How high will the rental rates go ?

pilly

Graham wrote: »

Not really. Property tax goes up, some other tax comes down.

Net effect to the overall tax intake could be zero while incentivising people to rightsize their choice of accommodation.

A lot of people don't need sticks to rightsize their accommodation though, they want to and simply can't. How would a property tax help people in that situation? I'm failing to see the link.

Graham

beauf wrote: »

They'll just tax you more, with no incentive.

Even if that were the case (hard to tell with this first generation crystal ball), significantly increased property tax would certainly cause some people to reconsider their property choices. Particularly if the tax were influenced by property value/size/occupancy.

Graham

pilly wrote: »

A lot of people don't need sticks to rightsize their accommodation though, they want to and simply can't. How would a property tax help people in that situation? I'm failing to see the link.

It depends what's preventing them from doing it now.

For a start, there's the oft-mentioned unoccupied properties that could find themselves being brought back to the market fairly sharpish.

pilly

Graham wrote: »

It depends what's preventing them from doing it now.

For a start, there's the oft-mentioned unoccupied properties that could find themselves being brought back to the market fairly sharpish.

That's my point, it depends on various different factors and a blanket tax won't help. For example, in my case and 2 others mentioned above to sell what we have and buy something more suitable is not affordable. Doesn't matter if you increased my property tax tenfold (if you did then I couldn't afford it so wouldn't pay).

I'm not sure what the story is with the unoccupied houses to honest, I've never gotten that one. Either sell, rent out or live in. Don't understand why people would be leaving them empty.

Graham

pilly wrote: »

That's my point, it depends on various different factors and a blanket tax won't help. For example, in my case and 2 others mentioned above to sell what we have and buy something more suitable is not affordable. Doesn't matter if you increased my property tax tenfold (if you did then I couldn't afford it so wouldn't pay).

I don't think it's realistic to base policy on the outlying cases you're referring to.

That's not to say I don't think such outliers don't warrant further consideration and additional assistance where it's appropriate but that's an entirely different conversation.

Graham

pilly wrote: »

Don't understand why people would be leaving them empty.

Nursing Home Support Scheme (fair deal)
Lack of a short-term rental model.
Financial and legal burdens places on landlords.
No significant property taxation incentivising use.

pilly

Graham wrote: »

Nursing Home Support Scheme (fair deal)
Lack of a short-term rental model.
Financial and legal burdens places on landlords.
No significant property taxation incentivising use.

Good points.

I didn't realise for the fair deal scheme you had to leave your house empty.

beauf

Its nice vision of the future. Someone works all their life to pay off a property to live in or leave to their kids, then are forced out of it by high property tax then kicked in the head by the CGT on selling. Only to have to pay over the odds for an overvalued downsized property. They must have been taxed about 4 or 5 times on the same money.

I suspect those calling for this now, will be singing a very different tune, in 30yrs time.

beauf

pilly wrote: »

...I'm not sure what the story is with the unoccupied houses to honest, I've never gotten that one. Either sell, rent out or live in. Don't understand why people would be leaving them empty.

Its too much hassle.

The property will appreciate over the long term. Probably.

Graham

beauf wrote: »

Its nice vision of the future. Someone works all their life to pay off a property to live in or leave to their kids, then are forced out of it by high property tax then kicked in the head by the CGT on selling. Only to have to pay over the odds for an overvalued downsized property. They must have been taxed about 4 or 5 times on the same money.

I suspect those calling for this now, will be singing a very different tune, in 30yrs time.

Yup, that's the standard chorus that's trotted out every time the suggestion is floated.

"We've worked hard all our lives so we deserve a larger house than necessary, feck the next generations trying to buy".

Realistically, many countries already operate similar property taxation policies and their world hasn't ended. People make their financial plans accordingly.

beauf

Graham wrote: »

I don't think it's realistic to base policy on the outlying cases you're referring to.

That's not to say I don't think such outliers don't warrant further consideration and additional assistance where it's appropriate but that's an entirely different conversation.

If there's not a lot of these cases, then why bother.

Graham

pilly wrote: »

Good points.

I didn't realise for the fair deal scheme you had to leave your house empty.

You don't but take a look what happens if you sell it.

Graham

beauf wrote: »

If there's not a lot of these cases, then why bother.

because it's appropriate to consider those that both benefit or lose from such a policy.

It may be that such outliers are so few and far between and the loss so limited that no action is necessary. Alternatively it may be discovered that the hardship it would cause warrants other interventions.

beauf

Graham wrote: »

Yup, that's the standard chorus that's trotted out every time the suggestion is floated.

"We've worked hard all our lives so we deserve a larger house than necessary, feck the next generations trying to buy".

Realistically, many countries already operate similar property taxation policies and their world hasn't ended. People make their financial plans accordingly.

Its not the property tax that's the issue. So its not the solution.

It a bit like forcing people out of their cars, when there no public transport to move them to.

Graham

beauf wrote: »

It a bit like forcing people out of their cars, when there no public transport to move them to.

It's more like increasing tax on large/inefficient engines. That appears to have had the desired effect even in areas with no public transport.

beauf

Graham wrote: »

because it's appropriate to consider those that both benefit or lose from such a policy.

It may be that such outliers are so few and far between and the loss so limited that no action is necessary. Alternatively it may be discovered that the hardship it would cause warrants other interventions.

The problem which is really the issue here is the lack of first time homes, and rental properties. None of which want a "larger house than necessary" with high running costs, unsuitable for renting.

Its a bit like the constant focus on LL and Rent caps. People being stuck unable to downsize is a symptom of the dysfunctional housing market, not a root cause and thus not solution to the problem.

All this is doing is distracting from the main cause of the problem. Lack of supply.

beauf

Graham wrote: »

It's more like increasing tax on large/inefficient engines. That appears to have had the desired effect even in areas with no public transport.

Actually we don't tax inefficient engines. We tax engines with lower CO2. Which is why we now have a diesel pollution problem, and 3L hyrbid SUV's.

BrokenArrows

handlemaster wrote: »

Its hard to see rents going up much further. What will the breaking point be ? Dublin average 3 bed semis are minimum 1400 now.

It will go on as long as demand outstrips supply.

Eventually new developments will complete and it will start to even out.

Graham

beauf wrote: »

All this is doing is distracting from the main cause of the problem. Lack of supply.

Lack of supply is certainly the main issue hence the suggestion appropriate property tax would return some vacant properties to the market.

Much quicker to return current (empty) housing stock to the market than wait for the development cycle to catch up. It's not an either/or suggestion, it's both.

Graham

beauf wrote: »

Actually we don't tax inefficient engines. We tax engines with lower CO2. Which is why we now have a diesel pollution problem, and 3L hyrbid SUV's.

Maybe it would help if you thought of 2 people living in a 5 bed detached as the residential equivalent of driving a really inefficient massively CO2 generating engine.

In both cases, large running costs and high taxation incentivise rightsizing but I'm guessing you got that before we started with the motoring analogies.

KindOfIrish

Ray Palmer wrote: »

There is no easy solution
.

There is a solution. We have to build more apartments in cities. Dublin and Cork look like rural settlements and it's unsustainable. Ireland will loose many potential international business investments unless planning regulations change. Just 20 apartment blocks of 50 apartment each will bring 1000 rental properties to Dublin. It can be built in one year easily.

Panrich

One major stumbling block to indiscriminate extra development in Dublin might be the water supply situation. Whether the economics make sense or not, Dublin needs extra water supply and it will take up to 2024 for the Shannon water pipeline to come online.

beauf

Graham wrote: »

Maybe it would help if you thought of 2 people living in a 5 bed detached as the residential equivalent of driving a really inefficient massively CO2 generating engine.

In both cases, large running costs and high taxation incentivise rightsizing but I'm guessing you got that before we started with the motoring analogies.

The problem with you're thinking is that main cost is not the property tax. Its all the other issues, which property tax won't solve. In fact it just makes it unsuitable for everyone including the people you want it for.

Then theres this...

12:13PM
Deputy Cowen reminds us that just 22 of the 500 modular homes promised have been constructed…

http://www.thejournal.ie/liveblog-leaders-questions-2-3099636-Nov2016/

Graham

Graham wrote: »

Maybe it would help if you thought of 2 people living in a 5 bed detached as the residential equivalent of driving a really inefficient massively CO2 generating engine.

In both cases, large running costs and high taxation incentivise rightsizing but I'm guessing you got that before we started with the motoring analogies.

Most people don't want to leave their homes, they have lived there for years, brought up their kids there and would most likely want to leave the house to one or more of their kids. I think it would be a disgusting move to try tax people out of their properties and I don't believe it would work anyway. They have propably spent many years getting the house just as they want it so why would they want to leave it.

Also just because 2 people live in a 5 bed house doesn't mean the other rooms aren't required. The peoples children come to visit and need rooms (this is a very regular thing in some families with people home most weekends), grandchildren calling and staying etc etc. A house is a lot more than blocks and a roof to most people its memories and a place they love.

beauf

Panrich wrote: »

One major stumbling block to indiscriminate extra development in Dublin might be the water supply situation. Whether the economics make sense or not, Dublin needs extra water supply and it will take up to 2024 for the Shannon water pipeline to come online.

You'd think by now someone would have considered they whole country can't live in Dublin.

Graham

Stella Clever Strapless wrote: »

Most people don't want to leave their homes, they have lived there for years, brought up their kids there and would most likely want to leave the house to one or more of their kids. I think it would be a disgusting move to try tax people out of their properties and I don't believe it would work anyway. They have propably spent many years getting the house just as they want it so why would they want to leave it.

Also just because 2 people live in a 5 bed house doesn't mean the other rooms aren't required. The peoples children come to visit and need rooms (this is a very regular thing in some families with people home most weekends), grandchildren calling and staying etc etc. A house is a lot more than blocks and a roof to most people its memories and a place they love.

Yes, it's an emotive issue as your post demonstrates with the Granny waiting with the freshly baked cookies story.

My suggestion isn't to outlaw people occupying properties larger than they need. It's incentivising people to rightsize by making it financially beneficial to do so.

beauf

Graham wrote: »

...My suggestion isn't to outlaw people occupying properties larger than they need. It's incentivising people to rightsize by making it financially beneficial to do so.

Yes you've looked at one relatively minor tax without any context to the bigger issues.

Graham

beauf wrote: »

Yes you've looked at one relatively minor tax without any context to the bigger issues.

That is the issue, it's a relatively minor tax. There's currently no incentive to change behaviour or attitudes. As a result we have people occupying property much larger than they need or even worse in the current environment, properties lying empty.

I do agree with you in one aspect. Increased property taxation alone isn't a solution to the current housing crisis but it could/should be a part of a multifaceted approach to addressing it.

cerastes

Graham wrote: »

Yup, that's the standard chorus that's trotted out every time the suggestion is floated.

"We've worked hard all our lives so we deserve a larger house than necessary, feck the next generations trying to buy".

Realistically, many countries already operate similar property taxation policies and their world hasn't ended. People make their financial plans accordingly.

Its not about living in a house larger than necessary, people have spent years doing up their own place as they like, many dont want to be force relocated just because its deemed necessary. A next generations wanting to buy isnt the fault of a previous generation, especially when there arent alternatives, even affordable alternatives available.
If it was practical (re services) or affordable, then it would happen naturally.

But, just like successive Govts inaction on solving or god forbid even having the foresight to prevent a housing problem occur, no thought is given to simply transplanting what are viewed as economically less viable people out, but to what? away from communities that have grown over time naturally, where friends and services they know are.

Graham wrote: »

That is the issue, it's a relatively minor tax. There's currently no incentive to change behaviour or attitudes. As a result we have people occupying property much larger than they need or even worse in the current environment, properties lying empty.

I do agree with you in one aspect. Increased property taxation alone isn't a solution to the current housing crisis but it could/should be a part of a multifaceted approach to addressing it.

Because its mostly not practical, cost effective or realistic to downsize.

Graham

cerastes wrote: »

Because its mostly not practical, cost effective or realistic to downsize.

Really, lots of people manage to downsize without a problem.

The 'cost effective' part can be rebalanced by making it more expensive not to downsize.