Will vacant homes tax have much impact on supply??

Falcon L

I have a large family home to sell in Raheny, Dublin. It could have been on the market at the start of May. The delay in getting probate through is keeping the house off the market. I'm not expecting this to be resolved before the end of the year. So, it sits empty.

I know it's only a small number of houses that would be in this position, but as Tesco says, every little helps.

antoinolachtnai

antoinolachtnai wrote: »

We do have a list of all the properties for LPT. Revenue also knows which ones are Principal Private Residences. It's not too difficult to figure out which ones are unoccupied.

It's very difficult, a house will not have to be a PPR to be exempt from a vacant house tax. A rented property won't be subject to it and nor will a house being lived in by the family member of the owner. Now how do you prove said family member actually lives there? How do you prove its not being used some of the time by the owner, say the vacant property is in the country and they live in the city who is to say they don't go out the country every weekend or maybe the wife and kids live in the country home while the man lives in the city for work in the house (this could be actually the case or on the other hand someone can just pretend its the case quite easily).

antoinolachtnai

Aranza Mammoth Knee wrote: »

It's very difficult, a house will not have to be a PPR to be exempt from a vacant house tax. A rented property won't be subject to it and nor will a house being lived in by the family member of the owner. Now how do you prove said family member actually lives there? How do you prove its not being used some of the time by the owner, say the vacant property is in the country and they live in the city who is to say they don't go out the country every weekend or maybe the wife and kids live in the country home while the man lives in the city for work in the house (this could be actually the case or on the other hand someone can just pretend its the case quite easily).

Those are really good questions.

There are a few ways to go about it.

One would be that if a person is that you tax the owners on their non-PPRs with a tax that can be offset against income tax. If someone is living in a house that they don't own, then they are paying rent on it or else getting the use of the house for free. If they are getting it for free, this would mean that this 'gift' would effectively be taxed. I know a lot of people would not like this, but it would be effective and fair.

Another way would be to require a declaration that the house was occupied and under what circumstances, if it is neither the owner's PPR nor registered with RTB as having a tenant. The information could be verified easily enough with site visits.

A measure like this doesn't have to be 100 percent effective. Even if 30 percent of the vacant housing in Dublin was brought into circulation it would make a big big difference.

seamus

antoinolachtnai wrote: »

A measure like this doesn't have to be 100 percent effective. Even if 30 percent of the vacant housing in Dublin was brought into circulation it would make a big big difference.

For many people, just the hassle alone of having to deal with it could be enough to make them put the property on the market. A lot of properties sit vacant through sheer inertia - i.e. it costs very little in real money to leave them sitting there.

pwurple

antoinolachtnai wrote: »

Those are really good questions.

There are a few ways to go about it.

One would be that if a person is that you tax the owners on their non-PPRs with a tax that can be offset against income tax. If someone is living in a house that they don't own, then they are paying rent on it or else getting the use of the house for free. If they are getting it for free, this would mean that this 'gift' would effectively be taxed. I know a lot of people would not like this, but it would be effective and fair.

Another way would be to require a declaration that the house was occupied and under what circumstances, if it is neither the owner's PPR nor registered with RTB as having a tenant. The information could be verified easily enough with site visits.

A measure like this doesn't have to be 100 percent effective. Even if 30 percent of the vacant housing in Dublin was brought into circulation it would make a big big difference.

I completely disagree. Waste of time. It will make zero difference. No one is going to bring a property online with this. Legislation, paperwork, departments set up, inspections, investigations. Every trick in the book will be employed to make sure the houses are exempt. All for a handful of semi-derelict tenements? Puh-lease. People will gladly pay the couple of hundred euro and leave the place vacant rather than suck up 10,000 euro worth of damage and hassle from a delinquent tenant.

Do you honestly think people WANT to leave a source of income vacant?

Sweet baby Jesus. Simply address the root cause of the problem, instead of trying to penalise further.






It is unprofitable / too risky to be a service provider. THIS is the problem. If people were allowed to make any f-ing money off it without being taxed to the eyeballs, there would be a 100,000 units available for rent by Christmas.

antoinolachtnai

pwurple wrote: »

It is unprofitable / too risky to be a service provider. THIS is the problem. If people were allowed to make any f-ing money off it without being taxed to the eyeballs, there would be a 100,000 units available for rent by Christmas.

If a person owns a property outright and can't make money in the current climate, with rents at record levels, they are never going to let out that property.

There is a lot of rubbish talked about being a landlord. You do need to know a lot and have a lot of skill to do it properly. But there is certainly money in it. If you have property, there has never been a better time to rent.

Being a landlord isn't for everyone. That's ok, there's no shame in it. But if you don't want to rent it out yourself, sell it or lease it long-term to someone who can.

For sure, there needs to be a 'carrot' there too.

antoinolachtnai

antoinolachtnai wrote: »

If a person owns a property outright and can't make money in the current climate, with rents at record levels, they are never going to let out that property.

There is a lot of rubbish talked about being a landlord. You do need to know a lot and have a lot of skill to do it properly. But there is certainly money in it. If you have property, there has never been a better time to rent.

Being a landlord isn't for everyone. That's ok, there's no shame in it. But if you don't want to rent it out yourself, sell it or lease it long-term to someone who can.

For sure, there needs to be a 'carrot' there too.

There is also the CGT tax relief, that could be worth a very large amount of money to someone who buys low and sells high and this is lost of the place is rented.

Allowing someone to rent out their property and avail of this relief might free up vacant properties.

However there is also the big elephant in the room which is the severe lack of rights LLs have over their own properties coupled with the crazy levels of taxation. Taxation erases much of the profits and LLs take a huge risk in renting the property due to the rights tenants have to more or less do as they please. Unless a number of these issues are addressed long term letting is not attractive to many.

antoinolachtnai

You won't get the CGT tax relief unless it is your PPR, i.e., you are living in it.

I just don't see how the tax situation is in any way unfair in relation to a property you already own outright. It is the same rate of tax everybody else pays on their income.

pwurple

antoinolachtnai wrote: »

If a person owns a property outright and can't make money in the current climate, with rents at record levels, they are never going to let out that property.

There is a lot of rubbish talked about being a landlord. You do need to know a lot and have a lot of skill to do it properly. But there is certainly money in it. If you have property, there has never been a better time to rent.

Being a landlord isn't for everyone. That's ok, there's no shame in it. But if you don't want to rent it out yourself, sell it or lease it long-term to someone who can.

For sure, there needs to be a 'carrot' there too.

Rents are at record highs, but only if you bumped it up in that teeny window before they clamped a rent cap on, and you are a corporate fund paying 3% tax instead of 50%. You have people stuck in a happy hour sale condition, who were renting it out to a decent tenant for 5 years during a recession, never upped the rent because of tenant loyalty. Tenant has moved on, and they can't adjust rent to market value. Market is frozen... UNLESS, you take the property OFF the market to "live in it yourself" for a reasonable period of time, and put it back on.

Oh ****, now there are less properties available because of this ridiculous cycle that has been created.


How many supermarkets would stay selling an item if you price-capped what they sell while they had a sale on?

Also, don't know if you noticed, but purchase prices aren't exactly low either. You can explain to me how you can purchase a flat for 200,000. Pay interest of 6% on that loan, and then make some money off it with a rent cap of 4% and the inability to evict a non-paying tenant? Oh yeah, and pay ~50% tax on rent, with the inability to write off the loan interest (unlike EVERY other business loan in existence), plus prtb, property tax, maintaining appliances, furniture et al.

I have been at this lark 20 years... long enough to not need to be patronised by you thanks. I only thank my own foresight to have 70% of my property in the commercial / retail space rather than poxy residential. And the residential I do have, I rent unfurnished. Residential turns from a measly 5% yield to major loss making overnight. As soon as a formerly well behaved tenant misses rent, or has a domestic, or throws a party which smashes a few windows.

Morning til night on media I hear about this housing crisis. It's of their own doing. Stop crucifying the service providers.

pwurple

antoinolachtnai wrote: »

You won't get the CGT tax relief unless it is your PPR, i.e., you are living in it.

I just don't see how the tax situation is in any way unfair in relation to a property you already own outright. It is the same rate of tax everybody else pays on their income.

Is unfair, because the tax you pay is based on WHO you are. Two houses side by side. One owned by a pension fund, one owned by a guy. Pension fund pays 3% of that rent into tax. Guy pays 50%.

How is that fair?

antoinolachtnai

antoinolachtnai wrote: »

You won't get the CGT tax relief unless it is your PPR, i.e., you are living in it.

As far as I'm aware this does not apply to the 7 year rule which is what I was referring to.

antoinolachtnai wrote: »

I just don't see how the tax situation is in any way unfair in relation to a property you already own outright. It is the same rate of tax everybody else pays on their income.

Its totally unfair to be paying tax at the marginal rate on rental income, especially if paying a mortgage.

Its not even treated as a business as other businesses have far more allowable deductions against tax for instance. In reality there should be low flat rate of tax applied to rental income, it needs to more profitable to encourage people into the game. Of course if you are a REIT you are basically tax exempt which is insane while hard working people trying to make some money renting a house or two are crucified in tax.

antoinolachtnai

Sure, there could be an allowance for a few years to let people get properties back into circulation.

If the government is going to give tax breaks or other subsidies, and I think they should, it makes the most sense to give them in relation to the building of new properties, not in relation to properties which are already in the market.