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Phasing in rent increase

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    #122
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    Finbarr Murphy wrote: »
    I don't see how it's viable to be a landlord in Ireland unless there's a small (or no) mortgage on the property.

    If you have no mortgage on a property- you're looking at a tax bill on the rental income of up to 56%............

    Seriously- the main beneficiary of soaring rent in Ireland- is the Revenue Commissioners- not the landlords, and most certainly not the tenants.

    Unless you have some manner of sheltering your rental income (such as the REITs- who somehow managed to set themselves up to avail of 'charity' exemptions (how, I have no idea))- you're screwed.

    The incentive to be a landlord in Ireland- is non-existent- the tax is simply too onerous.


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    #123
    [Deleted User]
    Posts: 24,714 ✭ [Deleted User]


    Weepsie wrote: »
    I'd argue it the other way. Its not the role of a tenant to cover the cost of a mortgage. Unless it's a buy to let, a cash buyer, multiple investors or a large portfolio then expecting the cost of the mortgage to be covered by the rental income is absurd.

    If that was the case everyone would be able to just avail of a mortgage and buy.

    Too many amateurs who think I'll take out a loan, have someone else pay it all off, and then sell it for 100% profit.

    Its a long-term investment, and if people are not willing to take the risk and have some losses to have the long term goal of a property bought and paid for 30-50℅ of its value then they shouldn't be getting into the property game at all.

    This is a massive issue

    You have a very wrong idea of how buying to let works. Of course the idea is to not only cover the mortgage but clear profit monthly if at all possible. You would be mad to get into rental business if you weren't aiming to cover the mortgage and all costs at the very least. I've no clue what gave you the impression that a rental business should operate as you described and of course rent should cost more than the equivalent mortgage, why shouldn't it a renter is paying for a service as they are unwilling or unable to buy and of course this is going to cost more than buying. Renting is the equivalent of buying in a supermarket while buying is like going to the wholesaler.


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    #124
    appfry
    Registered Users Posts: 161 ✭✭appfry


    Just charge the market rate.
    Thats a fair price to boith landlord and tenant.
    Whats not fair to everyone is the amount of money that revenue take out of that.


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    #125
    ZeroThreat
    Registered Users Posts: 2,191 ✭✭✭ZeroThreat


    The_Conductor wrote: »
    If you have no mortgage on a property- you're looking at a tax bill on the rental income of up to 56%............

    Seriously- the main beneficiary of soaring rent in Ireland- is the Revenue Commissioners- not the landlords, and most certainly not the tenants.

    Unless you have some manner of sheltering your rental income (such as the REITs- who somehow managed to set themselves up to avail of 'charity' exemptions (how, I have no idea))- you're screwed.

    The incentive to be a landlord in Ireland- is non-existent- the tax is simply too onerous.

    The incentive to make a decent amount of money by almost any means in Ireland seems to be non-existent due to onerous taxation.

    The only way to become affluent here seems to be by becoming an insider in political circles or some crony-capitalist cartel.
    The system seems almost designed to prevent people from becoming wealthy.


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    #126
    The_Conductor
    Moderators, Society & Culture Moderators Posts: 32,285 Mod ✭✭✭✭The_Conductor


    ZeroThreat wrote: »
    The incentive to make a decent amount of money by almost any means in Ireland seems to be non-existent due to onerous taxation.

    The only way to become affluent here seems to be by becoming an insider in political circles or some crony-capitalist cartel.
    The system seems almost designed to prevent people from becoming wealthy.

    I sort of agree with you- but for different reasons than you might think.
    It would be all well and good paying your 55-56% on rental income- if there was a perception that you were actually getting something for it- when the opposite is the case- the RTB is toothless- yet you have to go through them- and then you have to go to court- possibly multiple times- and you have a small cohort of tenants out there who know how to play the system, and play the system they do- like a fine fiddle.

    Its always a small cohort of tenants and landlords- who give the majority of tenants and landlords a bad name- however, when the system is as patently flawed as the current system is- of course its going to get played.........

    On top of the tax system being brutal- you also have the perverse incentive that is mortgage interest- and how its the primary manner a landlord has to shelter rental income. This is why so many landlords in the boom time were on interest only mortgages- because there is a disincentive to repay the mortgage- i.e. you loose the tax deduction.

    This means- if you have a prudent landlord, who takes care of their property and their tenants, and pays down their mortgage- they are penalised by Revenue for doing so...........

    As the American Dramaticist Clare Boothe Luce would have put it- 'No good deed goes unpunished'..........

    Why the hell is our tax system set up in a manner that actively disincentivises landlords from ever repaying their mortgages?


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    #127
    appfry
    Registered Users Posts: 161 ✭✭appfry


    The_Conductor wrote: »
    I sort of agree with you- but for different reasons than you might think.
    It would be all well and good paying your 55-56% on rental income- if there was a perception that you were actually getting something for it- when the opposite is the case- the RTB is toothless- yet you have to go through them- and then you have to go to court- possibly multiple times- and you have a small cohort of tenants out there who know how to play the system, and play the system they do- like a fine fiddle.

    Its always a small cohort of tenants and landlords- who give the majority of tenants and landlords a bad name- however, when the system is as patently flawed as the current system is- of course its going to get played.........

    On top of the tax system being brutal- you also have the perverse incentive that is mortgage interest- and how its the primary manner a landlord has to shelter rental income. This is why so many landlords in the boom time were on interest only mortgages- because there is a disincentive to repay the mortgage- i.e. you loose the tax deduction.

    This means- if you have a prudent landlord, who takes care of their property and their tenants, and pays down their mortgage- they are penalised by Revenue for doing so...........

    As the American Dramaticist Clare Boothe Luce would have put it- 'No good deed goes unpunished'..........

    Why the hell is our tax system set up in a manner that actively disincentivises landlords from ever repaying their mortgages?


    Encourages higher rents to pay the interest.
    Revenue get a nice big share of that interest as its not all allowable.
    Everything is set up so that the banks and revenue profit from the landlord, which is then passed on to the tenant.

    Its revenue who are the demons here, not the landlords. But the media dont seem to realise that. They prefer to demonise the landlord.


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    #128
    murphaph
    Registered Users Posts: 19,021 ✭✭✭✭murphaph


    Revenue just enforce the finance acts of the Dail. They're written by our elected representatives, fine men and women that they are.


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    #129
    Sad Professor
    Moderators, Category Moderators, Arts Moderators, Entertainment Moderators, Technology & Internet Moderators Posts: 22,677 CMod ✭✭✭✭Sad Professor


    Seems like the government is a good position to reduce the tax burden on landlords in exchange for indefinite leases and regulated rents. Design it so that the longer the tenancy lasts the more the tax is reduced so that landlords will seek out long term tenants and stop this silly anti-family, anti-children, anti-pets, single professionals only nonsense. Accelerate evictions for non-paying tenants and increase fines for landlords who don't play ball. It's win-win for everyone, except maybe short-term investors but we could do with less of them anyway.


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    #130
    [Deleted User]
    Posts: 17,728 ✭✭✭✭ [Deleted User]


    spacetweek wrote: »
    ........... The market rate is just whatever other landlords are charging.

    The market rate is just whatever other tenants are paying


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    #131
    spacetweek
    Moderators, Science, Health & Environment Moderators Posts: 5,054 Mod ✭✭✭✭spacetweek


    Sad Professor wrote: »
    Seems like the government is a good position to reduce the tax burden on landlords in exchange for indefinite leases and regulated rents. Design it so that the longer the tenancy lasts the more the tax is reduced so that landlords will seek out long term tenants and stop this silly anti-family, anti-children, anti-pets, single professionals only nonsense. Accelerate evictions for non-paying tenants and increase fines for landlords who don't play ball. It's win-win for everyone, except maybe short-term investors but we could do with less of them anyway.

    This all sounds eminently sensible.


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