 billion later on........)

Many of the provisions- and doubtless many entirely new things- will make an appearance come November when the 2012 estimates are in the public domain, and we are chopping another 4-5 billion.....