Budget 2018 for property market

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awec wrote: »

Would be political suicide for any party to give landlords tax breaks in the current climate. Ultimately it would make no difference to the supply of property, no difference to rent rates and would just put more money in landlords pockets.

Landlords can dream on.

I care more about the rent controls than tax. If that was gone I would put my properties back on long term.

Fian

davindub wrote: »

Landlords can already elect to charge vat on rental income and reclaim the inputs.

If this were possible on residential property it would have made sense to do it for anyone on a below market rent RPZ rentcap. Would still easily rent the place out and the vat refund would be something at least. However as has been pointed out it is only possible with commercial property - not residential.

davindub

Fian wrote: »

If this were possible on residential property it would have made sense to do it for anyone on a below market rent RPZ rentcap. Would still easily rent the place out and the vat refund would be something at least. However as has been pointed out it is only possible with commercial property - not residential.

Your outputs would still exceed inputs considerably, the market rent wouldn't be increased, so I don't see the attraction.

I think it was possible on residential before 2007 if memory serves me right, there was a rule that you could reclaim vat on the house purchase but had to repay it before selling the property through charging vat on rent.

OwlsZat

OwlsZat wrote: »

l projects. While having office space is clever given the Brexit, it appears for many relocating is prohibited by a limited housing market.

A 1% increase in stamp duty for commercial builds. Wonder does even come close to tipping the scales in making residential a better investment in € generated / sq ft.

sk8board

awec wrote: »

Would be political suicide for any party to give landlords tax breaks in the current climate. Ultimately it would make no difference to the supply of property, no difference to rent rates and would just put more money in landlords pockets.

Landlords can dream on.

I tend to disagree - I think they could do more to create a more professional marketplace. the gov made it clear in their 2012 capital allowance cuts that they wanted private landlords to solve their social housing problem. (granted, there were 23000 rental places on daft etc etc).
As a landlord, I just want the market to be more professional - which it can’t ever be while we pay 55-60% of rent in tax. We’ll cut every corner we possibly can. My tax returns last week for 2016 is 59%.

the government actually gains more in income tax from these higher rents than the LL does and they can’t continue to abdicate themselves from the argument and somehow push people to believe that it’s the role of the private investor landlord to provide social housing in Ireland, while implementing rent controls all the while.
they can promise all the social housing they want, but it won't be on-stream in any meaningful way for 18-36 months.
They’ve wreaked an investor market when its high, and did nothing when it was low.

The only option for an investment return is therefore through upping our yields (or become capital appreciation speculators, which I’ve no time for and will hurt the market ultimately. my rental yield is my family income).

Even following through on their own recommendation from a few years ago and allowing LPT be tax-deductible would be a start.

Instead they do nothing, and so the cycle continues.

OwlsZat

The only way landlords are going to solve the housing crisis is if they start building houses themselves.

DubCount

This budget admits (as if it hasn't been admitted already) that the government has no interest in the private landlord sector. They want to take on their own social housing building program, and in the course of an hour long speech, there was not one nod towards the existing private landlord.

- Help for accidental landlords earning rent on one property and paying in on another
- Allow LPT against tax
- Allow 100% of mortgage interest against tax
- Allow losses on rental income to be offset against non-rental income (where you are getting fleeced by a rogue tenant)

The one item that impacts on the private rental sector is the allowance of €5k in pre-letting expenses against rental income (to be clawed back unless rented for 4 years)

Lets see what the number of private landlords and private lettings registered with the RTB looks like this time next year.

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DubCount wrote: »

This budget admits (as if it hasn't been admitted already) that the government has no interest in the private landlord sector. They want to take on their own social housing building program, and in the course of an hour long speech, there was not one nod towards the existing private landlord.

- Help for accidental landlords earning rent on one property and paying in on another
- Allow LPT against tax
- Allow 100% of mortgage interest against tax
- Allow losses on rental income to be offset against non-rental income (where you are getting fleeced by a rogue tenant)

The one item that impacts on the private rental sector is the allowance of €5k in pre-letting expenses against rental income (to be clawed back unless rented for 4 years)

Lets see what the number of private landlords and private lettings registered with the RTB looks like this time next year.

I'm all out now for sure.
So that's 3 rentals for a start gone off the market. I know others too who , like me, were hoping and thought maybe the government had seen the error of its ways and would try to correct. Should have known really.

GGTrek

DubCount wrote: »

This budget admits (as if it hasn't been admitted already) that the government has no interest in the private landlord sector. They want to take on their own social housing building program, and in the course of an hour long speech, there was not one nod towards the existing private landlord.

- Help for accidental landlords earning rent on one property and paying in on another
- Allow LPT against tax
- Allow 100% of mortgage interest against tax
- Allow losses on rental income to be offset against non-rental income (where you are getting fleeced by a rogue tenant)

The one item that impacts on the private rental sector is the allowance of €5k in pre-letting expenses against rental income (to be clawed back unless rented for 4 years)

Lets see what the number of private landlords and private lettings registered with the RTB looks like this time next year.

This budget is a spit in the face of small landlords. I don't even know why they did that grand act of political posturing in the spring where they asked landlords for suggestions on how to improve the tax situation. In addition their social housing budget is a drop in the ocean. 1.83B euros will allow the building of around 4k two bedroom apartments in Dublin. They increased the BS Hap fund by 149M when they know that in cities no private landlord wants HAP due to all the masdive disadvantages of the scheme. More money chasing even less housing. I am not sure about what they are thinking. But since they always act in bad faith, they are probably further helping their friends in the big real estate funds.

The only good news is that they are again waiting until Christmas for the "presents". It gives me more time to serve a further termination notice.

sk8board

The RTB covered up the drop in registered LLs by signing up a bunch of housing associations tenancies, coupled with the time it takes to serve notice and sell a property (6-9 months?).
You only have to look at Daft hovering at just 2.9-3k available properties to see that the market is continuing to tighten ever further, irrespective of tenants staying longer.
The Gov intervention has done nothing and the absence of accidental LLs will just compound matters (although longer term, I believe that’s a good thing).

OwlsZat

The drop in the CGT holiday from 7 to 4 years will surely see a lot of rental places bought about 2012 flipped for a monster profit in the coming months.

Graham

OwlsZat wrote: »

The drop in the CGT holiday from 7 to 4 years will surely see a lot of rental places bought about 2012 flipped for a monster profit in the coming months.

Or to put it less hysterically.

Investors that bought property at the bottom of the market when there were no other buyers, at a time when 'experts' were suggesting it would take decades for the excess supply to be needed will now have the option of selling on their investment.

OwlsZat

Ya, those with money at the height of the recession certainly been rewarded.

The creation of the home building finance Ireland scheme and the local infrastructure housing activation fund seem to be in a similar vein. Giving developers state funded cheap land and cheap finance. What else does a developer do. Could we not have coordinated the design and contracting side of it and actually made the state some money instead?

Graham

OwlsZat wrote: »

Could we not have coordinated the design and contracting side of it and actually made the state some money instead?

The state as property developers, what could possibly go wrong :eek:

OwlsZat

Graham wrote: »

The state as property developers, what could possibly go wrong :eek:

Ya imagine the state providing their own money and land to themselves, and having to deal with the state planning departments. It's ludicrous. Let's just give away the state's land and money to the "highly skilled" developers. Sure we can force the tax payers to pick up the bill if it goes wrong and return to dark damp opposition benches :O

Graham

OwlsZat wrote: »

Ya imagine the state providing their own money and land to themselves, and having to deal with the state planning departments. It's ludicrous.

We agree on one thing at least

OwlsZat

The only thing that's ludicrous is that it's the totally 100% obvious solution, but for a couple of reasons it's never going happen. 

1. No Government will chance it due to the affect it would have on chance of re-election. Irish water was the perfect example of how hard it is to start a new body from scratch. The initial inefficiencies and public backlash are potential  political suicide. 
2. For the last few decades as a state we have been obsessed with making money from property. Property isn't a right for every citizen, but rather a money making vehicle to profit from.
Love to see us scrap our election system altogether. Its backward and preventing any real long term planning.

Graham

OwlsZat wrote: »

The only thing that's ludicrous is that it's the totally 100% obvious solution, but for a couple of reasons it's never going happen.

One of the main problems is the lack of affordable capital for development projects. I'm not convinced nationalising property development is the obvious solution.

In fact I can't think of much where nationalisation is the solution.

MayoSalmon

Graham wrote: »

One of the main problems is the lack of affordable capital for development projects. I'm not convinced nationalising property development is the obvious solution.

In fact I can't think of much where nationalisation is the solution.

Exactly...because it's not. You need only look at previous examples of where it has been tried and failed

ballyharpat

Who in their right mind would nationalise , not only house building but even more land buying by the government?? Have ye been following the Croke Park Agreement? the pensions of public sector? the difference in wages compared to private sector? Check out how much it costs to build a small 2/3 bed social house, compared to a private sector one.


Astronomical costs!!!

paulbok

Am I right in saying there was no mention of relief on mortgage interest rising to 85% as was promised last year when it was raised from 75-80%? Was supposed to go up 5% each year until back at 100%

VonBeanie

paulbok wrote: »

Am I right in saying there was no mention of relief on mortgage interest rising to 85% as was promised last year when it was raised from 75-80%? Was supposed to go up 5% each year until back at 100%

That wasn't in the budget speech but I expect it in the Finance Act, so it should happen. The budget is more about scoring political points and highlighting changes in policy direction. The real meat is in the Finance Bill.