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Covid payments for Landlords
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Thanks for bringing this thread completely off topic!
Hi. in case it was not clear, the point is that being "regulated" does not mean that you should be entitled to have the state cover your tenants rent. Work it out with your tenant. You tenant will still owe you. If you have a bad tenant, then that is bad luck but also a failing in your vetting process. A good tenant might not be able to pay now but will work something out with you. Learn from the experience and if you figure that you haven't got the time/resources/skills to be in that field, then there are other vehicles to get exposure to property without those same headaches/risks.
Another poster implied that it should because housing is regulated. I simply pointed out that there are other businesses and investments that are also regulated (for example, you could invest in a taxi company). They should also not have their business/investment income replaced by the state.0 -
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OK folks, we're getting slightly off track here. Donald Trump feel free to start a thread somewhere to discuss market regulation and investments.0 -
Donald Trump wrote: »Hi. in case it was not clear, the point is that being "regulated" does not mean that you should be entitled to have the state cover your tenants rent.
A temporary 3 month eviction ban is not a "normal" regulation.
Tenants being laid off at the rate we are seeing is not "normal"
This emergency temporary ban is to protect society and compensation shouldn't be restricted to just tenants.0 -
Donald Trump wrote: »Hi.
Plenty of laws change. Regulations come in over time. Business environments change etc.
If my posts do not make sense, they are not making sense to you. There are limited options for me to help you with that.
I take it your a little slow. I dont think there is much point in replying to your posts any longer.0 -
Join Date:Posts: 30620
If some landlords are paying USC and PRSI on their rental income it suits the government to view rental income as a portion of a person's gross income (regardless of whether or not its profitable). Accordingly- if/when this is interrupted- as the person has paid social insurance (of varying types) on the income stream, it would make sense that they be allowed to draw down on this 'insurance' that they are paying.
If rental income is viewed solely as investment income (which it isn't by the Revenue Commissioners)- then fine, treat it as investment income- and apply general warnings to it- the same as to any other form of investment income.
Rental income- in the case of small landlords- is treated wholly differently to investment income from other investment classes- accordingly, at least in the case of small scale landlords, it is only fair that there be cognisance of this.
Changing the manner in which rental income is treated- almost mid sentence, to suit a given purpose, is unfair and unreasonable. Small landlords have complained about the tax treatment of their rental income for a long while (particularly in comparison to the light touch treatment of rental income by the larger REITs etc). The grossest inequity is the application of USC and PRSI on rental income, and the manner in which losses can't be carried etc.
They do have a valid point. If you're going to charge them tax on it- in a similar manner to income tax rather than investment income- this affords them a case that if there is a catastrophic fall in this income- it deserves to be viewed in a similar context as a catastrophic fall in income from someone whose income is in a different sector.
The expression 'having cake and eating it' comes to mind.
If you want to view rental income purely as investment income- then treat it as such as a tax and social security perspective. If you don't- there is an implied entitlement on the part of the person who is paying tax and other demands on it- that it will be treated differently.
Landlords are vilified in Ireland- to a remarkable extent- however, in this instance, by charging USC and PRSI on rental income for small scale landlords- there is a cost right now for the exchequer- and hopefully they might learn a lesson and revisit how they treat this income (or tax it in an entirely different manner) in future.0 -
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The_Conductor wrote: »If some landlords are paying USC and PRSI on their rental income it suits the government to view rental income as a portion of a person's gross income (regardless of whether or not its profitable). Accordingly- if/when this is interrupted- as the person has paid social insurance (of varying types) on the income stream, it would make sense that they be allowed to draw down on this 'insurance' that they are paying.
If rental income is viewed solely as investment income (which it isn't by the Revenue Commissioners)- then fine, treat it as investment income- and apply general warnings to it- the same as to any other form of investment income.
Rental income- in the case of small landlords- is treated wholly differently to investment income from other investment classes- accordingly, at least in the case of small scale landlords, it is only fair that there be cognisance of this.
Changing the manner in which rental income is treated- almost mid sentence, to suit a given purpose, is unfair and unreasonable. Small landlords have complained about the tax treatment of their rental income for a long while (particularly in comparison to the light touch treatment of rental income by the larger REITs etc). The grossest inequity is the application of USC and PRSI on rental income, and the manner in which losses can't be carried etc.
They do have a valid point. If you're going to charge them tax on it- in a similar manner to income tax rather than investment income- this affords them a case that if there is a catastrophic fall in this income- it deserves to be viewed in a similar context as a catastrophic fall in income from someone whose income is in a different sector.
The expression 'having cake and eating it' comes to mind.
If you want to view rental income purely as investment income- then treat it as such as a tax and social security perspective. If you don't- there is an implied entitlement on the part of the person who is paying tax and other demands on it- that it will be treated differently.
Landlords are vilified in Ireland- to a remarkable extent- however, in this instance, by charging USC and PRSI on rental income for small scale landlords- there is a cost right now for the exchequer- and hopefully they might learn a lesson and revisit how they treat this income (or tax it in an entirely different manner) in future.
There's prsi and USC applicable to dividends from equity investments aswell.0 -
Join Date:Posts: 30620
There's prsi and USC applicable to dividends from equity investments aswell.
You can carry losses from dividends and equities and offset them against taxable income in future years- they specifically stopped landlords from carrying losses in 2014. Its not comparing like with like. Also USC is calculated on gross rental income (even if you make a loss) rather than net- whereas you have no USC on share and equity trading, if you book a loss.
There is a lack of cognisance that you can actually make a loss when letting a property (esp. in the current climate).0 -
Donald Trump wrote: »Yes, but do you not understand my point about moral hazard?
You are running things correctly. You are managing. It might be difficult but you are managing and you probably have decent tenants and you will hopefully get your back money from them.
If the government implemented a scheme whereby all rents to all landlords were just covered if your tenant did not pay then there is no incentive for you to bother running your things correctly. There is no incentive for you to work out a plan with your tenants. And there is no incentive for your tenants to actually pay either. Why would they bother?
I never said they should do that. Like you said there is risks vs reward. The issue is where ll are expected to pick up the social award of the year or treat it like a business and get rid of people if they do not pay and more importantly get rid of them promptly so they can continue their business.
In this case, right now. Ll are not allowed evict and even when they can evict. It can take a year or longer.0 -
The_Conductor wrote: »If some landlords are paying USC and PRSI on their rental income it suits the government to view rental income as a portion of a person's gross income (regardless of whether or not its profitable). Accordingly- if/when this is interrupted- as the person has paid social insurance (of varying types) on the income stream, it would make sense that they be allowed to draw down on this 'insurance' that they are paying.
If rental income is viewed solely as investment income (which it isn't by the Revenue Commissioners)- then fine, treat it as investment income- and apply general warnings to it- the same as to any other form of investment income.
Rental income- in the case of small landlords- is treated wholly differently to investment income from other investment classes- accordingly, at least in the case of small scale landlords, it is only fair that there be cognisance of this.
Changing the manner in which rental income is treated- almost mid sentence, to suit a given purpose, is unfair and unreasonable. Small landlords have complained about the tax treatment of their rental income for a long while (particularly in comparison to the light touch treatment of rental income by the larger REITs etc). The grossest inequity is the application of USC and PRSI on rental income, and the manner in which losses can't be carried etc.
They do have a valid point. If you're going to charge them tax on it- in a similar manner to income tax rather than investment income- this affords them a case that if there is a catastrophic fall in this income- it deserves to be viewed in a similar context as a catastrophic fall in income from someone whose income is in a different sector.
The expression 'having cake and eating it' comes to mind.
If you want to view rental income purely as investment income- then treat it as such as a tax and social security perspective. If you don't- there is an implied entitlement on the part of the person who is paying tax and other demands on it- that it will be treated differently.
Landlords are vilified in Ireland- to a remarkable extent- however, in this instance, by charging USC and PRSI on rental income for small scale landlords- there is a cost right now for the exchequer- and hopefully they might learn a lesson and revisit how they treat this income (or tax it in an entirely different manner) in future.
Hi.
Far from it. It is some landlords that wants their cake and eat it too.
If I start a business, the business gets a loan and buys a capital asset, the the business can depreciate that asset over 7 years as an expense which reduces the annual profit of the company and it's annual tax liability.
A "landlord" (in the context of what many are using the term to describe on here) cannot do that. They cannot depreciate the asset over 7 years
Unfair you say? Well don't forget what happens on the other end.
If my business is liquidated after 10 years, I will have to pay tax on the income from liquidating the asset even if it was sold for the same as the original purchase price.
If you buy a house as a "landlord', pay your tax on the income from it as you draw it out. But you don't have to pay any tax on income from liquidating the capital asset (if you sell it for the same price).
In reality, the entire "landlord" market is subsidised by the state anyway. It would be interesting to imagine where it would be if it were not so. Both rents and property prices would fall dramatically if it were not so. But there would also be chaos and that is why it would never be allowed to happen.0 -
Donald Trump wrote: »Hi.
I never said that it was easy, nor that it is "free money" (hence the quotes).
However, it appears that for a section of landlords/investors that they expect that it should be. Those are the section that I am addressing in my points. They get into it and realise that it isn't (usually when there is a bumpy patch) and then start moaning. Plenty do run their things professionally and can cope right now. As you said, you are engaging with your tenants and working things out.
I am always reminded of the time of the SSIA's when some people took the equity option that banks were providing. Everything was grand while the market was rising and then it took a dive in the middle and you had all these people claiming that the government should bail them out and pay them back their losses. Because of the option that they had chosen. It was risk and reward. (In the end up, the market recovered before the end of the scheme so it became a moot point)
As regards the "highest bidder" I am not sure of the relevance for that. You recognise that you have to put in some of your own money. Do you think that that money should be free from risk? If no, then you'll accept that, as with any investment, you might lose that. There is no obligation on the state to bail you out if it doesn't turn out how you want it to. My point is again addressed to those who appear to think that any of that risk should be covered by the state rather than them. Do you personally think that they way things should work is that people get a loan from a bank. Outbid the next person and then think that the state should refund them for any losses that they may or may not have done their research on and anticipated? I don't. If you don't either then you agree with me. That's great.
I don’t think the government should bail ll out at all. At the same time, you need to acknowledge that government interference is too much and is having major impacts on the market for ll. if it was treated like a normal business. Then there should be no supports at all but due to everything the government is doing, ll should be receiving something. I’m not advising for ll bailouts. More so in tax credits or exemptions from certain things.0 -
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The_Conductor wrote: »You can carry losses from dividends and equities and offset them against taxable income in future years- they specifically stopped landlords from carrying losses in 2014. Its not comparing like with like. Also USC is calculated on gross rental income (even if you make a loss) rather than net- whereas you have no USC on share and equity trading, if you book a loss.
There is a lack of cognisance that you can actually make a loss when letting a property (esp. in the current climate).
Not sure how you can carry a loss from a dividend? You either get the income or you don't. You can carry the losses when you buy and sell the shares which is treated no differently to buying and selling property. I pay USC on my dividends which is the same as rental income. I pay CGT on realised capital gains (which are now zero with the markets going to pot).
Property investors who bought in the early part of the last decade pay no CGT (up to 7 years) which was to encourage people buy distressed property so not exactly being beaten with an unfairness stick compared to investors in equities0 -
I would agree with "Donald Trump" if the market was allowed to react freely, it's not.
The government stopped that, rent freezes and no evictions etc etc is government intervention.
If there is government intervention one way then there should be compensation if the intervention causes material loss. Commonsense.
I would love if the government stopped intervening .. for example it would stop me putting up the rent every year as it adversely affects the value of the property if I don't.
This hits in on the nail0 -
A temporary 3 month eviction ban is not a "normal" regulation.
Tenants being laid off at the rate we are seeing is not "normal"
This emergency temporary ban is to protect society and compensation shouldn't be restricted to just tenants.
I actually disagree with this. The extra money people receive in covid 19payments can be used to pay off more of their rent payments. If you have a couple on 700 a week when it is usually 400. The extra 300 equates to 1200 a month. This would be a decent chunk off their rent. Then using saving etc would pay the difference.0 -
handlemaster wrote: »I take it your a little slow. I dont think there is much point in replying to your posts any longer.
well you're the property market expert guru dude.
Yet I'm not the one moaning I want a bailout from the state. Waaahh wahh
Funny that eh?
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The_Conductor wrote: »You can carry losses from dividends and equities and offset them against taxable income in future years- they specifically stopped landlords from carrying losses in 2014. Its not comparing like with like. Also USC is calculated on gross rental income (even if you make a loss) rather than net- whereas you have no USC on share and equity trading, if you book a loss.
There is a lack of cognisance that you can actually make a loss when letting a property (esp. in the current climate).
Usc isn’t just on gross. It’s after current expenses(can’t remember the term) and before capital allowances.0 -
This hits in on the nail
Government intervention includes rent supplements and HAP and council houses etc. All of those support the market.
If summary evictions were allowed, but the government pulled all of it's subsidies, you would see rents crash. I mean all of the supports, not just the payments. It would need to stop buying stock and also sell off all it's existing stock to buyers who could evict the tenants.
So you can't look at one side of it and not look at the other.
I do not want to continue this point as the fella said above to start a thread on it. I did want to point out the other side of it.0 -
Interestingly you can depreciate a residential house in the USA and place a charge against tax for that which means that basically there is no or little income tax on residential in the States.
You can also defer capital gains by buying another asset and selling the previous one rolling up the gain into the new asset.
Ireland is actually very anti landlord. Interest rates here are high like 5/ , in the UK landlord can get 1.5 or 2 on fixed ( but can't write interest against income unless a company)0 -
Interestingly you can depreciate a residential house in the USA and place a charge against tax for that which means that basically there is no or little income tax on residential in the States.
You can also defer capital gains by buying another asset and selling the previous one rolling up the gain into the new asset.
Ireland is actually very anti landlord. Interest rates here are high like 5/ , in the UK landlord can get 1.5 or 2 on fixed ( but can't write interest against income unless a company)
Most US cities have far more severe rental controls than here. And tenants have more rights - for example, you may need to give first refusal to a tenant to buy your property if you want to sell it.
If your tenant has been in your house for a while and suddenly a developer comes in and wants to buy a few houses in a row to do a new development, the tenant can be entitled to some of that windfall
There is also a property tax in most states. It can be, say, 1% of the property value. It is not small0 -
HAP is not helping the market if it was then why did the state decide to make it illegal to discriminate against HAP tenants?Donald Trump wrote: »Government intervention includes rent supplements and HAP and council houses etc. All of those support the market.
If summary evictions were allowed, but the government pulled all of it's subsidies, you would see rents crash. I mean all of the supports, not just the payments. It would need to stop buying stock and also sell off all it's existing stock to buyers who could evict the tenants.
So you can't look at one side of it and not look at the other.
I do not want to continue this point as the fella said above to start a thread on it. I did want to point out the other side of it.0 -
The_Conductor wrote: »You can carry losses from dividends and equities and offset them against taxable income in future years- they specifically stopped landlords from carrying losses in 2014. Its not comparing like with like. Also USC is calculated on gross rental income (even if you make a loss) rather than net- whereas you have no USC on share and equity trading, if you book a loss.
There is a lack of cognisance that you can actually make a loss when letting a property (esp. in the current climate).
Your first statement is utter rubbish; firstly, how can you have losses from dividends which are gross items of income not attracting any expenses. Secondly, losses on equities, other than the 0.01% who might be carrying on a trade, are not offset against income in the first instance. Revenue very rarely accept that equity and share dealings amount to a trade. Certainly not the casual transactions which predominate. The equivalent in the property sector would be someone operating a serviced office or hotel enterprise.0 -
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The Student wrote: »HAP is not helping the market if it was then why did the state decide to make it illegal to discriminate against HAP tenants?
Interesting chain of logic. I'd be interested to hear more.
What do you think would happen if the state stopped all HAP or other rental supplement payments tomorrow (and suppose also allowed summary evictions).
Do you think that rents would go up? Stay the same or reduce?0 -
Your first statement is utter rubbish; firstly, how can you have losses from dividends which are gross items of income not attracting any expenses. Secondly, losses on equities, other than the 0.01% who might be carrying on a trade, are not offset against income in the first instance. Revenue very rarely accept that equity and share dealings amount to a trade. Certainly not the casual transactions which predominate. The equivalent in the property sector would be someone operating a serviced office or hotel enterprise.
I could be wrong, but I think I had similar "difference of opinion" with that poster before.
They appeared to think that they should be allowed to deduct mortgage repayments from their rental income. And I think that they also think that at the end of it, the person should be allowed to sell the property with a cost base (for tax purposes) of the price they bought it for.
They don't seem to realise that if that was the way things worked, then there would be an immediate inflation of a property bubble, pushing houses completely out of the reach of the average middle class, along with meaning that no high earner would ever pay any income tax.0 -
Donald Trump wrote: »Interesting chain of logic. I'd be interested to hear more.
What do you think would happen if the state stopped all HAP or other rental supplement payments tomorrow (and suppose also allowed summary evictions).
Do you think that rents would go up? Stay the same or reduce?
They would in the main remain the same. The only way they would fall is if supply meets demand. How many people come to viewings who don't receive any state support for rent? At least half !0 -
The Student wrote: »They would in the main remain the same. The only way they would fall is if supply meets demand. How many people come to viewings who don't receive any state support for rent? At least half !
I think that it a very naive, and completely wrong, understanding.
If there are 100 houses and 105 people looking to rent then prices will go up by a lot.
If there are 100 house and 95 looking to rent then prices will drop by a lot. Even though the difference is only about 10%. In the former, the market price is set by what the 6th poorest person is willing to pay to not sleep in a ditch. In the latter it is what the 6th lowest landlord is prepared to accept instead of having their property sit completely idle. Those number may be very far apart. Simplistic example, but demonstrates the basic idea.
If, hypothetically, all people receiving rent support, lost that support then you as a landlord would have to decide whether to drastically reduce your rent or kick them out. You might decide to kick them out. As might many many landlords of similar tenants. Huge effective supply increase and drastically lowered demand due to HAPs effectively not being able to compete at all at current prices.
You are going to be competing against a lot of people for tenants. A week or two of airbnb properties dumping onto the market had a noticeable effect. How many properties do ya think might come to market under my scenario? All these HAPs etc are effectively subsidies to property owners, and artificially keep prices up, which benefits the same owners. Anytime you have external influence like that, it will distort what would otherwise be the natural level of the market
(I am not saying HAP should be stopped, just pointing out to those complaining about state intervention that state intervention is very much for your benefit)0 -
Donald Trump wrote: »I think that it a very naive, and completely wrong, understanding.
If there are 100 houses and 105 people looking to rent then prices will go up by a lot.
If there are 100 house and 95 looking to rent then prices will drop by a lot. Even though the difference is only about 10%. In the former, the market price is set by what the 6th poorest person is willing to pay to not sleep in a ditch. In the latter it is what the 6th lowest landlord is prepared to accept instead of having their property sit completely idle. Those number may be very far apart. Simplistic example, but demonstrates the basic idea.
If, hypothetically, all people receiving rent support, lost that support then you as a landlord would have to decide whether to drastically reduce your rent or kick them out. You might decide to kick them out. As might many many landlords of similar tenants. Huge effective supply increase and drastically lowered demand due to HAPs effectively not being able to compete at all at current prices.
You are going to be competing against a lot of people for tenants. A week or two of airbnb properties dumping onto the market had a noticeable effect. How many properties do ya think might come to market under my scenario? All these HAPs etc are effectively subsidies to property owners, and artificially keep prices up, which benefits the same owners. Anytime you have external influence like that, it will distort what would otherwise be the natural level of the market
(I am not saying HAP should be stopped, just pointing out to those complaining about state intervention that state intervention is very much for your benefit)
You are over estimating the number of Air BnB are out there. I was at a viewing before Christmas and there were 10 different parties looking to rent the property and only two were receiving state rental support.
Your argument is only valid were supply is close to demand. We are nowhere near that. The state suggest we need 35k new properties each year just to stand still. Do you honestly believe there are multiples of that in the Air BnB?0 -
The Student wrote: »You are over estimating the number of Air BnB are out there. I was at a viewing before Christmas and there were 10 different parties looking to rent the property and only two were receiving state rental support.
Your argument is only valid were supply is close to demand. We are nowhere near that. The state suggest we need 35k new properties each year just to stand still. Do you honestly believe there are multiples of that in the Air BnB?
What are you talking about airbnb for. I tried to use it as a simple example to explain a simple concept to you. I would have thought that, being a property guru, you might have been aware that a few weeks a ago, a chunk of previously short-let properties landed on the market together. Maybe you were not aware. Regardless, nothing in my post said, or even gave any indication that I thought that that specific increase to the market for that specific reason would continue.
I am talking about HAP. The same thing you were on about in the previous post. You think that if there was no HAP, and summary evictions were allowed, that overall rents would not change. You are seriously deluded if you think so.0 -
Donald Trump wrote: »What are you talking about airbnb for. I tried to use it as a simple example to explain a simple concept to you. I would have thought that, being a property guru, you might have been aware that a few weeks a ago, a chunk of previously short-let properties landed on the market together. Maybe you were not aware. Regardless, nothing in my post said, or even gave any indication that I thought that that specific increase to the market for that specific reason would continue.
I am talking about HAP. The same thing you were on about in the previous post. You think that if there was no HAP, and summary evictions were allowed, that overall rents would not change. You are seriously deluded if you think so.
You were the person who originally brought up Airbnb so logically he would comment on it. You should be more precise about what you mean about Airbnb instead of attacking his comment and can come across very condescending in your tone.
You might lower prices where hap is more in demand but as the other poster pointed out. Location is key here. If it’s a high demand area where people want to live. It won’t impact them as demand will still be high. He pointed out that out of 10people looking at one property. 8 were private. That is still 8people where only one would get it so demand is still more than supply.
You also didn’t take into account that people that cannot use hap any longer might use more of their disposable income or might share the house with another tenant that needs hap.0 -
Donald Trump wrote: »What are you talking about airbnb for. I tried to use it as a simple example to explain a simple concept to you. I would have thought that, being a property guru, you might have been aware that a few weeks a ago, a chunk of previously short-let properties landed on the market together. Maybe you were not aware. Regardless, nothing in my post said, or even gave any indication that I thought that that specific increase to the market for that specific reason would continue.
I am talking about HAP. The same thing you were on about in the previous post. You think that if there was no HAP, and summary evictions were allowed, that overall rents would not change. You are seriously deluded if you think so.
Were is the extra supply coming from to use your example of 100 properties and 105 trying to rent them. Do you think that supply and demand is that close?
If you want to use examples then can I suggest you think them through before you use them.0 -
You were the person who originally brought up Airbnb so logically he would comment on it. You should be more precise about what you mean about Airbnb instead of attacking his comment and can come across very condescending in your tone.
You might lower prices where hap is more in demand but as the other poster pointed out. Location is key here. If it’s a high demand area where people want to live. It won’t impact them as demand will still be high. He pointed out that out of 10people looking at one property. 8 were private. That is still 8people where only one would get it so demand is still more than supply.
You also didn’t take into account that people that cannot use hap any longer might use more of their disposable income or might share the house with another tenant that needs hap.
Hi. My sentence that mentioned airbnb was thisYou are going to be competing against a lot of people for tenants. A week or two of airbnb properties dumping onto the market had a noticeable effect. How many properties do ya think might come to market under my scenario? All these HAPs etc are effectively subsidies to property owners, and artificially keep prices up, which benefits the same owners. Anytime you have external influence like that, it will distort what would otherwise be the natural level of the market
How on earth someone read those words and thought I was saying that I thought that multiples of 35k properties were going to come from airbnb is beyond me.
The point still stands. Landlords are hugely subsidised by the state. The ones that inhabit this forum don't seem to be able to comprehend that, but then again they appear to be the same ones that expect the state to give them free money about 3 weeks into a situation. 3 weeks.
I've had enough of this anyway for a while. Will leave ye all to it. It's like playing handball against a haystack0 -
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Donald Trump wrote: »I've had enough of this anyway for a while. Will leave ye all to it. It's like playing handball against a haystack
That will make it a Good Friday then.
But you’ve posted this before and still came back posting nonsense so it remains to be seen if you really will “leave it at that”.
Anyway, let us know how you get on.0
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