Media Article: Cash sweeteners to get elderly couples to sell family homes

The_Conductor

From today's Indo


Jist of the article- singletons, the elderly and those without children- would get incentives to downsize from family homes into smaller properties. Cash incentives would be offered to grease the wheels as it were.

NAMA are the instigators of this proposal.

Downside- in the current environment- where very limited development of any nature is happening- prices are depressed for larger properties- whereas the prices of smaller units- has shot up (not least as a result of the Central Bank's new mortgage deposit rules).

Other proposals (also by NAMA)

■ reducing the VAT rate paid by builders and developers to stimulate the housing market;

■ appointing a full-time independent advisor to assist the Government with issues surrounding the delivery of housing;

■ implementing measures to provide infrastructure and aid construction.

4ensic15

Moving people out of home which are too large for them is a rational move to make better use of the housing stock. It is not enough that there are cash incentives. Many elderly people wish to remain in their own area and also need the financial security ownership of a valuable asset brings. The process of selling a house is extremely stressful and it is no surprise that elderly people avoid doing it. If the scheme is to work a holistic approach must be taken to ensure that the right people are encouraged to move and that the process is made as stress free as possible and their concerns are met.
I do not believe that simply making a sum of money available is sufficient.
The elderly home owners may need help finding alternative housing, interim accommodation, investment advice and assurances about their medical care into the future. This would need very proactive local authorities and social workers to ensure that it runs properly and elderly people are not induced into making moves which cause them serious problems and worry.

Toots

TBH I don't think I'd be very happy putting elderly parents into an apartment. I live in an apartment, and while I like it, I don't think they're very OAP friendly - for example, just getting the shopping in from the car, right now my mum can pull her car into her driveway and practically up to the front door, there's no way to do that in an apartment. Even now, I'm 30 and when I go shopping there are certain items I have to leave in the car until my husband gets home from work because I just physically couldn't carry them for that distance.

Also these empty-nesters have probably worked their whole lives paying off the mortgage on the home, they should be left in peace to enjoy their retirement there.

pablo128

While it's probably for a different thread, wouldn't they have more success inducing folk to sell their holiday homes and multiple properties?

Then again maybe not seeing as many politicians are also landlords......

the_syco

My response to NAMA is; f**k off and die.

The old folk will have paid off their mortgage, and done up their houses to a standard that makes their life more comfortable, and now the government, as a way to ease the housing crisis, want to turf them into smaller houses? For some cash?

I can see this going badly, but for people without a voice.

Mrs OBumble

Toots wrote: »

Also these empty-nesters have probably worked their whole lives paying off the mortgage on the home, they should be left in peace to enjoy their retirement there.

In places which are too big for their needs, and which they cannot afford to heat / maintain?

Apartments that don't have grounds requiring external maintenance can be very older-person friendly, especially if they're one-story and in a complex with a lift. Supermarkets will deliver shopping to the door.

A poster here who whose work takes them to lots of houses has written about visiting places where the person hasn't had a shower for 10+ years, because they cannot get up the stairs to the bathroom any more. Mr OBumble has even visited a place locally where there's dangerous roof tiles and the plumbing is marginal - but the old lad who owns it cannot afford to get it fixed. Very sad, because there really is no solution which can be offered to people in that sort of situation at the moment.

Baybay

I'd happily sell my house but it's about more than a cash sweetener.
I'm not elderly but my children are young adults & a large family home, while useful periodically, is a bit of a handling on an everyday basis.
I've been looking for another property within a ten kilometre radius of where I currently live for over a year now but there is nothing suitable.
I don't think I'm overly picky either.
My mother, who is elderly, chose very carefully when she downsized nineteen years ago & lives very successfully & independently with few modifications, other than grab rails, for age in her house.
Most of what's on the market have stairs or lifts, steep slopes up or down to front doors, too far away from shops, banks etc to walk, are beside schools so access is chaotic at least twice a day or are just not quite big enough.

Mrs OBumble

Mrs OBumble wrote: »

In places which are too big for their needs, and which they cannot afford to heat / maintain?

Apartments that don't have grounds requiring external maintenance can be very older-person friendly, especially if they're one-story and in a complex with a lift. Supermarkets will deliver shopping to the door.

Patents want to leave their houses to their children, that's one of the reasons to own a house in the first place, so you can pass it on to your children.

To me the idea of moving out of your home, to another house is just silly. Why would a person want to leave their home and more so sell it rather than leave it to one of their children who will live there and raise their family.

The term downsizing should just be forgotten about, it's a term alien to most Irish people and rightly so.

Jeju

NAMA suggest a potential partial solution to a problem that potentially could make problems worse then suggest potential remedies that may fix it.

Villa05

While house hunting in 2014, we came across a 4 bed where the elderly occupants were looking to downsize to a 2 bed bungalow 100metres away. The 2 bed bungalow sold for 3% less than the 4 bed house. Bungalow also required renovation works

You could tell that the EA agent was milking it as they were handling both sales and the bungalow was nowhere near worth what it sold for in comparison to other sales around the same time

Villa05

the_syco wrote: »

My response to NAMA is; f**k off and die..

A bit like Fred and Rosemary West giving advise on Childcare

NAMA owns most of the devlopment land in and around Dublin, How come they did not propose a tax on unused development sites.

Tax on wasting resources is far more beneficial than taxing work for example

The_Conductor

We could really do with studying how other countries deal with retirement and downsizing. My gran lived in a lovely retirement village in Pennsylvania in the US. It was a whole village designed around the needs, and evolving needs, of retirees- and it worked by selling a lifetime lease on the properties to the residents (aka the interest in the property expired 3 calendar months after the person passed away).

We have started a few very interesting sheltered living arrangements for the elderly here- however, not on the scale, nor with the facilities necessary- to make it really work.

Married to this problem at the moment- is the shortage of *all* development happening. Its all well and good advocating that the elderly downsize- and providing incentives for them to do so- but if they have nowhere to downsize to- its moot........

One of the comments in this thread about apartment living not suiting elderly- because they can't drive their car to the door to unload their shopping in apartments- simply need not be true.

I live in a development of apartments and townhouses. I can drive to my door to unload my shopping and then move my car to one of my parking spaces. Of more concern in townhouses- are all the internal stairs (the ground floor units excepted of course). Not sure if any of you have ever tried 3 flights of stairs with a broken leg, torn ligaments- or indeed holding multiple young children. Its not for the faint hearted.

Married to poor development- and silly property prices- we need to stop looking at retirement planning as a local issue- and raise it to national level. I'd also argue that we need both a public and a private sector approach to this- as they are very different approaches. We also need a recognition that the world has changed- and there is not a parent at home with young children anymore- who can look after an elderly parent.

Todays retirees- are going to have to be a testbed for what works and what does not- because in 20 years time- we may have as many as 4 times the number of retirees in Ireland as we now have.

Living Off The Splash

We have 4 empty bedrooms in our home.

As the number of grandchildren increase these rooms can often have a new lease of life when the parents are away or having a night out. Because we have the space we can store buggies and prams, suitcases etc.

When our adult children moved out it's not as if they took their "stuff" with them. These toys/books are also being reused again. If we were to downsize our free storage unit service would have to close.

We live close to UCD. We could rent out these rooms for a small fortune.

We could rent out our entire house for 6 months and disappear to Spain over the winter.

Yes, our home is expensive to heat. Yes, our property tax is very costly. The maintenance of this property is ongoing.

We live in an area that we like. We have all the amenities that we require close at hand. Our immediate neighbours are of a similar age. We have plenty of free parking space. We have a nice garden, designed and planted by us.

Maybe if I could purchase a site within a half mile of where I currently live and get Duncan to design the Eco house for me and Dermot Bannon to do his bit, maybe I might consider it.

As a person gets older it's more about comfort than anything else. If a person is comfortable and happy where they are then why change anything.

The_Conductor

Living Off The Splash - I get what you're saying.
The point though- is that there is a societal cost associated with elderly people not vacating family homes. We are not building 'family homes' and by and large- have not in our major urban areas- since approx. 1994 (when the regs changed). Sure- small numbers were built- however- they were very much in the minority.

If your house is full of suitcases, baby and children's things etc- I'd argue that what you *need* to do- is sustained trips to your local V de P shop- to be honest- when I read your post- while I sympathised with what you were saying- it screamed out 'excuses' at me..........

You don't want to move- and you are willing to accept that there is a cost associated with staying in the property- and meet that cost. So be it.

The flip side of the 'carrot' to incentivise people to downsize- has to be a stick- possibly through progressively higher property taxes- to encourage people to do so. At the moment Irish property taxes- odious as they are- are probably at a level of less than a quarter what their effective rates should be- and in addition- they should be structured to take into account both the value of the property- and the size of the property (the fact that it doesn't also enumerate the size of the property- is an inbuilt inequity- that discriminates against those with larger homes in urban areas- particularly Galway and Dublin- while providing a perverse incentive to build larger homes elsewhere).

In any event its moot- until such time as there are viable alternate accommodation options available to the elderly- and there most certainly aren't alternate options at the moment- we may as well be arguing about faeries and hobgoblins- as incentives or not- you can't move somewhere else- if you've got nowhere to go (though- I have to admit- the Spanish option has a distinct allure).

loyatemu

Emotive issue, but everyone's circumstances will be different.

There's no suggestion people will be forced out of their houses, but an incentive might make some give some thought to their future requirements.

keeponhurling

the_syco wrote: »

My response to NAMA is; f**k off and die.

The old folk will have paid off their mortgage, and done up their houses to a standard that makes their life more comfortable, and now the government, as a way to ease the housing crisis, want to turf them into smaller houses? For some cash?

I can see this going badly, but for people without a voice.

But nobody is being forced to do anything, it's just an extra sweetener ?

jd

This might suit some people, and I'd have no problem with help to make it easier. It's not coercion, or a window/bedroom tax.

Living Off The Splash

I started off with a 3 bed semi with mortgage. I moved to a detached bungalow with mortgage. I now have a larger detached house with associated mortgage now paid off. All at considerably higher interest rates than are currently being paid. Plus all the stamp duties etc that went with these moves.

Over the years I have converted attics, put in new kitchens, replaced windows, fireplaces, doors.

I just didn't land in my current larger house. It was chosen. It was earned. Now it is suggested that I should have some sort of room tax added to my property because I am now being seen as selfish?

I can assure you that I am not making excuses to not move by saying that I have a lot of junk in my home. I know a skip would sort this out over the weekend. I am not sure if the St.Vincent de Paul would take the grand children though.

Everybody is different. I know people who purchased their first home and are still in it 40 years later. My own parents lived in their last home for over 40 years. Let people make their own choices.

Sure we might as well tax the motorists who clog up our roads every morning for not filling all their seats with passengers.

As you get older the wherewithal to do things can diminish. It's not as easy anymore to do stuff.

If I head off to Spain for 6 months I still have to pay my full years property tax, my road tax, my fixed costs on my utility bills, broadband, TV licence etc. My insurance company will have problems if my house is unoccupied for more than a month. Will my health insurance cover me. All these things are still costing me when I am sitting in the sun, as well as paying for sitting in the sun.

I am quite happy to downsize but on my terms and if the job is made easier for me to do this. Will my car insurance company allow me to cancel my insurance for 6 months and then renew it again 6 months later? Can I get a TV licence for 6 months?

The Student

Some older people like to remain in those areas they feel most comfortable in. As a way of increasing the housing some incentives for building Granny flats should be given. A family member could sell their own house and move back to the family home and their parents could avail of the Granny flat. This arrangement could become the norm for familys going forward.

jd

Living Off The Splash wrote:

I just didn't land in my current larger house. It was chosen. It was earned. Now it is suggested that I should have some sort of room tax added to my property because I am now being seen as selfish?

What is being suggested is a sweetener to move, not a tax if you don't

The_Conductor

I would suggest that there should be some sort of a room tax- across the board- nothing whatsoever to do with the age of the occupants. Its nuts that there is no cognisance of the size of a property taken into account when determining its property tax. In a similar manner- I would also suggest that those who live in apartments or other leasehold type situations- should be allowed offset their management charges- at very least at their marginal rate of tax- against their property tax.

Its not a stick specifically targetted at the elderly- it should be equally applicable across the board- and in addition- it might be viewed by some as an incentive to move into apartments or other leasehold type properties- as the annual tax would thus be considerably less.

One thing though- we'd need an economic rate of property tax charged- at present it is less than 1/4 what it should be (which is at least partially why some local authorities are in financial trouble (e.g. hedge cutting has ceased and the local library closed in Tubbercurry- for example- as there is nothing in the kitty to pay for them.)

I'd also suggest that the mafia gangsters currently controlling refuse collection etc- need to be dealt with- and a fresh look taken at all LA services- and how they relate to needs.

I would fully support a room tax though- but not specifically as a mechanism to get the elderly to vacate family homes..........

hytrogen

The worst thing we can do is migrate elderly to boxedin apartment blocks with sterile corridors where nobody cares to call in or pass a glance as you open your door.
A friends grandmother downsized into a very nice penthouse apartment in south Dublin overlooking the wicklow mountains on one side and Dublin bay on the other. Her husband died shortly after they moved. On numberous occasions she, being Frail and with severe mobility issues was discovered lying on the floor unable to get herself back up safely by family members who lived an hours drive or two away. Had she been in a purposely build sheltered housing estate accommodation she wouldn't have later died. Of course they were incentivised to downsize and "release the cash values" from their "too large to manage" family home.

RainyDay

hytrogen wrote: »

The worst thing we can do is migrate elderly to boxedin apartment blocks with sterile corridors where nobody cares to call in or pass a glance as you open your door.
A friends grandmother downsized into a very nice penthouse apartment in south Dublin overlooking the wicklow mountains on one side and Dublin bay on the other. Her husband died shortly after they moved. On numberous occasions she, being Frail and with severe mobility issues was discovered lying on the floor unable to get herself back up safely by family members who lived an hours drive or two away. Had she been in a purposely build sheltered housing estate accommodation she wouldn't have later died. Of course they were incentivised to downsize and "release the cash values" from their "too large to manage" family home.

That's a cheap shot. It really doesn't matter whether she falls in an apartment or a house, it's still going to be a problem. And there are lots of options out there to deal with this, including alarms and remote monitoring if necessary.

I called to a decent 4-bed semi-d in a nice area of south Dublin one evening last year, and the gent who answered had a dressing gown and wooly hat on over his day clothes. House price was somewhere about 600k, but he couldn't afford to put on the heating and live in reasonable comfort. The following day, I dropped one of my kid's friends back to her apartment, where the family of four are squeezed into a 2-bed apartment, with kids bouncing off the walls in the lobbies and 'no ball playing' signs on the green outside. There has to be a better way to balance these two out.

I don't think tax incentives are a great idea, because they have generally ended up screwing things up. There is an existing substantial tax incentive of no CGT when selling a family home. There might be some practical things that can be done, like perhaps help to declutter to SVP or whatever.

Apartment living can be very suitable for many older people. Our existing apartment stock isn't particularly well designed. We need more lifts, more storage space, and even things like guest apartments available for short-term rent when family come home from abroad as would be available in other countries.

hytrogen

The_Conductor wrote: »

I would suggest that there should be some sort of a room tax- across the board- nothing whatsoever to do with the age of the occupants. Its nuts that there is no cognisance of the size of a property taken into account when determining its property tax. In a similar manner- I would also suggest that those who live in apartments or other leasehold type situations- should be allowed offset their management charges- at very least at their marginal rate of tax- against their property tax.

Its not a stick specifically targetted at the elderly- it should be equally applicable across the board- and in addition- it might be viewed by some as an incentive to move into apartments or other leasehold type properties- as the annual tax would thus be considerably less.

One thing though- we'd need an economic rate of property tax charged- at present it is less than 1/4 what it should be (which is at least partially why some local authorities are in financial trouble (e.g. hedge cutting has ceased and the local library closed in Tubbercurry- for example- as there is nothing in the kitty to pay for them.)

I'd also suggest that the mafia gangsters currently controlling refuse collection etc- need to be dealt with- and a fresh look taken at all LA services- and how they relate to needs.

I would fully support a room tax though- but not specifically as a mechanism to get the elderly to vacate family homes..........

....What?????
I Sincerely hope you do understand the concept and purpose of a leasehold agreement as well as property maintence costs, why they are what they are and why they are necessary to maintain the structure of the property a community inhabits..
As for tubbercurry the maintenance company should have budgeted appropriately and foreseen future expenditure outlays ahead or else "incentivised" (as it's the theme of the thread) to get the residents up off their Large derrieres and asked them for support and build a community environment where people actually gave a dam about where they lived instead of creating squalor, moaning about it and doing nothing.

The_Conductor

hytrogen wrote: »

The worst thing we can do is migrate elderly to boxedin apartment blocks with sterile corridors where nobody cares to call in or pass a glance as you open your door.
A friends grandmother downsized into a very nice penthouse apartment in south Dublin overlooking the wicklow mountains on one side and Dublin bay on the other. Her husband died shortly after they moved. On numberous occasions she, being Frail and with severe mobility issues was discovered lying on the floor unable to get herself back up safely by family members who lived an hours drive or two away. Had she been in a purposely build sheltered housing estate accommodation she wouldn't have later died. Of course they were incentivised to downsize and "release the cash values" from their "too large to manage" family home.

I've had to call the firebrigade to break down the door for a family member in a house- who I suspected might have fallen and be unable to get up- as I was over an hour away. These type events- are nothing whatsoever to do with the type of a dwelling- and indeed- in an apartment setting where the management company would normally have a list of keyholders who could be contacted 24-7- arguably those who are aged or infirm (someone who is young can be ill too!) might be safer. Personally- I've collapsed at home and not had anyone I could ring (massive internal bleeding- I collapsed from blood loss and went into shock). I can't use what happened to suggest- I need a house rather than an apartment- its not relevant.

As the previous poster said- it is a cheap shot- and an attempt at scoring points.

The_Conductor

hytrogen wrote: »

....What?????
I Sincerely hope you do understand the concept and purpose of a leasehold agreement as well as property maintence costs, why they are what they are and why they are necessary to maintain the structure of the property a community inhabits..
As for tubbercurry the maintenance company should have budgeted appropriately and foreseen future expenditure outlays ahead or else "incentivised" (as it's the theme of the thread) to get the residents up off their Large derrieres and asked them for support and build a community environment where people actually gave a dam about where they lived instead of creating squalor, moaning about it and doing nothing.

I most certainly understand the concept and purpose of a leasehold, property maintenance and Managmeent Companies- I've chaired 2 companies for a number of years. The purpose of a leasehold arrangement for an apartment (or other property type) is not just an arrangement- its been widely used as a mechanism for local authorities to get communities to take charge of services that traditionally a council or local authority would be responsible for. I've been out late at night on two occasions lately- unblocking sewage pipes- in one estate that South Dublin Co. Co. say they never intend to take in charge.........

In another instance Kildare Co. Co. are refusing to allow a gated community remove their gates and open up the estate- as the council themselves claim to have a private right-of-way (to a nearby water course) through the development- which they say will be diminished if the management company open the estate. As a closed estate- they pay 14k in insurance for third party and public liability insurance- which they'd not have to do- were the estate an open estate.

Management Charges- cover a variety of expenses- not all of which are directly related to the maintenance of the structure of dwellings..........

As for Tubbercurry- this is part of Sligo Co. Co.- and I used it as an example of a local authority facing funding issues- because of low property tax collections (including in the case of Sligo- the largest amount of deferred property tax payments by locals, in the country......... It also has some of the largest residential average property sizes- which if enumerated- would result in enhanced levels of property tax to fund services in the area?

hytrogen

RainyDay wrote: »

That's a cheap shot. It really doesn't matter whether she falls in an apartment or a house, it's still going to be a problem. And there are lots of options out there to deal with this, including alarms and remote monitoring if necessary.

I called to a decent 4-bed semi-d in a nice area of south Dublin one evening last year, and the gent who answered had a dressing gown and wooly hat on over his day clothes. House price was somewhere about 600k, but he couldn't afford to put on the heating and live in reasonable comfort. The following day, I dropped one of my kid's friends back to her apartment, where the family of four are squeezed into a 2-bed apartment, with kids bouncing off the walls in the lobbies and 'no ball playing' signs on the green outside. There has to be a better way to balance these two out.

I don't think tax incentives are a great idea, because they have generally ended up screwing things up. There is an existing substantial tax incentive of no CGT when selling a family home. There might be some practical things that can be done, like perhaps help to declutter to SVP or whatever.

Apartment living can be very suitable for many older people. Our existing apartment stock isn't particularly well designed. We need more lifts, more storage space, and even things like guest apartments available for short-term rent when family come home from abroad as would be available in other countries.

Loads the Tesco value bullets..
She had the pendulum and eircom didn't react appropriately but that's for another thread..
That gentleman probably should have invested in his home while the HRI grants were available last year.
And yes there is an easier balance, don't have kids you can't afford.. honestly though I do agree that there has to be a finer balance found with the current dilemmas we're facing.
I'm not condoning the property tax scheme, especially when it first came out, I nearly sold my home that day when seeing the bill I faced, but equally an empty room tax is as good as a congestion charge; coffer filler! The taxes we pay now are meant to pay towards services we'll use when we get older for free. Unfortuanely the last shower in power drank that at the dail bar but we won't go there either..

Victor

Increase LPT and offer a credit per resident.

newacc2015

A PPR is CGT free. That is obviously a massive sweetener. There is very few assets you can sell that you pay zero tax on

I cant understand why so many OAPs still live in their homes. They are often large and inefficient. They would have a higher quality of life in a smaller house or apartment with decent insulation. I know so many OAPs in massive houses that they cant afford to heat or just cant heat as the house has no insulation.

There is obviously the mental health benefits. So many OAPs are isolated living in big houses in the suburbs of our cities. They rarely have social interaction. If they were living in purpose built OAP housing with events and places like gyms/community halls. They wouldnt be as isolated.

What good is a massive house you cant heat and living isolated suffering from preventive mental health issues?

newacc2015

A PPR is CGT free. That is obviously a massive sweetener. There is very few assets you can sell that you pay zero tax on

I cant understand why so many OAPs still live in their homes. They are often large and inefficient. They would have a higher quality of life in a smaller house or apartment with decent insulation. I know so many OAPs in massive houses that they cant afford to heat or just cant heat as the house has no insulation.

There is obviously the mental health benefits. So many OAPs are isolated living in big houses in the suburbs of our cities. They rarely have social interaction. If they were living in purpose built OAP housing with events and places like gyms/community halls. They wouldnt be as isolated.

What good is a massive house you cant heat and living isolated suffering from preventive mental health issues?

The Student

Knowing and feeling safe in your surroundings is very important to the older generation. Alot of the older generation dont like or cant handle change.

Also alot of these people worked hard for this independence. Specially designed senior citizen communities are great in principle but it would take time for people to accept them.