Extensions 'may attract extra property tax'

MMAGirl

hognef wrote: »

Say the €50k extension were to increase your tax by €100 per year, and that you'll be living in the house for another 50 years. That's a total of €5k extra tax. Just spend €45k on the extension instead. It'll still give you a permanently better house, rather than a week or two in the sun for the next few of years.

Getting used to the idea of living it up in the sun with the money now. Extension can go jump. We don't need it that badly anyway if I'm honest. This thought was just the convincer. We want costs to come down not go up. And property taxes are going just one way.

runawaybishop

tim9002 wrote: »

It's the principal. Do you think that they don't upgrade their houses in countries where property taxes are linked to value? Of course they do.

And Germany has increased their standard VAT rate from 16% to 19% in recent years so as percentage increase, it is greater than the increase we have had.

The public feel they can't afford to pay more tax, where is the money to upgrade coming from?

tim9002

runawaybishop wrote: »

And in Ireland we have taxes that they do not with different rates. The European tax system isn't like for like.

You are correct, taxation across Europe varies greatly and in most other European countries property taxes/local council charges are much more.

djimi

MMAGirl wrote: »

30,000 in the bank to go towards extension.
Supposed to be Darwin down the other 20,000 in two weeks for the builder to start.
Husband doesn't want an extension. I do.

So now after this news Im agreeing with the husband. Going to tell the bank and the builder we aren't going ahead because we aren't spending 50k in order to spend even more in taxes every year from now on.

Brother has a house in florida that he doesn't use since he got sick. Wel'll just go there a couple of times a year with the 30k we have saved and live it up. Builder will have to find other work and the bank will have to prey on someone else that needs a loan.

Have you sat down and worked out how much extra the extension is going to cost you in tax? Seems a bit daft to deprive yourself of an improvement to your home for the sake of what might turn out to be a small increase to an annual bill.

runawaybishop

tim9002 wrote: »

You are correct, taxation across Europe varies greatly and in most other European countries property taxes/local council charges are much more.

As are the services provided.

EricPraline

barrackali wrote: »

I don't get why some of the other posters can't accept the obvious here, if you have a bigger/better house than your neighbour... you should pay a higher rate of property tax.

My main issue here is that valuation for the property tax is already very murky, and this remark about extensions is complicating the matter further.

How do you measure a "bigger/better house"? Square footage of the house? Size of the site? Energy rating? Build quality? Architectural aesthetics?

The same applies to an extension. Do you penalise a larger, more energy-efficient kitchen extension more than a poorly-built small extension? Should usage count (e.g bedrooms to increase occupancy V recreation space)? If it reduces your garden or parking area considerably, does that mitigate the increased valuation?

Frankly I don't trust the government to accurately value properties, especially when it is in their interest to over-value property to increase revenue.

Ireland: Where we take good ideas from elsewhere an implement them badly.

Victor

Ray Palmer wrote: »

There should at least be a credit given to energy efficiency.

This is a tax that is there primarily to raise money, not change behaviour. If they wanted to change behaviour, they would apply the full whack of excise to heating fuels.

You do realise that energy efficiency grants are available?

tim9002

runawaybishop wrote: »

As are the services provided.

True. But the whole problem here is that during the great Bertie giveaway years most people on average incomes paid little or no direct taxes. (excluding VAT, VRT etc). Instead of providing services to people, Bertie gave them cash!

For example take a couple earning 50k with a mortgage and a couple of kids. By the time you factored in mortgage interest relief, children's allowance, early childhood supplement, that couple were probably net receipients from the state and I haven't even mentioned SSIAs. You can't run a country like that and so it has proved to be.

Bertie was relying on transactional taxes from a credit binge and a property ponzi scheme and when it came to a head it ended in tears.

runawaybishop

tim9002 wrote: »

True. But the whole problem here is that during the great Bertie giveaway years most people on average incomes paid little or no direct taxes. (excluding VAT, VRT etc). Instead of providing services to people, Bertie gave them cash!

For example take a couple earning 50k with a mortgage and a couple of kids. By the time you factored in mortgage interest relief, children's allowance, early childhood supplement, that couple were probably net receipients from the state and I haven't even mentioned SSIAs. You can't run a country like that and so it has proved to be.

Bertie was relying on transactional taxes from a credit binge and a property ponzi scheme and when it came to a head it ended in tears.

I don't disagree - issue is that for many people their house is costing them a fortune now so to go from no tax to lots of tax is extremely difficult, if not impossible, for a large set of society.

tim9002

runawaybishop wrote: »

I don't disagree - issue is that for many people their house is costing them a fortune now so to go from no tax to lots of tax is extremely difficult, if not impossible, for a large set of society.

Yes it is difficult. The property tax system should have been reformed years ago as high stamp duty rates are very unfair, an annual system is much fairer. The method of calculation can be argued about.

It should have been reformed about 13/14 years ago when Fianna Fail started lowering income taxes which was the right thing to do as they were too high at the time. If they had introduced an annual property tax system then in exchange for the lowering of income taxes we wouldn't be in as much trouble as we are now.

P. Breathnach

Ray Palmer wrote: »

... There should at least be a credit given to energy efficiency...

I don't need a tax incentive for that. I'm incentivised by reductions in my energy bills.

Bicycle

I have no problem with a property tax.

BUT what I do have a problem with is the way in which houses will be valued.

For example in the last month I had to get a property valued for a family member. We were told by the valuer that there are different approaches to the valuation of houses depending on the reason for the valuation.

For example, if it is a house for sale, they will go above the average expected in order to try to maximise the gain for the seller.

If on the other hand it is a probate valuation, they will go below the average expected so that there is a certain amount of leeway. If the house is valued high and sells low then the beneficiaries will be paying tax unnecessarily. At least if they value low and the house sells high, the situation can be balanced by paying Capital Gains on the difference because Revenue will most certainly not refund any overpayment to the estate.

And at the end of the day, the true market value of a house is what a seller on a given day is prepared to pay for it in consultation with their bank.

A house near me sold a couple of years ago for a crazily inflated price purely because the buyer was cash rich and wanted to be near a family member. It doesn't follow on that the rest of the houses in the area, extensions or no extensions are worth even remotely near that amount.

davet82

Ray Palmer wrote: »

While it maybe obvious that an extension increaseses the value of the property it doesn't mean the council provide additional services. Given that why should there be additional charges for service? The charge is meant to pay for the services.

you actually bought that line? :pac:

i agree with you but lets face it, this about paying bondholders/banks/debt nothing to do with services no matter how much people want to dress it up.

.......................................................................................................

if you live in an estate of 3 bedroom houses and you build a 5 bedroom house with a swimming pool on a corner in that estate with a bit of extra land then you should pay the extra tax because your house is worth more, its only fair?

EricPraline

Bicycle wrote: »

For example in the last month I had to get a property valued for a family member. We were told by the valuer that there are different approaches to the valuation of houses depending on the reason for the valuation.

I have encountered the same, and valuations can fluctuate considerably, depending on the valuer in question, and the motivation of the person/company paying them.

Again, it is hard to believe that the third parties who will provide valuations for the government will not be influenced by the desire to raise revenue.

rubberdiddies

djimi wrote: »

Essentially what you are saying is that you have a problem with the tax being attached to the value of the property. This being the case, what fairer system do you propose they use to calculate the tax to be paid?

i personally feel that the property tax should be just that a tax on property, not on value.

tax bands should be uniform across the country based on property square foot, not on location.

so a person with a 3 bed semi 1300sq ft in Dublin should pay exactly the same as a person with a 3 bed semi 1300sq ft in leitrim. dont see why there should be a difference.

tim9002

rubberdiddies wrote: »

i personally feel that the property tax should be just that a tax on property, not on value.

tax bands should be uniform across the country based on property square foot, not on location.

so a person with a 3 bed semi 1300sq ft in Dublin should pay exactly the same as a person with a 3 bed semi 1300sq ft in leitrim. dont see why there should be a difference.

I think size should have been a factor but that value should be one also. It might have made people think twice about some of the 4000ft plus muck mansions you see littering the Irish countryside.

ledgebag1

what if you bought a house with an extension? or a garage conversion.

That's a bit ridiculous. considering a lot of people are also in negative equity on purchases.

Not to go off topic, but the value of a house and the rebuild value are completely different. Which is a nonsense and now the property tax is essentially going to be charge at another value

Demented

L1011

The tax is and always was going to be on value. Wittering about extensions is a distraction. You buy a dearer house, you pay more tax.

ledgebag1

MYOB wrote: »

The tax is and always was going to be on value. Wittering about extensions is a distraction. You buy a dearer house, you pay more tax.

right so

jmayo

yosemite_sam wrote: »

I'm sorry but in other countries the occupier pays which is a fairer system, why should the bum living at the states expense escape paying for the house they are provided with

That is not always the case and AFAIK in the Netherlands, the resident pays a portion and the owner pays a portion.

yosemite_sam wrote: »

Yep, chump politicians making an absolute pigs ear out of a country. All I can say is I am shocked at how soft Irish people have become, when Thatcher tried to impose the poll tax it finished her as a Prime minister and we are lapping this up.

AFAIK the Poll tax was just a tax on people, this is a tax on what a person owns and is not a flat rate.

djimi wrote: »

Essentially what you are saying is that you have a problem with the tax being attached to the value of the property. This being the case, what fairer system do you propose they use to calculate the tax to be paid?

The system where someone else pays it I would bet.

MMAGirl wrote: »

30,000 in the bank to go towards extension.
Supposed to be Darwin down the other 20,000 in two weeks for the builder to start.
Husband doesn't want an extension. I do.

So now after this news Im agreeing with the husband. Going to tell the bank and the builder we aren't going ahead because we aren't spending 50k in order to spend even more in taxes every year from now on.

Brother has a house in florida that he doesn't use since he got sick. Wel'll just go there a couple of times a year with the 30k we have saved and live it up. Builder will have to find other work and the bank will have to prey on someone else that needs a loan.

Ask the brother how much are his proeprty taxes in Florida while you are at it.
Maybe you can help him pay his taxes over there.

Tigger

rubberdiddies wrote: »

i personally feel that the property tax should be just that a tax on property, not on value.

tax bands should be uniform across the country based on property square foot, not on location.

so a person with a 3 bed semi 1300sq ft in Dublin should pay exactly the same as a person with a 3 bed semi 1300sq ft in leitrim. dont see why there should be a difference.

in leitrimm there is no public transport
water is likley on a scheme extra expense
sewage is probably and extra expense
its leitrim

its fair that the property is taxed less than in dublin

value of property is a fair way to judge this tax and i'm pretty sure its how its done in most countries

jmayo

rubberdiddies wrote: »

i personally feel that the property tax should be just that a tax on property, not on value.

tax bands should be uniform across the country based on property square foot, not on location.

so a person with a 3 bed semi 1300sq ft in Dublin should pay exactly the same as a person with a 3 bed semi 1300sq ft in leitrim. dont see why there should be a difference.

Let me guess you live in Dublin and not Leitrim ?

Have you ever wondered why location matters when buying a house ?

rubberdiddies

jmayo wrote: »

Let me guess you live in Dublin and not Leitrim ?

Have you ever wondered why location matters when buying a house ?

yes
no

the point of this thread was to say that I feel tradesmen will be most impacted by this. again its just my opinion (and the opinion of tradesmen friends), but we will know more towards the end of this year.

what we all appear to be overlooking is that the 0.18% tax this year was the intro tax. Look back over this thread in 5 years time when that's increased to 0.25%

consumer spending is low.
it will be lower this year as a direct result of the last budget.
this will result in many many more unemployed at the end of this year.
builders who are hanging on by a thread will be affected by this.
This legislation is being brought in by unqualified incompetent people. Just because they introduce something, such as this tax, doesn't mean it's the right thing to do.
Surely it will impact the housing market to its detriment

at the end of the day I can luckily afford to pay my property tax, I can also afford to pay next years water tax and god knows whatever other tax scheme they come up with next. doesn't mean though that I agree with the way it is calculated.

MMAGirl

jmayo wrote: »

Ask the brother how much are his proeprty taxes in Florida while you are at it.
Maybe you can help him pay his taxes over there.

Who cares. I wont be paying them.
The transaction taxes on the money I spend over there will be much lower than here too.

EricPraline

Tigger wrote: »

in leitrimm there is no public transport
water is likley on a scheme extra expense
sewage is probably and extra expense
its leitrim
its fair that the property is taxed less than in dublin

Hence why a property in Dublin that has those facilities will cost many multiples of a property of equivalent size in Leitrim. The benefits of urban living that you mention are already factored into the asking price.

L1011

MMAGirl wrote: »

30,000 in the bank to go towards extension.
Supposed to be Darwin down the other 20,000 in two weeks for the builder to start.
Husband doesn't want an extension. I do.

So now after this news Im agreeing with the husband. Going to tell the bank and the builder we aren't going ahead because we aren't spending 50k in order to spend even more in taxes every year from now on.

Brother has a house in florida that he doesn't use since he got sick. Wel'll just go there a couple of times a year with the 30k we have saved and live it up. Builder will have to find other work and the bank will have to prey on someone else that needs a loan.

So you thought that increasing the value of your house wouldn't impact on a value based tax?

Have you considered how utterly and comically illogical that is?

Bullseye1

Don't worry folks property prices are still dropping. I'm sure the government will take this into account by reducing what you have to pay .

dvpower

MYOB wrote: »

The tax is and always was going to be on value. Wittering about extensions is a distraction. You buy a dearer house, you pay more tax.

There was some talk of it being a site value tax - so people who invested in improving their house wouldn't have to pay extra tax on the improvements.

dvpower

Bullseye1 wrote: »

Don't worry folks property prices are still dropping. I'm sure the government will take this into account by reducing what you have to pay .

The valuations (and the rate) last for 3 years, so you won't pay less if property prices fall or more if they increase.

flintash

MMAGirl wrote: »

Who cares. I wont be paying them.
The transaction taxes on the money I spend over there will be much lower than here too.

May I ask is your hair blond ?
Prepared to spend 50k on the spot but cannot/wouldn't want to spare 50 Euros years after?