Property Market 2015

Bob24

robp wrote: »

A 2% property tax annually would have many low earners pay less income tax than property tax. It would also crucify landlords. I presume you would match it with a corresponding cut in income tax/USC?

Yes the higher tax could be used to cut income tax and revert some of the budget cuts of the past few years if deemed necessary. But the amounts involved wouldn't have a great impact.

Also, between what we currently have an 2% there is a wide gap. It's all arguable but while I am all in favour of increasing it, 2% seems like too much to me.

And there is another thing not to overlook when thinking of additional cost on households: property tax makes the market more fluid as gives an incentive against speculation - meaning it is making it easier and cheaper to purchase property when you need it (so you pay more tax but save money on the purchase). It pretty much transfers and reduces some profit from private speculators to the government.

Essentially the goal is to make housing less of an investment/speculation tool and more of stable asset necessary to support people's lives.

The_Conductor

Against a 2% property tax- many people are asset rich- but cash poor.
I know of families with one working person living in Georgian houses on Baggot Street, Merrion Square and other locations. They bought when property was cheap- and are mortgaged to the gills. If they had to pay a 2% property tax- ontop of their mortgages- it would be massive- easily 20-25k ontop of everything else from their net income.

It would also be massively unfair- as it would be perceived to be a Dublin tax- the lions share of the tax would be collected in the Dublin region- however, you can be certain any tax benefits wouldn't accrue in a similar fashion.

Unless the property tax was wholly offset against other taxes- notably income tax- it would unfairly target those who are asset rich- but cash poor.......

seamus

The_Conductor wrote: »

Ignoring the swap options- how about making it financially viable for older people to move from large unsuitable properties- into smaller, more suitable, better located properties? I.e. look at how incentives might be employed to persuade the elderly to vacate larger less suitable properties- thus freeing up family homes- which we're not building- for families?

Make the incentives such that to move its a no brainer.......

The HSE nursing home scheme could very well be incorporated into the equation (the Fair Deal Scheme)- and could indeed help keep the elderly for longer in the community- than might otherwise be the case.

El_Dangeroso wrote: »

And no one is suggesting taxing them in particular, just an impactful property tax accross the board that would lead people to live in more appropriate accommodation.

You can use tax as an incentive too. Perhaps a multi-pronged approach;

- One issue with liquidating a property is that it creates tax issues if you try and give the proceeds of that sale to your family before or after death. Or if you invest it in a pension scheme, you'll pay income tax when you draw it out. Maybe some kind of SSIA-type scheme where if you put the proceeds of a PPR sale into a special pension fund, the government will give you 10% on top of it, and it gets paid out to you tax free at retirement. Rock-solid investment for your capital, and a bump to the pension coffers.

- Then incentivise using tax. So specify an LPT band on a per-authority basis below which pensioners are LPT exempt. Encouraging those who can't meet their LPT bills to trade down to something more affordable.

- Throw in other things to smooth the process like a stamp duty exemption where a living pensioner sells and buys their PPR and grants for legal aid and estate agents fees.

robp

Bob24 wrote: »

Yes the higher tax could be used to cut income tax and revert some of the budget cuts of the past few years if deemed necessary. But the amounts involved wouldn't have a great impact.

Also, between what we currently have an 2% there is a wide gap. It's all arguable but while I am all in favour of increasing it, 2% seems like too much to me.

And there is another thing not to overlook when thinking of additional cost on households: property tax makes the market more fluid as gives an incentive against speculation - meaning it is making it easier and cheaper to purchase property when you need it (so you pay more tax but save money on the purchase). It pretty much transfers and reduces some profit from private speculators to the government.

Essentially the goal is to make housing less of an investment/speculation tool and more of stable asset necessary to support people's lives.

Right, more liquidity is a good thing but so is investment. Its critical for the rental market.

The_Conductor wrote: »

Against a 2% property tax- many people are asset rich- but cash poor.
Unless the property tax was wholly offset against other taxes- notably income tax- it would unfairly target those who are asset rich- but cash poor.......

This is real concern for me. If your property doubles in value you pay twice the tax but your quality of life has remained unchanged. I am not hugely fond of taxing the possessions of people.

seamus wrote: »

You can use tax as an incentive too. Perhaps a multi-pronged approach;

- Then incentivise using tax. So specify an LPT band on a per-authority basis below which pensioners are LPT exempt. Encouraging those who can't meet their LPT bills to trade down to something more affordable.

If pensioners are exempt than it defeats the whole purpose no? Wouldn't it send people to cheaper houses not necessarily more suitable houses. Is there real evidence that particular under use of houses in Ireland? Or do young workers just desire larger homes.

Bob24

robp wrote: »

This is real concern for me. If your property doubles in value you pay twice the tax but your quality of life has remained unchanged. I am not hugely fond of taxing the possessions of people.

Definitely agreed, but you can easily alleviate this.

A first possibility would be to cap the amount and/or have reduced rates for primary residences.

A second one is to refine the calculation method for the tax so that it is not just based on the market value of the property (for example also taking the size into account). This would deflect the risk of people getting priced out of their own neighborhood if it becomes much more wealthy (i.e. higher prices) than when they first moved in, causing them not to be able to afford the property tax anymore - at also reduces the "Dublin tax" concern mentioned earlier.

The_Conductor

How about structuring it as a tax- but with a credit for each person living in the residence (equivalent to perhaps the tax due on 100k value of the property- only valid towards the property tax). So- a 1 million property- @ 2% tax would have a 20k tax due. If there were a family of 5 living in the selfsame property- the tax would be lowered by 100k per family member to 500k- and the tax halved.

You would have to structure the tax to take into account the average property prices in various locations- so as not to unfairly target Dublin residences- perhaps akin to the manner in which the current property tax is reduced by 15% for the Dublin councils- with a recommendation of a 15% increase for Sligo and some other counties- who are having difficulty funding local services.

It could be structured in a transparent and fair manner- so everyone paid something- and what you paid was also cognisant of the number of occupants in a dwelling?

So- a single person living in a Georgian mansion- would be penalised- however, a family with children- while they would have to pay tax- there would be account taken of the larger number of people in the residence.

Cuddlesworth

The_Conductor wrote: »

How about structuring it as a tax- but with a credit for each person living in the residence (equivalent to perhaps the tax due on 100k value of the property- only valid towards the property tax). So- a 1 million property- @ 2% tax would have a 20k tax due. If there were a family of 5 living in the selfsame property- the tax would be lowered by 100k per family member to 500k- and the tax halved.

You would have to structure the tax to take into account the average property prices in various locations- so as not to unfairly target Dublin residences- perhaps akin to the manner in which the current property tax is reduced by 15% for the Dublin councils- with a recommendation of a 15% increase for Sligo and some other counties- who are having difficulty funding local services.

It could be structured in a transparent and fair manner- so everyone paid something- and what you paid was also cognisant of the number of occupants in a dwelling?

So- a single person living in a Georgian mansion- would be penalised- however, a family with children- while they would have to pay tax- there would be account taken of the larger number of people in the residence.

Too complicated, too many ways of trying to cheat the system.

A yearly increment to the existing property tax system would allow people to prepare themselves financially for it as well as having a dampening affect on current house prices.

But that would be political suicide so it's never going to happen. If another crash comes we will see a significant increase in property tax as it's a stable taxbase not directly linked to income.

Bob24

Cuddlesworth wrote: »

Too complicated, too many ways of trying to cheat the system.

My thoughts as well ... maintaining an accurate and up to date database of each property's occupancy in Ireland (with fraud detection) would involve
fairly heavy privacy invasion from the State.

helimachoptor

picked up our house keys this afternoon.. finally!

The_Conductor

Cuddlesworth wrote: »

Too complicated, too many ways of trying to cheat the system.

A yearly increment to the existing property tax system would allow people to prepare themselves financially for it as well as having a dampening affect on current house prices.

But that would be political suicide so it's never going to happen. If another crash comes we will see a significant increase in property tax as it's a stable taxbase not directly linked to income.

I don't think its too complicated- its not a million miles away from what Irish Water / DSP are doing- if Irish Water were ever abolished and brought back in house- you could merge the two things together- and have a portion of the levy associated with water- and occupancy details for the property tax? If you have the information for one purpose- why not use it to piggyback for another use?

The_Conductor

helimachoptor wrote: »

picked up our house keys this afternoon.. finally!

Well done. Hope you have many happy years in your new home!

helimachoptor

The_Conductor wrote: »

Well done. Hope you have many happy years in your new home!

we had a bit of an issue with a planning exemption on a utility room, the guys on the contruction forum gave me some good advice and it got resolved pretty quick

now just the 2 months of renovation work

Cuddlesworth

The_Conductor wrote: »

I don't think its too complicated- its not a million miles away from what Irish Water / DSP are doing- if Irish Water were ever abolished and brought back in house- you could merge the two things together- and have a portion of the levy associated with water- and occupancy details for the property tax? If you have the information for one purpose- why not use it to piggyback for another use?

They don't have that data and the Irish water database doesn't have it either.

Its open to abuse to those that can claim to live in 1 location but live in another. Like most of the single mother households. And any type of enforcement is unreasonable.

Bob24

The_Conductor wrote: »

I don't think its too complicated- its not a million miles away from what Irish Water / DSP are doing- if Irish Water were ever abolished and brought back in house- you could merge the two things together- and have a portion of the levy associated with water- and occupancy details for the property tax? If you have the information for one purpose- why not use it to piggyback for another use?

I think if you ask Irish Water for their numbers, they will probably tell you most of the dwellings where there are no kids have a single occupant.

If the data is based on voluntary declaration, many people will say whatever suits them (and will likely not update the information when their situation is changing, unless there is financial gain for them).
I think the government is accepting this for IW as it is no a good time to get tough, the amounts involved are not very high, and pricing bases on occupancy is probably a short term stopgap anyway, but it wouldn't be acceptable for property tax.

If you want the database to be accurate, you need to do something like storing the PPS numbers of the occupiers of each property in Ireland, and conduct regular random checks to discourage people from "lending" their PPS number to others when they don't need it for themselves. But it would (possibly rightly) be seen as a privacy infusion.

mathie

Is the property market inn Dublin on the downward slope?
Is this due to the higher deposit?
Anyone any thoughts or articles on it?

MAJJ

helimachoptor wrote: »

picked up our house keys this afternoon.. finally!

Great and delighted for you. We lost out on yet another one as they hadn't even started probate and are doing it personally not via a solicitor so takes longer.

Best wishes with your new home

@Mattie

Congrats Heli! A long road but glad to hear it worked out for you.

@Mattie: It depends on who you ask. If you look at the CSO figures (based on mortgage drawdowns) Dublin house prices were up 3% (excluding apartments) in August. If you prefer asking prices, Daft's quarterly report suggests Dublin asking prices are down while the rest of the country is, to varying degrees, up.

And some diligent - and greatly appreciated - souls here have been analysing the property price register data (which is based on stamp duty paid; so actual sale prices) and I think the last post I saw suggested the summer had seen prices rise - open to correction on that.

Then you have anecdotes. Lots and lots of anecdotes.

My anecdote: I saw a few agents drop prices in my area of interest during the summer then one of them put all his new properties up by around 10% after the 'positive' CSO data was released!

Also, an agent rang us back about a house we viewed in June. We thought it was way overpriced and the agent said he wouldn't entertain low-ball bids. Suddenly he's entertaining low-ball bids...

But, over many months - and a couple of years - I came to the conclusion that trying to time the market is a waste of time unless you really believe a major crash is imminent.

Bob24

mathie wrote: »

Is the property market inn Dublin on the downward slope?
Is this due to the higher deposit?
Anyone any thoughts or articles on it?

CBI rules are certainly having an effect. At this stage I would personally say the effect has been to stabilise prices rather than reducing them.
I Wouln't be confident in making a prediction for the next few months though ... could go either way.

jay0109

Bob24 wrote: »

CBI rules are certainly having an effect. At this stage I would personally say the effect has been to stabilise prices rather than reducing them.
I Wouln't be confident in making a prediction for the next few months though ... could go either way.

A soft landing

johnp001

Reality hits as market enters calming phase

handlemaster

johnp001 wrote: »

Reality hits as market enters calming phase

Reads like common sence to me. No point in asking what you wont get

Jaketherake

Indeed I was one of the ones who asked for a lot more than the house was worth myself when selling. I saw prices go up way high and so decided that I would ask for far more than I even thought the house was worth.

swampgas

handlemaster wrote: »

Reads like common sense to me. No point in asking what you won't get

I have heard (anecdotally) that the property register is having an effect too.

Because the selling prices are now public it can be seen when asking prices are out of step with what similar properties have gone for. Also people don't want to look like fools and can be genuinely concerned at being seen to have overpaid for a property, as everyone they know will be able to check the register after the fact to see how much they lashed out.

All of which is a good thing, I suppose. Presumably if asking prices and selling prices are getting closer, it's a sign that some sort of stability is returning to the market ...

robnet77

swampgas wrote: »

I have heard (anecdotally) that the property register is having an effect too.

Because the selling prices are now public it can be seen when asking prices are out of step with what similar properties have gone for...

do you (or anyone else) know if it is possible to access pre-2010 sales prices somehow?

Cuddlesworth

robnet77 wrote: »

do you (or anyone else) know if it is possible to access pre-2010 sales prices somehow?

Never going to happen.

johnp001

Noonan and Kelly clash over radical plan for housing

Referring to yesterday's story:
Developers will get sweeteners to sell homes below value

MarkAnthony

100% tax relief on borrowings, worth almost bugger all to many. Certainly not worth the increased risk.

CGT - LOL - Seriously. There are many of us renting due to neg equity. Not a hope it will recover in the next 20 years, what use is CGT relief.

All this is doing is encouraging yet more paddy property investors.

gaius c

johnp001 wrote: »

Noonan and Kelly clash over radical plan for housing

Referring to yesterday's story:
Developers will get sweeteners to sell homes below value

I wouldn't give him credit very often but fair play to Noonan for shooting down that nonsense. Who on earth decides what "market value" is when nobody will pay it?

Stick your Ballycullen 3 bed up for 400k, sell for 300k and get the government to give you the "shortfall"?

These peoples' minds have been warped by over-exposure to the LTEV bollockology behind NAMA.

handlemaster

http://www.independent.ie/business/personal-finance/property-mortgages/central-bank-rules-hit-dublin-house-prices-with-a-dose-of-reality-31599423.html

indo running with prices have leveled off in dublin

handlemaster

http://www.irishtimes.com/budget-2016-how-do-we-fix-the-housing-crisis-1.2385755

Interesting video by the Irish times