Media: Why the Government refuses to intervene in the housing crisis

Carlos Orange

rawn wrote: »

It IS reassessed yearly. My dad lives in a council house and has to provide payslips for himself and everyone in the house once a year and the rent is adjusted accordingly.

He means eligibility for highly subsidised housing not the exact rent paid.

Mr Chuckles

The_Conductor wrote: »

Note- this article is behind the Irish Times Paywall.

Link here: https://www.irishtimes.com/business/construction/why-the-government-refuses-to-intervene-in-the-housing-crisis-1.3197148

Its also in the print version of today's Irish Times- under 'Commercial Property'.

Its a discussion of why the government are insistent on pinning the property crisis on the private sector- and will not be building large numbers of local authority and social housing estates nationally.

The manner in which the article is hidden in the construction pages- rather than given better billing- perhaps on the business pages- speaks volumes........

The big issue in housing in Ireland- is lack of supply of appropriate units- where people want to live.
Simply pointing at the fact that the government have a fund of 6 billion to tackle the sector- patently is insufficient- actions are needed- supply has to be freed up- particularly in the main urban areas.

We can discuss how to deal with these issues ad nauseum here in this forum- even people of completely opposing viewpoints- will agree that the current systems in place are incapable of unlocking the supply side issues.

Using a scapegoat(s) to blame the ills of the sector- to have someone to point fingers at- is ineffective point scoring. We need to relax planning rules, height restrictions, density guidelines etc- and get building- where people want to live.

Burdening Citizens with a lifetime of debt, to have a roof over their head, is government policy. Housing policy revolves around encouraging people to take out large loans, and then taking a percentage of that as taxes to fund day to day expenditure. This is morally reprehensible. Once you go down this road, it is hard to change, without impacting existing home owners, some who are in negative equity and cannot move. The thing is, it wasn't always like this. There was a time, when one earner could pay a mortgage, when Social Housing could be provided to keep communities together, and when employees had a fair chance to repay a mortgage. The trend now, is to lower wages, and temporary and insecure work. That's why you have a housing crisis.

Peter Flynt

Mr Chuckles wrote: »

Burdening Citizens with a lifetime of debt, to have a roof over their head, is government policy. Housing policy revolves around encouraging people to take out large loans, and then taking a percentage of that as taxes to fund day to day expenditure. This is morally reprehensible. Once you go down this road, it is hard to change, without impacting existing home owners, some who are in negative equity and cannot move. The thing is, it wasn't always like this. There was a time, when one earner could pay a mortgage, when Social Housing could be provided to keep communities together, and when employees had a fair chance to repay a mortgage. The trend now, is to lower wages, and temporary and insecure work. That's why you have a housing crisis.

Agree with all this.

On a much more simplistic and fundamental level all resources from this state have been provided and continue to be provided to financial institutions and the very rich in society through various schemes to avoid paying tax and to ensure that their hobbies (like horse racing) are heavily subsidised. All of this as the government puts up a fight against the EC for stating that Ireland is owed 13,000 million in unpaid taxes from Apple. Ireland is a tax haven run for the very rich.

As this occurs the emphasis is placed on austerity to pay for this luxury. Housing shortages and homelessness are a very obvious visible sign of what has occurred but there are others we have always lived with - A desperate health service who no one is interested in fixing (which forces people to take out health insurance) and a vastly underfunded "free" education system (where young teachers are not paid properly) are just two. Everything is done on the cheap because those who can pay won't.

To invest in a comprehensive housing plan involves a long term plan to ensure citizens are housed in areas with suitable facilities so as to prevent social deprivation. Governments in IRL have long since rid themselves of this "nuisance" although it doesn't stop them requiring property tax from people who are paying exhorbitant management fees. Such a housing plan requires money . . . and that is not going to be provided for the social and common good because places for people to live are just, shall we say, not "entreprenurial" enough for modern Paddyland.

So those who can't afford housing can stay at their parents, continue to pay crazy rent to the landlord class or go homeless.

Carlos Orange

Mr Chuckles wrote: »

There was a time, when one earner could pay a mortgage

Short of banning couples both working nothing is going to roll history back. Time to move on.

bleary

Mr Chuckles wrote: »

The thing is, it wasn't always like this. There was a time, when one earner could pay a mortgage, when Social Housing could be provided to keep communities together, and when employees had a fair chance to repay a mortgage. The trend now, is to lower wages, and temporary and insecure work. That's why you have a housing crisis.

Yup up to the 80s as long as you had a job, which until the 70s you couldn't have as a married woman,at the same time you also had mass emigration. In our family all of my parents siblings emigrated in families of 6 or 7 in the 50s and 60s. Most came back some didn't, Out of their kids, I was one of the first to get a job in Ireland, everyone grew up assuming they would be off to London or New York as soon as they finished education.that kind of keeps a cap on rents and house prices when entire generations leave the country.
As happened from 2008 to 2013

Icepick

xpletiv wrote: »

Sure half the TD's are landlords. They're hiking their income up with rent. Why would they change it?! It benefits them directly. Not the country. They dont give a ****e about the country.

Source?

jamesthepeach

Icepick wrote: »

Source?

That one is trotted out all the time.

It's actually higher.
If you have a pension you are a landlord. So most people are.

Peter Flynt

jamesthepeach wrote: »

That one is trotted out all the time.

It's actually higher.
If you have a pension you are a landlord. So most people are.

Complete nonsense.

You're a landlord if you own property and rent it out to someone else.

Not because some pension fund which you draw your pension from owns property.

jamesthepeach

Peter Flynt wrote: »

Complete nonsense.

You're a landlord if you own property and rent it out to someone else.

Not because some pension fund which you draw your pension from owns property.

So you don't think pension funds have a large interest in rental property. Ok then.

wordofwarning

Peter Flynt wrote: »

On a much more simplistic and fundamental level all resources from this state have been provided and continue to be provided to financial institutions and the very rich in society through various schemes to avoid paying tax and to ensure that their hobbies (like horse racing) are heavily subsidised. All of this as the government puts up a fight against the EC for stating that Ireland is owed 13,000 million in unpaid taxes from Apple. Ireland is a tax haven run for the very rich.

We are a tax friendly nation and everyone profits from it. A majority of corporation tax is paid for by a handful of corporations(most are you guessed it, foreign MNCs). MNCs now employ 1 in 5 directly or indirectly. MNCs benefit everyone in this society. Like everything, they benefit more so than others

Peter Flynt wrote: »

As this occurs the emphasis is placed on austerity to pay for this luxury. Housing shortages and homelessness are a very obvious visible sign of what has occurred but there are others we have always lived with - A desperate health service who no one is interested in fixing (which forces people to take out health insurance) and a vastly underfunded "free" education system (where young teachers are not paid properly) are just two. Everything is done on the cheap because those who can pay won't.

The top 1% in Ireland pay 21% of all income taxes. The top 10% of income earners in this state pay around 70-80% of all income taxes. Ireland has the most progressive income tax system in the OECD. So I am curious who are the people not paying their fair share?

Peter Flynt wrote: »

To invest in a comprehensive housing plan involves a long term plan to ensure citizens are housed in areas with suitable facilities so as to prevent social deprivation. Governments in IRL have long since rid themselves of this "nuisance" although it doesn't stop them requiring property tax from people who are paying exhorbitant management fees.

LPT is 0.17% of the property value and based on a property value that is a fraction of what the property is worth in 2017. Our LPT is likely without a doubt the lowest in the OECD. Why should someone who pays management charges be exempt from LPT?

The state refuses to intervene in the property market as it does not have the funds. I know people like to think that there is a ton of untaxed money sitting on the table ie whether it be MNCs or the top 1%. The matter is the state has taxed MNCs and the wealthy as much as it likely can. If we want to build housing, the bottom 50% in society who are to benefit from this housing will likely have to pay more/some taxes. But that won't happen, as it undesirable

Peter Flynt

jamesthepeach wrote: »

So you don't think pension funds have a large interest in rental property. Ok then.

I do, but it's complete nonsense to state that someone who may not own property (or who has never owned property) and who happens to claiming a pension allied to one of those pension funds is now suddenly a landlord.

If that's the case everyone in the country is a banker (due to state owned banks), or a landlord (via NAMA).

Peter Flynt

wordofwarning wrote: »

We are a tax friendly nation and everyone profits from it. A majority of corporation tax is paid for by a handful of corporations(most are you guessed it, foreign MNCs). MNCs now employ 1 in 5 directly or indirectly. MNCs benefit everyone in this society. Like everything, they benefit more so than others

Is that what they call tax havens now?
Tax friendly nations.

A corporation tax rate of 12.5% is a subsidy to foreign MNCs and anyone who works in one those is therefore effectively getting their job subsidised also.

CT in Germany 33%, France 33%, Denmark 22%, Finland 20%, Paddytaxhaven 12.5%

For us we think that the 12.5% is the golden goose laying the egg and we're terrified as a nation of altering that rate. . . MNCs are only too aware of that.

The top 1% in Ireland pay 21% of all income taxes. The top 10% of income earners in this state pay around 70-80% of all income taxes. Ireland has the most progressive income tax system in the OECD. So I am curious who are the people not paying their fair share?

One of the great myths. In the past the Irish all said ten Hail Marys before bedtime. Now I think some of us tell ourselves over and over again that "we're the most progressive tax system in the world" instead. Like the saying "the bigger the lie, the more people that will believe it"

Income tax is just 41% of the tax system.
Ireland has one of the highest VAT rates in the world at 23% with the bottom 10% paying nearly 30 per cent of their incomes in indirect taxes with the top 10 per cent paying just 6 per cent.

The state refuses to intervene in the property market as it does not have the funds.

It does have the funds. Politics is about choices and we choose not to build houses. It really is as simple as that.

When we were a much poorer country in the 1960s we found the funds.

The_Conductor

Peter Flynt wrote: »

Is that what they call tax havens now?
Tax friendly nations.

A corporation tax rate of 12.5% is a subsidy to foreign MNCs and anyone who works in one those is therefore effectively getting their job subsidised also.

CT in Germany 33%, France 33%, Denmark 22%, Finland 20%, Paddytaxhaven 12.5%

For us we think that the 12.5% is the golden goose laying the egg and we're terrified as a nation of altering that rate. . . MNCs are only too aware of that.

Its moving way beyond the remit of this forum- however, I feel I need to point out that despite Ireland having a corporation tax rate of 12.5%- the effective rate of tax paid in Germany, France, Denmark and definitely Finland- is actually lower than that paid in Ireland. All of the countries you've named- have quite remarkable allowances and methods for companies to reduce their taxable income and net tax due to the respective exchequers. The French- in particular- who are very fast to point at the Irish 12.5% rate- ironically pay the lowest effective rate of corporation tax in Europe.

Effective rate of tax- is very different from the headline tax rate- and in an Irish context- the MNCs pay an awful lot closer to the headline 12.5% rate of corporation tax- than do MNCs in any of the other countries you've named.

Its not often mentioned- but by god, its highly valid- and deserves to be brought to the fore. Its a pity the government don't harp on about effective taxation rates more- however, there is a damn good reason they don't- some Einstein would apply it to personal taxation rates- and a riot would ensue..........

Sleeper12

....... wrote:

This post has been deleted.

I can't speak for the rest of the country but in Dublin people paid for their council house. Houses built in the 50's the tenants paid rent till the 80's or 90s. That's 30 or 40 years. Then they got the option to buy the house at a reduced rate because they had already paid rent for 30 odd years.
No one got a free house.
The mistake that the council made was not continuing to build these homes. They were self financing & they actually made a profit on them over the years

The_Conductor

Guys- remember the mantra- if you disagree with another poster- refute their post- without attacking the poster.
It is *not* acceptable behaviour to demand to know someone's tax details- and then to use their remarkable candour- as some sort of a baton to hit them over the head with. Cop on guys. Its not hard to remain civil towards one another- and to be brutally honest- taking the thread in this direction is unacceptable on so many different grounds.

Cop on.

Peter Flynt

The_Conductor wrote: »

Its moving way beyond the remit of this forum- however, I feel I need to point out that despite Ireland having a corporation tax rate of 12.5%- the effective rate of tax paid in Germany, France, Denmark and definitely Finland- is actually lower than that paid in Ireland. All of the countries you've named- have quite remarkable allowances and methods for companies to reduce their taxable income and net tax due to the respective exchequers. The French- in particular- who are very fast to point at the Irish 12.5% rate- ironically pay the lowest effective rate of corporation tax in Europe.

Effective rate of tax- is very different from the headline tax rate- and in an Irish context- the MNCs pay an awful lot closer to the headline 12.5% rate of corporation tax- than do MNCs in any of the other countries you've named.

Its not often mentioned- but by god, its highly valid- and deserves to be brought to the fore. Its a pity the government don't harp on about effective taxation rates more- however, there is a damn good reason they don't- some Einstein would apply it to personal taxation rates- and a riot would ensue..........

Since you raised the issue you won't mind if I respond.

No one on here is going to claim to be an expert with the intricacies of any taxation system. Suffice to say that the effective tx rate that you refer to, which are obviously further incentives to reduce the CT rate, also apply in Ireland also.

Here is a link from 2013 where Apple announced that they pay 2% tax on their subsidiaries in Ireland.

https://www.rte.ie/news/business/2013/0521/451564-apple-tax-arrangements/

Peter Flynt

Peter Flynt wrote: »

Since you raised the issue you won't mind if I respond.

No one on here is going to claim to be an expert with the intricacies of any taxation system. Suffice to say that the effective tx rate that you refer to, which are obviously further incentives to reduce the CT rate, also apply in Ireland also.

Here is a link from 2013 where Apple announced that they pay 2% tax on their subsidiaries in Ireland.

https://www.rte.ie/news/business/2013/0521/451564-apple-tax-arrangements/

They are a massive source of employment of course we should be giving them tax breaks.

The_Conductor

Aarav Gorgeous Blob wrote: »

They are a massive source of employment of course we should be giving them tax breaks.

Tax breaks- fine- providing they are equally applicable to all companies.
Once any particular tax break is associated with one company- or close knit sector- but not others- it becomes illegal state aid.

With respect of the 2% pledge Apple made- its a damn sight better than the net amount they previously paid- however, it is making a mockery of our 12.5% corporation tax rate- and indeed, is highlighting the manner in which it somehow doesn't apply to them.

I think everyone should pay their fair share of tax. If Apple are routing sales through Ireland- to avail of our 12.5% corporation tax rate- then pay the bloody 12.5%. If they want to reduce this- by claiming the costs of development work etc here- then- conduct the development work etc here.

We cannot continue this charade of allowing multinational companies write of the costs of conducting development work or other costs (such as exploration costs) incurred elsewhere- on cashflow reported in Ireland. Want to know why Shell paid so little tax- its because the cost of any dud test wells they drilled over the duration- globally- were offset against Irish income from the likes of the Corrib gas field........... This is nuts- I can't even say its mortgaging the country for some end- because, quite simply, its not.

If we have a 12.5% corporation tax rate- companies should pay it- or the intellectual capital of the country should increase by a commensurate amount by research conducted here- if they are allowed offset research etc- against the 12.5%......... As for writing off costs incurred elsewhere- honestly- even the mafia didn't do this.