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Investors ruining chances for First Time Buyers - regulations?

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    #152
    Villa05
    Registered Users Posts: 4,621 ✭✭✭Villa05


    MouseTail wrote:
    Everyone should be able to buy a home, anywhere, for 3 times their income. This would absolutely happen if there were more repossessions, and we taxed the bejasus out of anyone with grey hair.

    Your posts are slipping from there normal high standard.
    Do you think that it's fair that a couple on 36000 should pay 3,600 less in tax than a younger couple because they are over 65.
    Building is not happening partly because of the uncertainty regarding repossessions. Currently there may be demand in a particular area for 10 properties. There maybe 12 properties in that area where the mortgage has not been paid for a year or 2. Why build when this cloud is hanging over your investment
    3.5 times income has been set by the central bank. Anyone building a new house should factor this into their numbers.


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    #153
    witchgirl26
    Registered Users Posts: 2,148 ✭✭✭witchgirl26


    Riverireland wrote: »
    The one with cancer totally understand this. She would only have around €130k to buy with and it still working but not enough cash to buy something she would like. Has several pets so needs a garden.

    It does depend on where you're looking but I have seen smaller houses with gardens going for under 130k recently. Wouldn't be an easy search but still doable.
    Riverireland wrote: »
    The second person would make around €170k but has lost her job recently and again is worried she doesn't have enough to cash buy, will get a small mortgage if she gets re employed.

    I think the point is why not allow them to let out their entire houses tax free as it is both their only property. 12k for rent a room tax free surely should be the same for the entire house if it is ones only house. It would also encourage rents to remain within this level. Maybe I'm missing something?

    But how would they separate people like the ones you're referring to and those gaming that to make some more money? 12k a year for renting out a room in your house is pretty good. It's €1000 a month tax free which, considering house-share rent prices, you wouldn't get much more than that for 2 rooms. Unless you have a rather large house & have more rooms to rent.


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    #154
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    She is looking and yes there are houses but she works 5 days a week in Dublin,the area she is living in is quite built up and stressful for her given her health.

    I think you can make 12k by renting rooms. 2 to3 spare rooms will do that in Dublin, neither want to go down this route though. It should be easy to regulate, everyone pays property tax therefor your property's are registered to the owners. Certainly no regulation re rent a room, you don't even have to register. My point is rooms or a whole house what is the difference if it's still 12k per annum.


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    #155
    witchgirl26
    Registered Users Posts: 2,148 ✭✭✭witchgirl26


    Riverireland wrote: »
    I think you can make 12k by renting rooms. 2 to3 spare rooms will do that in Dublin, neither want to go down this route though. It should be easy to regulate, everyone pays property tax therefor your property's are registered to you.

    I don't understand this bit. Do you mean that they should be allowed to rent out their houses, while not living there, because they property tax? Property tax and tax on income are two different things. And if you receive rent, it's an income and should be taxed as such.


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    #156
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Villa05 wrote: »
    Your posts are slipping from there normal high standard.
    Do you think that it's fair that a couple on 36000 should pay 3,600 less in tax than a younger couple because they are over 65.

    I would imagine that has a tiny tiny influence on rental prices and subsequent yields. I'm open to you disproving that with FACTS rather than more anecdotes.
    Villa05 wrote: »
    Building is not happening partly because of the uncertainty regarding repossessions.

    Anything at all to back that up, why would a builder not build when every other post in this thread demonstrates there is more than enough demand?
    Villa05 wrote: »
    3.5 times income has been set by the central bank. Anyone building a new house should factor this into their numbers.
    Builders are taking into account prices that the market will support, clearly the market is still supporting current prices.

    The best way to push prices down is increased supply but then you'll have the people that have already bought up in arms.


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    #157
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    Graham wrote: »
    That FTB of yours must be loaded if he's been able to pay rent and save the deposit to buy his own place. Doesn't sound like someone that would need special assistance buying tbh.

    I saved over e100k while renting and I still got outbid by investors/2nd home buyers


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    #158
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    lima wrote: »
    I saved over e100k while renting and I still got outbid by investors/2nd home buyers

    You're not bidding enough then.


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    #159
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    witchgirl26 wrote: »
    I don't understand this bit. Do you mean that they should be allowed to rent out their houses, while not living there, because they property tax? Property tax and tax on income are two different things. And if you receive rent, it's an income and should be taxed as such.

    Ok, person A lives on own house and rents out two rooms earning an extra 12k per year tax free.

    Person B, rents out entire house and receives 12k. Person B needs to rent smaller place elsewhere while working. Person B pays tax on income at highest rate on the 12k rent. Person A makes a net gain of 12k from the rent a room scheme.

    My reference to property tax was only due to it making it easy to find people with multiple properties.


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    #160
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    Graham wrote: »
    You're not bidding enough then.

    I am bidding more than enough but I'm not willing to risk buying a high-risk asset in this country, see where that got the last bunch of people


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    #161
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Riverireland wrote: »
    Ok, person A lives on own house and rents out two rooms earning an extra 12k per year tax free.

    Person B, rents out entire house and receives 12k. Person B needs to rent smaller please elsewhere while working. Person B pays tax on income at highest rate on the 12k rent. Person A makes a net gain of 12k from the rent a room scheme.

    My reference to property tax was only due to it making it easy to find people with multiple properties.

    The rent a room scheme was largely put in place to bring accommodation (rooms) to the market that would otherwise not have been made available.


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    #162
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    lima wrote: »
    I am bidding more than enough but I'm not willing to risk buying a high-risk asset in this country, see where that got the last bunch of people

    If you're buying as a home then you shouldn't be too bothered about the short-term fluctuations of the property market.

    You're either underbidding compared to market rates or your bidding on properties you can't afford. Bid on cheaper properties or bid higher. I can't see you getting too much sympathy because you can't get the property you want at the price you want especially if you have €100k to play with.


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    #163
    witchgirl26
    Registered Users Posts: 2,148 ✭✭✭witchgirl26


    Riverireland wrote: »
    Ok, person A lives on own house and rents out two rooms earning an extra 12k per year tax free.

    Person B, rents out entire house and receives 12k. Person B needs to rent smaller place elsewhere while working. Person B pays tax on income at highest rate on the 12k rent. Person A makes a net gain of 12k from the rent a room scheme.

    My reference to property tax was only due to it making it easy to find people with multiple properties.

    Because with Person A it's their PPR. Bills will be in their name & they wouldn't have any obligations as a landlord. They can kick someone out if there are issues in the space of 24 hours & they can sell up with as little notice too.

    With Person B - their PPR is the house that they are renting in essence, not the house that they are renting out. They also have obligations as a landlord & the bills would not be in their name. They would also be able to earn more potentially renting the full house out rather than just a room. And they wouldn't be able to sell as easily. Also their mortgage would potentially have to be reclassified as a buy to let as that's what it is.


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    #164
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    Graham wrote: »
    The rent a room scheme was largely put in place to bring accommodation (rooms) to the market that would otherwise not have been made available.

    Understood, but why no for an entire house at the same threshold if it someone's only house? It would allow movement in the market, keep rents low and allow people to have more opportunity to live in a house size that suits their needs. Personally I think it would most benefit family's with young children that are stuck in their original purchase, must be a nightmare with young kids!

    Any reasons why not?


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    #165
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    Graham wrote: »
    If you're buying as a home then you shouldn't be too bothered about the short-term fluctuations of the property market.

    You're either underbidding compared to market rates or your bidding on properties you can't afford. Bid on cheaper properties or bid higher. I can't see you getting too much sympathy because you can't get the property you want at the price you want especially if you have €100k to play with.

    I'm not looking for sympathy, I am empathising with the OP and all other FTB's who are struggling in the face of the wealthy older generation who were far more intertwined in the boom/bust than we were.


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    #166
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    witchgirl26 wrote: »
    Because with Person A it's their PPR. Bills will be in their name & they wouldn't have any obligations as a landlord. They can kick someone out if there are issues in the space of 24 hours & they can sell up with as little notice too.

    With Person B - their PPR is the house that they are renting in essence, not the house that they are renting out. They also have obligations as a landlord & the bills would not be in their name. They would also be able to earn more potentially renting the full house out rather than just a room. And they wouldn't be able to sell as easily. Also their mortgage would potentially have to be reclassified as a buy to let as that's what it is.

    These problems can all be overcome to help with what is certainly a housing crisis. I work with professionals with young family's who can't get a mortgage big enough to buy in Dublin. Find it ridiculously difficult to find houses to rent and dread getting a call that their landlord is selling. It could be done for a 5 year period, while this shortage goes on. There are solutions to this just not much thinking outside the box!


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    #167
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    lima wrote: »
    I'm not looking for sympathy, I am empathising with the OP and all other FTB's who are struggling in the face of the wealthy older generation who were far more intertwined in the boom/bust than we were.

    Agree with you Lima, There are a lot of 30 something's who have been locked out of the property market for 10 years. There either needs to be public housing or affordable housing. We need one or the other, ideally both!


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    #168
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    lima wrote: »
    I'm not looking for sympathy, I am empathising with the OP and all other FTB's who are struggling in the face of the wealthy older generation who were far more intertwined in the boom/bust than we were.

    Newsflash, the 'older generation' are almost always more wealthy as they have been around longer to accumulate such wealth.

    To blame the boom/bust on the 'older generation' is just laughable, the only major advantage I can see they had is the opportunity to buy property at much much lower prices, something they may be able to benefit from at retirement if they downsize. Just remember than when that generation did buy, it was a lot harder to borrow money and they generally bought to put a roof over their family rather than the investment opportunity you appear to be confusing it with.

    I don't think you can complain if you have €100k to put down on a home, that's substantially more than many, many of the older generation could ever get their hands on and vastly more than most FTBers.


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    #169
    witchgirl26
    Registered Users Posts: 2,148 ✭✭✭witchgirl26


    Riverireland wrote: »
    These problems can all be overcome to help with what is certainly a housing crisis. I work with professionals with young family's who can't get a mortgage big enough to buy in Dublin. Find it ridiculously difficult to find houses to rent and dread getting a call that their landlord is selling. It could be done for a 5 year period, while this shortage goes on. There are solutions to this just not much thinking outside the box!

    Honestly we're still waiting for the effects of the 20% deposit etc to kick in and that won't happen for at least another 6 months while those with mortgage approval from prior are still in the market. There is no point in bringing in a raft of changes until it can be seen as to how this will affect house prices.

    I can sympathise with those people - I've been there myself but unfortunately it does mean that you have to look outside the areas you normally would. If you'd asked me a few years ago would I have considered living where I currently am, I would have said no but it's a good area, quite happy there & was much cheaper than some of the other areas I would have preferred back then.

    There is a shortage of particular sizes of houses - not everyone is going to be moving from a 3 bed house to further away from Dublin, freeing them up for young families. That is exactly the type of place that we're short of. All it would free up for the most part is apartments.

    Allowing someone to become a landlord tax free isn't the answer. And could lead to people charging anything for properties because it's not like they'll have to pay tax on it. And why should they gain an extra income to afford the house they want when others can't because they have to pay the rents?

    I think a major change needs to happen to people's expectations as to what size house they do need (I recognise that people do need to move up but if they can't afford the 4 bed when it's a family of 3 that aren't having more kids, then let go of the 4th bedroom) and also the areas that they're looking in.


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    #170
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Riverireland wrote: »
    Agree with you graham. There are a lot of 30 something's who have been locked out of the property market for 10 years. There either needs to be public housing or affordable housing. We need one or the other, ideally both!

    I'm not a huge fan of public housing, certainly not the way it's done here or the UK. I would be in favour of stimulating house building but even that has to be done with great care in case it has the knock-on effect of moving more of the population back into the major cities and particularly Dublin.


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    #171
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    Witch girl, simple question. Why be able to earn 12k rent a room tax free but not be able to elect to rent your entire house for the same price? Your objections aren't strong enough! The rent a room landlords have to additional outgoing. The people renting out their entire house have to rent elsewhere. I'm not seeing the problem here, a 12k ceiling is what it is.


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    #172
    RainyDay
    Closed Accounts Posts: 6,925 ✭✭✭RainyDay


    Riverireland wrote: »
    The entire property situation needs an immediate overhaul. I have 2 single friends who have 3/4 bedroom houses in Dublin. Both would like to relocate circa 30 miles outside of Dublin to smaller houses. Both still have mortgages circa 50% house value. They can rent rooms out and remain in their houses earning 12k tax free but if they rent their houses out enabling family's to move in then half thir rent will be taken in tax
    They only pay tax on the profit they earn from renting, just like any other business.


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    #173
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    Graham wrote: »
    I'm not a huge fan of public housing, certainly not the way it's done here or the UK. I would be in favour of stimulating house building but even that has to be done with great care in case it has the knock-on effect of moving more of the population back into the major cities and particularly Dublin.

    I've never lived in it myself graham, doesn't look too appealing. But we also have a huge homeless crisis and a lack of employment opportunities for people with certain skills or no skills. If employment is available in cities then people have to live there.


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    #174
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    RainyDay wrote: »
    They only pay tax on the profit they earn from renting, just like any other business.

    They have an additional outgoing by renting elsewhere which makes it economically unviable to rent out their house and rent elsewhere. Why not write off one against the other.


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    #175
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Riverireland wrote: »
    I've never lived in it myself graham, doesn't look too appealing. But we also have a huge homeless crisis and a lack of employment opportunities for people with certain skills or no skills. If employment is available in cities then people have to live there.

    Absolutely, no argument from me there. It's the whole below-market rent for life side of public housing that I particularly disagree with but that's an entirely separate conversation.


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    #176
    witchgirl26
    Registered Users Posts: 2,148 ✭✭✭witchgirl26


    Riverireland wrote: »
    Witch girl, simple question. Why be able to earn 12k rent a room tax free but not be able to elect to rent your entire house for the same price? Your objections aren't strong enough! The rent a room landlords have to additional outgoing. The elope renting out their entire house have to rent elsewhere. I'm not seeing the problem here, a 12k ceiling is what it is.

    Because they also don't have any responsibilities as landlords.

    If you rent a full property you are legally responsible as a landlord. Therefore you get the benefit of the money but also the responsibilities and legalities that go with it. Also the whole issue of the mortgage on a PPR is taken out as such. A buy to let mortgage is a different thing and if you are renting out a property solely, your mortgage provider has to be informed and could change the terms of your mortgage including the interest rate based on that.

    And honestly for the places we're talking about will €12k a year really cover all of the outgoings that you have as a landlord including the payment of the mortgage on the property.

    It's also open to a rake of abuse which is what they're trying to make sure doesn't happen.

    You rent a room in your house - you deal with none of that and it can revert to being solely your house in 24 hours if it doesn't work out.

    It's a 12k ceiling on renting out a room because that was deemed the most tax free you should get for it. You can rent out a room in house for more than that but again it would be classed as income and you would have to pay tax on it. Like any other income that you earn no matter the source.


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    #177
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    Pat Kenny covering buying and selling property next, might be interesting.


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    #178
    Graham
    Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Riverireland wrote: »
    Witch girl, simple question. Why be able to earn 12k rent a room tax free but not be able to elect to rent your entire house for the same price? Your objections aren't strong enough! The rent a room landlords have to additional outgoing. The people renting out their entire house have to rent elsewhere. I'm not seeing the problem here, a 12k ceiling is what it is.

    Because allowing 12k taxfree to rent a room bring extra accommodation into the market without reducing the current tax-take.

    Allowing all landlords an additional tax free allowance of €12k for rental income would substantially decrease tax-take and would more than likely make rental income more appealing. That's only likely to push property prices up further as people move into tax-free income. It's a bad idea all round.


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    #179
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    Graham wrote: »
    Because allowing 12k taxfree to rent a room bring extra accommodation into the market without reducing the current tax-take.

    Allowing all landlords an additional tax free allowance of €12k for rental income would substantially decrease tax-take and would more than likely make rental income more appealing. That's only likely to push property prices up further as people move into tax-free income. It's a bad idea all round.

    I'm not talking about landlords but people in ppis who want to move elsewhere. Only own one house which they can't move out of due to the current tax implications. Their other option is to rent a few rooms out and make 12k tax free. They would still be paring property tax so I don't see how that would impact current tax take? They are not going to move out as it stands so they are living in unsuitable accommodation. Should the decide to invest in more than one home the they would no longer be eligible! It would disinsentivise property speculation if anything.


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    #180
    Riverireland
    Closed Accounts Posts: 833 ✭✭✭Riverireland


    witchgirl26 wrote: »
    Because they also don't have any responsibilities as landlords.

    If you rent a full property you are legally responsible as a landlord. Therefore you get the benefit of the money but also the responsibilities and legalities that go with it. Also the whole issue of the mortgage on a PPR is taken out as such. A buy to let mortgage is a different thing and if you are renting out a property solely, your mortgage provider has to be informed and could change the terms of your mortgage including the interest rate based on that.

    And honestly for the places we're talking about will €12k a year really cover all of the outgoings that you have as a landlord including the payment of the mortgage on the property.

    It's also open to a rake of abuse which is what they're trying to make sure doesn't happen.

    You rent a room in your house - you deal with none of that and it can revert to being solely your house in 24 hours if it doesn't work out.

    It's a 12k ceiling on renting out a room because that was deemed the most tax free you should get for it. You can rent out a room in house for more than that but again it would be classed as income and you would have to pay tax on it. Like any other income that you earn no matter the source.

    God help the people renting rooms if they can be put out in 24 hours!


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    #181
    NewDirection
    Registered Users Posts: 223 ✭✭NewDirection


    Riverireland wrote: »
    I'm not talking about landlords but people in ppis who want to move elsewhere. Only own one house which they can't move out of due to the current tax implications. Their other option is to rent a few rooms out and make 12k tax free. They would still be paring property tax so I don't see how that would impact current tax take? They are not going to move out as it stands so they are living in unsuitable accommodation. Should the decide to invest in more than one home the they would no longer be eligible! It would disinsentivise property speculation if anything.
    You are suggesting being able to make tax free income from renting a second property up to 12K, if I'm picking you up right? Sure that would attract way more investors than are currently in the market. I'd buy a second property if I could do that. (apologies if I'm picking you up wrong).

    Do you mean investing as opposed to speculation on the last line? I fail to see how it disincentives speculation?


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