Using Property Taxes to Encourage Redistribution of Family Homes

brightspark

Spanish Eyes wrote: »

Fair Deal Scheme. If family let out the family home of the person in receipt of FD, taxes have to be paid, and the FD is reduced. Meaning a lot of decent properties are lying idle.

The "Fair Deal Scheme" is very unfair to our elderly.

1, If they get cancer/heart disease etc., all their medical needs are largely taken care by the state. Unfortunate to get dementia or become immobilised etc., then the state takes 80% of your income and 7.75% of your assets every year.

If you never worked a day in your life and live in social housing then of course it makes little difference, if you have worked hard and saved (including paying into a private pension) then the state grabs it.

As you get older you are probably better off to squander your money as quickly as possible, no point in hoping that you will be able to gift it your family or friends.

beauf

RayCun wrote: »

1. "the families of hard working taxpayers"
not the hard-working taxpayers themselves, but the people who want to benefit from what someone else worked for. You know, scroungers :rolleyes:....

You can write someone out of a will if you think they do not deserve it. you can disown your whole family if you dislike them that much.

RayCun

RayCun wrote: »

1. "the families of hard working taxpayers"
not the hard-working taxpayers themselves, but the people who want to benefit from what someone else worked for. You know, scroungers :rolleyes:

2. Tax is tax, it all goes into the same pot. If you don't like the idea of this tax going on housing, feel free to imagine it going on education instead, or whatever things it is you are glad money is spent on.

1. So now if you accept inheritance from your parents, you're a scrounger? Get outta that garden. Who are they scrounging from? Their ma and da!!!?! :pac:
2. I'd love to see a breakdown of how much tax goes to the government as a result of these sky high rents. If rent wasn't as high as it is the tax intake would take a serious dent, I'd say.

Part and parcel of working your entire life is so that you can provide for your offspring. If I've worked my whole life to buy a house, I should be able to give it to whomever I damn well please when I pass on.

listermint

brightspark wrote: »

The "Fair Deal Scheme" is very unfair to our elderly.

1, If they get cancer/heart disease etc., all their medical needs are largely taken care by the state. Unfortunate to get dementia or become immobilised etc., then the state takes 80% of your income and 7.75% of your assets every year.

If you never worked a day in your life and live in social housing then of course it makes little difference, if you have worked hard and saved (including paying into a private pension) then the state grabs it.

As you get older you are probably better off to squander your money as quickly as possible, no point in hoping that you will be able to gift it your family or friends.

So what your saying is its unfair to the family then ...

STB.

RayCun wrote: »

Owning stocks and shares that you've worked all your life to own shouldn't be classed as wealth?

Owning a small business that you've worked all your life to own shouldn't be classed as wealth?

Owning an expensive car that you've worked all your life to own shouldn't be classed as wealth?

A house is an asset, of course it's wealth.

Owning stocks and shares is either gambling or an investment.

Owning a house is neither of those things. Many people who bought second hand houses have possibly paid a shed load of stamp duty and property tax. There is nothing else to squeeze. They've paid their way and made sacrifices.

You really are not that bright are you.

Also your expectations that any of this solves the governments problem of providing social housing is way off the mark. The solution is not private residences.

The solution is getting back to building fecking houses and revising HAP schemes for ONLY the most vulnerable, not people who have no interest in getting off their own backsides and grafting and saving.

RayCun

Deleted User wrote: »

1. So now if you accept inheritance from your parents, you're a scrounger?

We agree, then, the people concerned here are not the "hard-working taxpayers who worked their whole lives to pay for a house", but the people who want to inherit that house.

Amirani

Deleted User wrote: »

The housing crisis could be fixed in 6-12 months, if any politician had the stones to do it.

1. Incentivise building with tax breaks
2. Enforce the social & affordable housing planning conditions that have been around 20 years but which builder's have been allowed to buy their way out of
3. Locate all social housing outside the M50

A political party that campaigned promising those items is unlikely to be elected.

I don't think you have much evidence to suggest that the above would fix the housing crisis either. Your second and third points contradict each other too.

RayCun

STB. wrote: »

Owning stocks and share are either gambling or an investment.

Owning a house is neither of those things.

It is.

It's an investment.

Not a complicated concept.

LirW

RayCun wrote: »

We agree, then, the people concerned here are not the "hard-working taxpayers who worked their whole lives to pay for a house", but the people who want to inherit that house.

Would you turn down inheritance from your parents?

Amirani

STB. wrote: »

Owning stocks and share are either gambling or an investment.

Owning a house is neither of those things. Many people who bought second hand houses have possibly paid a shed load of stamp duty and property tax. There is nothing else to squeeze. They've paid their way and made sacrifices.

You really are not that bright are you.

You are aware that you pay stamp duty on shares also? You also pay Capital Gains Tax at far higher rates than you pay property tax.

RayCun

RayCun wrote: »

We agree, then, the people concerned here are not the "hard-working taxpayers who worked their whole lives to pay for a house", but the people who want to inherit that house.

Nope, it's the people who own that house and want to give it to their kids. We are as far away from agreement as can possibly be. The ideas you've espoused on this thread are absolute nonsense and an affront to hard working people.

Spanish Eyes

brightspark wrote: »

The "Fair Deal Scheme" is very unfair to our elderly.

1, If they get cancer/heart disease etc., all their medical needs are largely taken care by the state. Unfortunate to get dementia or become immobilised etc., then the state takes 80% of your income and 7.75% of your assets every year.

If you never worked a day in your life and live in social housing then of course it makes little difference, if you have worked hard and saved (including paying into a private pension) then the state grabs it.

As you get older you are probably better off to squander your money as quickly as possible, no point in hoping that you will be able to gift it your family or friends.

Absolutely agree. We are in this situation.

Not that we care about inheritance at all it is what happens.

Relative who left her well provided for would have been better to P it up against the wall after the pub seven nights a week, and left relative with nothing.

But that is not the way we operate.

I was just saying it out loud, because you don't get many opportunities to do this in real life. People think in different ways I know this.

But honestly, what is the incentive to save and pay your own way in your later years really when the person in the next room never worked, has nothing, and is getting the same facilities as those paying the bones of 5k euro a month. I am serious.

As a start, maybe there should be some incentive to lower the tax or the Fair Deal Contribution to idle family homes.

brightspark

listermint wrote: »

So what your saying is its unfair to the family then ...

No I'm not, it's unfair to the person who worked hard and saved their money.

If they want to give it all to an animal shelter then that's their choice...but it should be their choice.

They have already paid taxes all their lives to fund whatever the state deemed necessary at the time.

Amirani

LirW wrote: »

Would you turn down inheritance from your parents?

Nobody would. But that doesn't mean the State should do nothing to intervene in the accumulation and hoarding of wealth in the more well off elements of society. The ability to easily transfer wealth capital untaxed has been the biggest driver of inequality in Western societies. Thomas Piketty explains it well, assuming you haven't read much of his stuff?

Spanish Eyes

Amirani wrote: »

Nobody would. But that doesn't mean the State should do nothing to intervene in the accumulation and hoarding of wealth in the more well off elements of society. The ability to easily transfer wealth capital untaxed has been the biggest driver of inequality in Western societies. Thomas Piketty explains it well, assuming you haven't read much of his stuff?

What! No CGT, no Gift Tax (here I mean).

Must get on to my accountant so if I had anything to give, but you'd never know, the lotto numbers may come up sometime. :P

Maybe Piketty has more avoidance clues, must look that up.

Cyrus

Amirani wrote: »

Nobody would. But that doesn't mean the State should do nothing to intervene in the accumulation and hoarding of wealth in the more well off elements of society. The ability to easily transfer wealth capital untaxed has been the biggest driver of inequality in Western societies. Thomas Piketty explains it well, assuming you haven't read much of his stuff?

state intervention in accumulation of wealth

sorry comrade i dont agree :P

brightspark

Amirani wrote: »

Nobody would. But that doesn't mean the State should do nothing to intervene in the accumulation and hoarding of wealth in the more well off elements of society. The ability to easily transfer wealth capital untaxed has been the biggest driver of inequality in Western societies. Thomas Piketty explains it well, assuming you haven't read much of his stuff?

And we have inheritance taxes (CAT) with fairly modest exemption when you consider the value of property in our cities so the State is doing something.

Group A: €310,000 (increased to €320,000 this year) Applies where the beneficiary is a child (including adopted child, step-child and certain foster children) or minor child of a deceased child of the disponer. Parents also fall within this threshold where they take an inheritance of an absolute interest from a child.

Group B: €32,500 Applies where the beneficiary is a brother, sister, niece, nephew or lineal ancestor or lineal descendant of the disponer.

Group C: €16,250 Applies in all other cases.

Spanish Eyes

Cyrus wrote: »

state intervention in accumulation of wealth

sorry comrade i dont agree :P

Me neither. Paul Murphy is the person to contact. His number is 087 xxxxx

Amirani

Amirani wrote: »

Nobody would. But that doesn't mean the State should do nothing to intervene in the accumulation and hoarding of wealth in the more well off elements of society. The ability to easily transfer wealth capital untaxed has been the biggest driver of inequality in Western societies. Thomas Piketty explains it well, assuming you haven't read much of his stuff?

Paying off your mortgage does not equate, in most peoples' minds, with 'hoarding' of anything.

Imagine, for a second, someone who was:
born into poverty in the late '50s,
who left school and got a job down the docks at aged 13,
qualified for a mortgage aged 22,
bought a house in Dublin 1 @ a mortgage interest rate of 14%,
lived in one of the most under-privileged areas of the country for almost half a century (through the largest drugs epidemic this country has ever seen),
paid for their kids to go school and/or college,
paid off their mortgage and is now retired.

These people are "hoarding wealth" now, are they, because houses close to the city centre are fashionable in this day and age?

witchgirl26

RayCun wrote: »

Owning stocks and shares that you've worked all your life to own shouldn't be classed as wealth?

Owning a small business that you've worked all your life to own shouldn't be classed as wealth?

Owning an expensive car that you've worked all your life to own shouldn't be classed as wealth?

A house is an asset, of course it's wealth.

You purchase stocks and shares to make a profit - thus it's a wealth providing asset (or liability!) and you pay Capital Gains tax on the profit of stocks and shares.

A small business is set up to make a profit and give wealth - thus it's a wealth providing asset. And you pay the appropriate taxes including VAT and then Capital Gains if you sell the business as a going concern.

An expensive car is a choice to purchase as you can also purchase a cheaper car. However cars lose value the minute they are drive off the forecourt so it's not really wealth at all. You've already made a loss by just getting it home.

A house is purchased to provide shelter and accomodation. It is not a designed as a wealth generating asset if it is the primary residence of the family. Hence we don't pay Capital Gains on it. However if you own a second property, then yes that is a wealth generating asset and that's why you do pay Capital Gains on it. It's not really that complicated.

I don't think that trying to force people to move out of their homes or let people inherit early or anything like that is really fair. If they want to stay in the comfort of the home that they worked hard for and enjoy it in their latter years, let them. None of our family particularly want my mam's house as we've made our lives elsewhere and she loves where she lives. She has friends nearby, which is important to her and knows her neighbours. There are social isolation problems with moving elderly people. Also people who have Alzheimers often cope better at the beginning with familiar surroundings and items.

Spanish Eyes

brightspark wrote: »

And we have inheritance taxes (CAT) with fairly modest exemption when you consider the value of property in our cities so the State is doing something.

For Group A it was €525k (I think) during the boom.
Whoa.

But as long as the post recession elation keeps going, it will probably go back up there soon too.

LirW

Amirani wrote: »

Nobody would. But that doesn't mean the State should do nothing to intervene in the accumulation and hoarding of wealth in the more well off elements of society. The ability to easily transfer wealth capital untaxed has been the biggest driver of inequality in Western societies. Thomas Piketty explains it well, assuming you haven't read much of his stuff?

What is considered wealth though? I'm sorry but I refuse to believe that a family home worth 400k is considered wealth. It's an awful lot of money alright, but in the context of prices in the capital it would hardly get you a fancy house in an up-market area.
Of course the whole thing changes when there are several million in assets left behind.

Most people here in Ireland own one property, it's their home and most of them want to pass some on to their children to support them in life.
Currently there's a generation out there where people will be stuck renting.

I'd like to pass my house on to my children, it's not worth much and just because I own a house that doesn't make me a wealthy person.
There's a threshold in place anyway, and with shrinking family sized and the number of only children on the rise there will be plenty of houses that will be sold to pay the tax since 340k or whatever the threshold currently is, is reached with the majority of urban properties in Ireland.

I'm just wondering, genuinely: how would People on here like to see a change to the current system in place?

Amirani

Deleted User wrote: »

Paying off your mortgage does not equate, in most peoples' minds, with 'hoarding' of anything.

Imagine, for a second, someone who was:
born into poverty in the late '50s,
who left school and got a job down the docks at aged 13,
qualified for a mortgage aged 22,
bought a house in Dublin 1 @ a mortgage interest rate of 14%,
lived in one of the most under-privileged areas of the country for almost half a century (through the largest drugs epidemic this country has ever seen),
paid for their kids to go school and/or college,
paid off their mortgage and is now retired.

These people are "hoarding wealth" now, are they, because houses close to the city centre are fashionable in this day and age?

I haven't given my opinion here on what constitutes wealth hoarding. Just pointing out that the taxation treatment of capital (particularly vis a vis labour) is likely the biggest driver of wealth inequality in society today.

If you don't consider wealth inequality to be a problem, then naturally more aggressive taxation of wealth is not something you'd favour.

Spanish Eyes

Does anyone think that those on Fair Deal should get a relief for letting out their family house, rather than having to pay more for their care. Just wondered. And it would help those looking for homes too.

Where I live there are many elderly people and there are five houses on my road with no one living in them. Very sad really to see these empty houses, but the reality is, if you let out the house the FD means a bigger contribution.

I don't understand this. But maybe someone does.

beauf

Spanish Eyes wrote: »

Does anyone think that those on Fair Deal should get a relief for letting out their family house, rather than having to pay more for their care. Just wondered. And it would help those looking for homes too.

Where I live there are many elderly people and there are five houses on my road with no one living in them. Very sad really to see these empty houses, but the reality is, if you let out the house the FD means a bigger contribution.

I don't understand this. But maybe someone does.

Even if it was simple to do financially and legally.

There is a huge sentimental attachment to someone house, especially if its filled with a lifetime of a families memories. People can be very slow to come round to selling a house even when that person has passed on. If they are still alive, its even harder. You might say store all the persons belongings. But there is no means to do this.

brightspark

Spanish Eyes wrote: »

Does anyone think that those on Fair Deal should get a relief for letting out their family house, rather than having to pay more for their care. Just wondered. And it would help those looking for homes too.

Where I live there are many elderly people and there are five houses on my road with no one living in them. Very sad really to see these empty houses, but the reality is, if you let out the house the FD means a bigger contribution.

I don't understand this. But maybe someone does.

I'm in a similar situation and would let out the house for next to nothing (it actually costs money to leave a house empty) if I could be sure of the following.

1. The house would be maintained in at least it's current condition, without having to pay for any problems that might arise (faulty washing machine etc.)

2, The house would be vacated when I need it, with reasonable notice of course, but it would be vacated at the end of the notice period.

3, The cost of any improvements required would be met from the rental income.


However that isn't the case.

Spanish Eyes

beauf wrote: »

Even if it was simple to do financially and legally.

There is a huge sentimental attachment to someone house, especially if its filled with a lifetime of a families memories. People can be very slow to come round to selling a house even when that person has passed on. If they are still alive, its even harder. You might say store all the persons belongings. But there is no means to do this.

Ah yes, I know what you mean, have personal experience.

But my point was, that if the value of a family home of a FD recipient (which is exempt from the calculation for FD BTW) was rented out, the rental income requires a tax return, and the income is calculated for FD too. Just saying!

Amirani

Amirani wrote: »

I haven't given my opinion here on what constitutes wealth hoarding. Just pointing out that the taxation treatment of capital (particularly vis a vis labour) is likely the biggest driver of wealth inequality in society today.

If you don't consider wealth inequality to be a problem, then naturally more aggressive taxation of wealth is not something you'd favour.

Apologies, then, I misconstrued your earlier post as I thought it was in relation to inheritance of property.

beauf

Amirani wrote: »

I haven't given my opinion here on what constitutes wealth hoarding. Just pointing out that the taxation treatment of capital (particularly vis a vis labour) is likely the biggest driver of wealth inequality in society today.

If you don't consider wealth inequality to be a problem, then naturally more aggressive taxation of wealth is not something you'd favour.

I'm a bit conflicted about this. Most people who are wealthy are self made. Relatively few inherit it.

But money makes money. You'll get a better deal buying 10 apples than buying 1.

https://wiki.lspace.org/mediawiki/Sam_Vimes_Theory_of_Economic_Injustice

Assetbacked

Cyrus wrote: »

conjurs up images of people who have paid tax all their life and already made their contribution to society and probably funded most of their own pension.

They have benefited from the astronomical increase in the value of their property without really doing anything to achieve it. Where they would have purchased the house for a relatively modest sum, they could sell it for an incredible profit. Therefore, property owners are the wealthy in society and their wealth should be taxed as our tax system aims to ensure that those who are richer pay more. It is entirely fair and to not do it results in an extremely unfair system. We have returned to a situation which previously existed with landowners being the wealthy in society and now need to restore the balance.

And just to add; an older person selling an asset worth a few hundred thousand euro or even more versus young people (who are becoming older with each year the problem persists) struggling and failing to save for their future are the competing interests to balance out.

On inheritance tax - the child beneficiary threshold is incredible. 320k tax free. A person on the average salary would work for 8 years on their 40k per year salary tax free for a similar benefit. This is not fair.