Do you think that tenants are ready for Property Tax-inspired rent increases?

djimi

rubberdiddies wrote: »

i think we might be going off topic here....
please tell me why you think it's a business and why I'm better off facing this reality etc? I genuinely would like your reason.

Im going to turn the question around and ask you why you think that you are not running a business? You are providing a service/product (Im not which would be the correct term) for which someone is paying you to avail of. You pay tax on said income. You are the supplier, your customer is the tenant.

rubberdiddies

djimi wrote: »

Im going to turn the question around and ask you why you think that you are not running a business? You are providing a service/product (Im not which would be the correct term) for which someone is paying you to avail of. You pay tax on said income. You are the supplier, your customer is the tenant.

but i'm not a registered business. I'm not in it in any way to make a profit. I cover costs, just about. And some years I don't. I didn't buy property during the boom. I ended up with a property. I can't sell it.

with the exception of the rental agreement, I have a very informal and friendly relationship with my tenants. I don't consider them as customers.

If It was a business there are a whole lot of legal things to go through, which doesnt apply to landlords like me renting out a property in my own name.

djimi

rubberdiddies wrote: »

but i'm not a registered business. I'm not in it in any way to make a profit. I cover costs, just about. And some years I don't. I didn't buy property during the boom. I ended up with a property. I can't sell it.

with the exception of the rental agreement, I have a very informal and friendly relationship with my tenants. I don't consider them as customers.

If It was a business there are a whole lot of legal things to go through, which doesnt apply to landlords like me renting out a property in my own name.

I think you are confusing business with company. You are not running a company. You are running a business.

rubberdiddies

djimi wrote: »

I think you are confusing business with company. You are not running a company. You are running a business.

honestly, speak to Revenue and the CRO and they will tell you whether its a business or not. No point in discussing this here when we are clearly going to disagree.

OMD

gurramok wrote: »

You've a nice way with words and using that to get around rules. Tenants know the rules too, they will not get shafted on this ownership tax by rogue landlords.

Most tenants do know the rules. I agree there. The problem is that you don't know the rules and are making arguments based on this ignorance. As I said, inform yourself then come back to the debate.

gurramok

rubberdiddies wrote: »

Do you go into shops and give out when they put the prices of food up? Or do you still pay it?

do you give out when the publican puts up the price of a pint, or do you still pay it?

My financial issues are of no concern to the tenant. Exactly. So if I want to charge extra to pass on a tax then I can. and I will. It's my property. not yours or the tenants. if they don't want to pay it they can leave. No hard feelings etc.

What? There is competition in retailing, each supermarket competes against the other. What we have here is landlords en masse putting up the rent solely based on an ownership tax, that's cartel behaviour.

Exactly, you have a property, an asset. Tenants do not have assets, they rely on your business to have a roof over their heads, you provide a service for a monetary return. Tenants are the last source to extract extra revenue from. What's stopping you borrowing money to pay for the tax?

rubberdiddies

gurramok wrote: »

What? There is competition in retailing, each supermarket competes against the other. What we have here is landlords en masse putting up the rent solely based on an ownership tax, that's cartel behaviour.

Exactly, you have a property, an asset. Tenants do not have assets, they rely on your business to have a roof over their heads, you provide a service for a monetary return. Tenants are the last source to extract extra revenue from. What's stopping you borrowing money to pay for the tax?

theres no talk of landlords en masse putting up rent.
there's more competition in the rental market than there is in the grocery market IMO.

I'm saying that I will be increasing the rent.
but my next door neighbour might not be. so theres a choice for the tenant to go live there. Good thing is though, its a choice. no one is forcing a tenant to live in a particular property. if you cant afford a certain property then downsize.

mikemac1

Playing a game with vacancy periods

It's fine to ask the tenant for more rent money and then watch them laugh at you and leave.

Just a month or even a few weeks of vacancy and you'll lost the 600 euro I'm seeing in this thread, you lost a good tenant and your next tenants may be unreliable

Putting up the price is what you do when you're inbetween tenants and you can test the market and interest, not when you've a good long term tenant who treats the place with respect.

gurramok

rubberdiddies wrote: »

theres no talk of landlords en masse putting up rent.
there's more competition in the rental market than there is in the grocery market IMO.

I'm saying that I will be increasing the rent.
but my next door neighbour might not be. so theres a choice for the tenant to go live there. Good thing is though, its a choice. no one is forcing a tenant to live in a particular property. if you cant afford a certain property then downsize.

There is talk here of LL's(including yourself) passing on the ownership tax to the tenants. Replicated across the market, thats cartel behaviour. The tax is an issue between the LL and the govt, its nothing to do with the tenant. If an occupancy tax came in, then its an issue between the tenant and the govt, we'd be guaranteed that no LL will reduce the rent then.

As stated earlier, you take that big risk dealing with your tenant. Don't come crying here when that tenant takes retaliatory action and you lose even more money.

rubberdiddies

gurramok wrote: »

There is talk here of LL's(including yourself) passing on the ownership tax to the tenants. Replicated across the market, thats cartel behaviour. The tax is an issue between the LL and the govt, its nothing to do with the tenant. If an occupancy tax came in, then its an issue between the tenant and the govt, we'd be guaranteed that no LL will reduce the rent then.

As stated earlier, you take that big risk dealing with your tenant. Don't come crying here when that tenant takes retaliatory action and you lose even more money.

And I'm happy to take that risk
QED (for me anyway!)

OMD

gurramok wrote: »

There is talk here of LL's(including yourself) passing on the ownership tax to the tenants. Replicated across the market, thats cartel behaviour. The tax is an issue between the LL and the govt, its nothing to do with the tenant. If an occupancy tax came in, then its an issue between the tenant and the govt, we'd be guaranteed that no LL will reduce the rent then.

As stated earlier, you take that big risk dealing with your tenant. Don't come crying here when that tenant takes retaliatory action and you lose even more money.

Of course the responsibility to pay the tax is the landlords in the same way that the responsibility to pay VAT is the retailers. However a retailer will pass on the cost of VAT to the customer in the same way that landlords will be responsible for paying property tax but will be expected to pass the charge to their customers i.e. tenants. When business rates go up businesses pass that cost to customers. Some may chose not to in the hope of getting increased business. In the same way some landlords may pass on the cost of property tax some may not. However as the cost effects everyone it is reasonable to assume the majority will pass the tax on. Again in the same way as when VAT increased last year the majority/all businesses eventually passed the cost to customers.

xper

gurramok wrote: »

...So what? A landlords financial problem is not a tenants concern. ...

That's right. So it doesn't matter why a landlord might be increasing the rent. He may be motivated by the fact he has a new tax to pay or he might just feel like generating more income from his asset. As a tenant your only argument against a rent increase is whether it is to a level above the open market rate for the property concerned. The reason for the rent increase is not considered in any dispute and the landlord does not have to provide you with one.

I also have to point out that you are being completely two faced in asserting that a landlord's financial problems are not a tenant's concern while earlier arguing that landlords should use increased costs to justify rent increases because tenants are not rolling in money. You cannot have it both ways.

You've a nice way with words and using that to get around rules. Tenants know the rules too, they will not get shafted on this ownership tax by rogue landlords.

You are just plain wrong about the rules. I suspect your viewpoint is being informed by a few cases reported during the year on this forum of landlords asking/demanding tenants to pay the initial €100 property tax over an above their rent. Where that occurred it was clearly wrong, in breach of the tenancy and unenforcible. But that is a quite different scenario to a rent review which both tenants and landlords can initiate annually.

gurramok

OMD wrote: »

Of course the responsibility to pay the tax is the landlords in the same way that the responsibility to pay VAT is the retailers. However a retailer will pass on the cost of VAT to the customer in the same way that landlords will be responsible for paying property tax but will be expected to pass the charge to their customers i.e. tenants. When business rates go up businesses pass that cost to customers. Some may chose not to in the hope of getting increased business. In the same way some landlords may pass on the cost of property tax some may not. However as the cost effects everyone it is reasonable to assume the majority will pass the tax on. Again in the same way as when VAT increased last year the majority/all businesses eventually passed the cost to customers.

You just don't understand do you?

VAT is a requirement by law for the retailer to pay to the govt, it is passed down from the origin of the goods source to the point of sale. Each party involved pays VAT to the Revenue, its a legal requirement. If a retailer does not charge VAT at the point of sale, they will be in serious trouble. Lets help you.
http://www.citizensinformation.ie/en/money_and_tax/tax/duties_and_vat/value_added_tax.html

Please point out in the Residential Tenancies Act 2004 where it says the Property tax(ownership tax) can be passed onto the tenant? It ain't there.

xper

rubberdiddies wrote: »

but i'm not a registered business. I'm not in it in any way to make a profit. I cover costs, just about. And some years I don't. I didn't buy property during the boom. I ended up with a property. I can't sell it.

with the exception of the rental agreement, I have a very informal and friendly relationship with my tenants. I don't consider them as customers.

If It was a business there are a whole lot of legal things to go through, which doesnt apply to landlords like me renting out a property in my own name.

busi·ness   [biz-nis] noun
1. an occupation, profession, or trade: His business is poultry farming.
2. the purchase and sale of goods in an attempt to make a profit.
3. a person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise or concern.
...

See definition 3? That's you!

Lots of posters in here refer to themselves as 'accidental' or 'reluctant' landlords. It no doubt accurately describes the manner of their entry into the business but the adjective is redundant. You are a landlord. Full Stop. And the risks, benefits, responsibilities, rewards and laws that come with it apply to you just as much as they apply to the guy with an assembled portfolio of 50 properties.

As a tenant, I have no difficulty recognising that my relationship with my landlord, nice chap as he is to shoot the breeze with and all, is very definitely a business relationship and that I have legal obligations to him a he does to me.

gurramok

xper wrote: »

That's right. So it doesn't matter why a landlord might be increasing the rent. He may be motivated by the fact he has a new tax to pay or he might just feel like generating more income from his asset. As a tenant your only argument against a rent increase is whether it is to a level above the open market rate for the property concerned. The reason for the rent increase is not considered in any dispute and the landlord does not have to provide you with one.

I also have to point out that you are being completely two faced in asserting that a landlord's financial problems are not a tenant's concern while earlier arguing that landlords should use increased costs to justify rent increases because tenants are not rolling in money. You cannot have it both ways.

What are you on about? Why is it the concern of a tenant if a landlords costs increase? If a landlord cannot afford to support one of his properties, tough. Your argument reminds me of that scam landlord artist in Killiney who hid the fact he owned a couple of dozen of apartments in IRL & UK while claiming poverty.

It ain't too faced, landlords have assets still worth alot of money, tenants generally don't. A small minority may have affluence at hand but there's a reason why up to 40% of tenancies are supported by Rent Supplement, those tenants in particular are poor. If tenants were cashcows, alot will be buying property right now in order to escape high rents.

xper wrote: »

You are just plain wrong about the rules. I suspect your viewpoint is being informed by a few cases reported during the year on this forum of landlords asking/demanding tenants to pay the initial €100 property tax over an above their rent. Where that occurred it was clearly wrong, in breach of the tenancy and unenforcible. But that is a quite different scenario to a rent review which both tenants and landlords can initiate annually.

How different? The new property tax is just another ownership tax like the 2nd home tax, right? What you envisage is a whole cartel of landlords conducting rent reviews when the property tax comes in, using those rent reviews to pass on the tax under the guise of the 'market rate'. That's a cartel and is wrong.

Also, please point out in the Residential Tenancies Act 2004 where it says the Property tax(ownership tax) can be passed onto the tenant? It ain't there.

Stheno

Isn't there a longer term proposal to have a system like the french with both a property tax and an occupier/resident tax?

rubberdiddies

xper wrote: »

busi·ness   [biz-nis] noun
1. an occupation, profession, or trade: His business is poultry farming.
2. the purchase and sale of goods in an attempt to make a profit.
3. a person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise or concern.
...

See definition 3? That's you!

Lots of posters in here refer to themselves as 'accidental' or 'reluctant' landlords. It no doubt accurately describes the manner of their entry into the business but the adjective is redundant. You are a landlord. Full Stop. And the risks, benefits, responsibilities, rewards and laws that come with it apply to you just as much as they apply to the guy with an assembled portfolio of 50 properties.

As a tenant, I have no difficulty recognising that my relationship with my landlord, nice chap as he is to shoot the breeze with and all, is very definitely a business relationship and that I have legal obligations to him a he does to me.

For a person to be classed as a business he/she must be registered as a sole trader. I am not.

As I suggested to a previous poster, ring the CRO and Revenue who will clear this up for you.

I'm not bothered whether or not people think its a business or not. I answer to no one (well except for the wife, the boss, revenue, the kids etc etc doh!). I don't class it as a business and it's not a business in the legal sense so that's all that matters to me

djimi

gurramok wrote: »

Also, please point out in the Residential Tenancies Act 2004 where it says the Property tax(ownership tax) can be passed onto the tenant? It ain't there.

All associates charges relating to a tenancy can be passed onto the tenant in the form of the rental price. You should not need the RTA to tell you this. Where else do you think the rental price comes from; do you think that it is some magic figure that the landlord pulls out of his arse because it sounds right?

murphaph

gurramok wrote: »

So what? A landlords financial problem is not a tenants concern. As said above, if they're broke, get out of the business of letting out property.

Pretty harsh tbh. If I said "broke tenants should be flung onto the streets the second they miss a rent payment" I'm sure you'd say it was harsh too.

My point wasn't that tenants should really care about a landlord's financial position (though there is some symbiosis there: my tenants would not be happy for me to be declared bankrupt as it would introduce massive uncertainty into their lives..."will the new owners kick us out?, drive up the rent?" etc.).

The government is imposing a new tax on property. We all need somewhere to live, so we'll all end up paying a bigger or smaller part of that (except social welfare tenants or those in local authority housing, who will all get off Scot free). Do you think landlords in Germany are paying the property tax here out of their "other income" or do you think it's coming out of the rents received?

It'll just take a while in Ireland, but it will filter through into the rents charged, make no mistake about that!

murphaph

gurramok wrote: »

What are you on about? Why is it the concern of a tenant if a landlords costs increase?.

Huh? If the cost of property ownership goes up, you think the cost of obtaining accommodation should remain static? How does that work? Who would bother renting property out?

Do you think landlords should be some sort of buffer between tenants and real world prices of property ownership? I just don't get your position tbh.

murphaph

Stheno wrote: »

Isn't there a longer term proposal to have a system like the french with both a property tax and an occupier/resident tax?

I bet you a million Euro that French landlords build the cost of the property tax into the rent charged, even if they can't pass on random increases (the rate usually remains static for years, so is very predictable).

Same in Germany. I may have to rent somewhere else in a couple of years (growing family) and I'll rent my flat here out. I will build the cost of the property tax into rent charged, and will pass on the other "taxes" which are out of my control (imposed by the city for local services) directly to the tenant as allowed by law.

xper

gurramok wrote: »

Also, please point out in the Residential Tenancies Act 2004 where it says the Property tax(ownership tax) can be passed onto the tenant? It ain't there.

Chapter 2, Part 3 covers 'Rent and Rent Reviews'. Pr.2 S.20-21 permits a landlord to change the rent amount after twelve months have passed since the commencement of the tenancy or the last rent review. Pr.2 S.19 precludes setting the rent at "greater than the amount of the market rent for that tenancy at that time".
That latter point is the only restriction as to what the rent amount may be. How the landlord arrives at the new rent amount is entirely up to him. The Act has nothing to say about it. He is not legally obliged to explain or justify why he is changing the rent amount to the tenant or anyone else.

murphaph

xper wrote: »

busi·ness   [biz-nis] noun
1. an occupation, profession, or trade: His business is poultry farming.
2. the purchase and sale of goods in an attempt to make a profit.
3. a person, partnership, or corporation engaged in commerce, manufacturing, or a service; profit-seeking enterprise or concern.
...

Tell Revenue!

If it was treated as a business under Irish law, I would be able to claim ALL related expenses when calculating my tax liability.

These would include the NPPR and 100% of mortgage interest. In Germany it is a business. If I choose to rent my place out here, I will be able to claim ALL expenses associated with it when calculating my tax bill, including reasonable costs for my own time (expressly forbidden by Revenue in Ireland).

OMD

gurramok wrote: »

You just don't understand do you?

VAT is a requirement by law for the retailer to pay to the govt, it is passed down from the origin of the goods source to the point of sale. Each party involved pays VAT to the Revenue, its a legal requirement. If a retailer does not charge VAT at the point of sale, they will be in serious trouble. Lets help you.
http://www.citizensinformation.ie/en/money_and_tax/tax/duties_and_vat/value_added_tax.html

Please point out in the Residential Tenancies Act 2004 where it says the Property tax(ownership tax) can be passed onto the tenant? It ain't there.

You want me to point out references in a 2004 act to a tax that 8 years later we still don't have the details?

I assume at this stage you realise you were wrong and are simply arguing for arguments sake. Either way I don't think anything else I say will enlighten you further.

gurramok

OMD wrote: »

You want me to point out references in a 2004 act to a tax that 8 years later we still don't have the details?

I assume at this stage you realise you were wrong and are simply arguing for arguments sake. Either way I don't think anything else I say will enlighten you further.

No, not wrong. You've been wrong comparing VAT to the property tax. You said earlier:

OMD wrote:

Increasing the rent to reflect increased costs(such as tax) is totally legal. It is even expected and the government have made this clear frequently.

Now where is your source to say that the property tax is to be paid by the tenant?

gurramok

murphaph wrote: »

Huh? If the cost of property ownership goes up, you think the cost of obtaining accommodation should remain static? How does that work? Who would bother renting property out?

Do you think landlords should be some sort of buffer between tenants and real world prices of property ownership? I just don't get your position tbh.

In that case, where does the buck stop?

If LL's mortgages go up, should tenants pay the extra cost?

If the 2nd property tax goes up from 200quid, should tenants pay the extra cost?

If the management fees go up, should tenants pay the extra cost?

djimi

gurramok wrote: »

In that case, where does the buck stop?

If LL's mortgages go up, should tenants pay the extra cost?

If the 2nd property tax goes up from 200quid, should tenants pay the extra cost?

If the management fees go up, should tenants pay the extra cost?

The landlord is entitled to charge what they like up to the rental market value of the property. This means that they can build in any charge/tax/whatever into the rent, provided it doesnt raise the rent above the rental market value. Im not really sure what it is about this concept that you do not grasp.

gurramok

xper wrote: »

Chapter 2, Part 3 covers 'Rent and Rent Reviews'. Pr.2 S.20-21 permits a landlord to change the rent amount after twelve months have passed since the commencement of the tenancy or the last rent review. Pr.2 S.19 precludes setting the rent at "greater than the amount of the market rent for that tenancy at that time".
That latter point is the only restriction as to what the rent amount may be. How the landlord arrives at the new rent amount is entirely up to him. The Act has nothing to say about it. He is not legally obliged to explain or justify why he is changing the rent amount to the tenant or anyone else.

djimi wrote:

All associates charges relating to a tenancy can be passed onto the tenant in the form of the rental price. You should not need the RTA to tell you this. Where else do you think the rental price comes from; do you think that it is some magic figure that the landlord pulls out of his arse because it sounds right?

As said earlier, the rent review is a loophole that LL's acting as a cartel are going to exploit as a front for passing the property tax onto the tenant. Is it right or even morally right? Hell no. Its an ownership tax, not an occupancy tax.

The tenants also have a right to repudiate such a rise which is under the guise of 'a rising market rate' which will be set by a cartel of LL's raising the price across the board at pretty much the same time. As said earlier, its down to each individual LL as to whether its worth his/her financial cost to mess with a good tenant, the wiser ones would not as tenants ain't stupid.

gurramok

djimi wrote: »

The landlord is entitled to charge what they like up to the rental market value of the property. This means that they can build in any charge/tax/whatever into the rent, provided it doesnt raise the rent above the rental market value. Im not really sure what it is about this concept that you do not grasp.

They're all doing it at the same time using the loophole, do you not realise this? All tenants should refuse to pay the tax as well and play hard ball. Its about time this country had a powerful tenants association like in France to fight for tenants rights.

sunnysoutheast

gurramok wrote: »

In that case, where does the buck stop?

If LL's mortgages go up, should tenants pay the extra cost?

If the 2nd property tax goes up from 200quid, should tenants pay the extra cost?

If the management fees go up, should tenants pay the extra cost?

Yes, yes and yes. Up to a limit set by the maximum market rent for the property.

Tenants are free to move. Landlords are free to make a decision to charge less than the market rent to retain a good tenant.

There is no cartel and no loophole. Tenants have far too many rights as it is.