Irish Property Market chat II - *read mod note post #1 before posting*

Timing belt

https://www.boards.ie/discussion/comment/118124227#Comment_118124227

The temporary reduction in VAT rates last year are all feeding into year on year inflation which will fall away next year... Carbon taxes are the real killer as they increase the cost of anything transported and will continue to do so till there is a viable alternative for truck drivers

Timing belt

https://www.boards.ie/discussion/comment/118123397#Comment_118123397

There is a big difference between now and 2008.

In the run up to 2008 the Household consumption of Fixed Capital (which will mainly be Residential real estate) did not correlate to the Net disposable income of households as a bubble was created due to excess credit in the market. Since the Crash of 2008 there has been a direct correlation between household spending on property and net disposable income of households.

Source: CSO - N2009 - T09. Household Income and Expenditure

Shaw8494

Hi all,

I have been offered to buy a house unexpectedly, I have a 25% deposit and the mortgage would be less that two times my salary. However I am still in my probation period of a new job, under a one year contract. Has anyone any any advice or experience where I could start to try and get a mortgage? Thank you.

cnocbui

https://www.boards.ie/discussion/comment/118127173#Comment_118127173

Grab it. Given the current state of the market, you should have no problem selling it if you are fired. You might even find another job.

cnocbui

https://www.boards.ie/discussion/comment/118124227#Comment_118124227

All taxes have something to do with inflation. They increase the cost of things relative to diposable income, making them relatively more expensive.

Marius34

https://www.boards.ie/discussion/comment/118127968#Comment_118127968

I probably missed some news, what's happening with USC? What it has todo with Inflation? Increase or Decrease?

cnocbui

https://www.boards.ie/discussion/comment/118128131#Comment_118128131

Nothing is happening with it; twas was a bit of sarcasm on my part.

Amadan Dubh

https://www.boards.ie/discussion/comment/118128131#Comment_118128131

USC is one of the many reasons FG in particular will be turfed to the opposition benches in a few years, precisely because nothing has changed with it!

In 2016 they campaigned with a promise to abolish it - when the economic recovery was underway and things were looking up. Yet apparently we have had significant economic "growth" since 2016 but the USC is still with us. It's not something easy to define but it is just not right to claim that everything has been hunky dory and sustainable, but things like the USC and other income tax reforms have not occurred.

Like with the ESRB report mentioned above; it is an officially used metric that shows what it is intending to show but it doesn't necessarily mean that it is a practical barometer on which policies should be based - I hope no one is a regulator but for sure the best and brightest do not end up at the regulators as private practice is too lucrative which means it would not be a surprise for me that the regulators are floundering after what has happened the last few years and change for them and their way of looking at problems is happening too slowly to take meaningful action to correct the situation.

Bass Reeves

https://www.boards.ie/discussion/comment/118130346#Comment_118130346

Like so many other you have not got a clue about tax. Any party that thinks about abolishing USC needs there head examined. It is the most progressive tax we have. You pay virtually nothing on the first 12k( something I disagree about as well as the 13k limit where USC is refundable therefore part time workers mostly students pay no tax) on the he next 8k I think it is 4.5% and 8% after that. The wealthy hate it, you cannot avoid it, it not allowable against pension contributions, health costs, all BIK income is caught by it.

How the hell would the government replace it.

Amadan Dubh

https://www.boards.ie/discussion/comment/118131333#Comment_118131333

Well, when you look at how public funds are spent I think it is not about replacing it but cutting the cloth to fit the services actually needing to be paid for. Broadband, children's hospital, Dáil printer, HAP, health service etc. all point to the State having too much money and not enough sense. As such, I think it is reasonable to want to reform a tax that was brought in to assist with the bailout. Perhaps a wealth tax could be brought in to replace it and an additional tax at a higher rate for incomes over €150k or something like that.

reubenreuben

https://www.boards.ie/discussion/comment/118131333#Comment_118131333

Don't think you have to be that wealthy to dislike it. Its the worst type of tax.

Bass Reeves

https://www.boards.ie/discussion/comment/118131919#Comment_118131919

https://www.boards.ie/discussion/comment/118132004#Comment_118132004

Public funds are wasted in every economy and every country. At nearly 60 years of age I am an agnostic about waste on any government and public services. We do not want direct taxes, we do not want indirect taxes, we do not want consumption taxes, we do not want water charges.

USC brings in over 4 billion in any year. LPT bring in less than half a billion. Considering if you have less than 13k in income you do not pay USC,

On the first

12k you pay 60 euro, from

12-20k you pay 160, then from

20-70 you pay 2250 they it's

8% on everything.

20k you pay 180

30k you pay 630

40k you pay 1080

50k you pay 1530

60k you pay 1980

70k you pay 2430

Now watch what happens

80k you pay 3230

90k you pay 4030

100k you pay 4830

150k you pay 8850

200k you pay 12850

500k you pay 36850

Now do you understand why wealthy people hate it. But worse than that you cannot avoid it, you cannot use losses from a sole trader business to bring down your USC, you cannot make a pension contribution and get it refunded.

If you are a judge, or a high paid public servant you cannot work the system and avoid it, neither as banker or a CEO of a PLC can you avoid it.

People who dislike USC have not got a clue about progressive taxation. If I have any disagreement with it is that the base rate below 20k is too low. 4.5% should be the base rate to 70k

javaboy

https://www.boards.ie/discussion/comment/118133820#Comment_118133820

Now do you understand why wealthy people hate it

Slight correction. High income people hate it, not all wealthy people 🙂

People who dislike USC have not got a clue about progressive taxation.

I understand that it's a progressive tax however I can still hate it because it's taking almost 8% out of my income.

JimmyVik

https://www.boards.ie/discussion/comment/118135222#Comment_118135222

100% agree.

Frank3.5

https://www.boards.ie/discussion/comment/118127942#Comment_118127942

Talk to a Mortgage broker. Market has slowed up last few weeks.

Bass Reeves

https://www.boards.ie/discussion/comment/118135222#Comment_118135222

No it is not taking nearly 8% out of you income unless you are earning up on a million euro

At 100k it takes less than 5%

At 200k it takes 6.4%

At 500k it takes 7.4%

Tell me how any government should replace it

Wealthy people hate it as any time you try to extract wealth from something in the form of dividends, income or even pensions ( income over 60k/ year) it kicked in.

cnocbui

https://www.boards.ie/discussion/comment/118135390#Comment_118135390

Winter, and we are heading into xmas, big surprise. Timing housing is silly, IMO. If you want or need accommodation and can afford it, buy it. I have bought 3 houses, and not once was what the market doing a consideration, other than in terms of lack of availability.

javaboy

https://www.boards.ie/discussion/comment/118135413#Comment_118135413

Sorry, meant to say ~7%. My point still stands: it's a punitive tax rate for higher earners.

JimmyVik

https://www.boards.ie/discussion/comment/118135413#Comment_118135413

Speaking just for myself it takes 8% of any overtime or extra income that I earn.

Amadan Dubh

https://www.boards.ie/discussion/comment/118133820#Comment_118133820

It's progressive for sure, but that is only looking at how it is applied. It ignores the "why" it was applied and also fails to put it in a proper context. For example, why not remove tax exemptions for institutional investors in property as demand is so frothy we're told; meaning that they should pay a tax for the privilege of trading in a market where there is so much demand? Why not look at how €4bn can be saved in public spending when seeing how public funds are wasted?

At a certain point, those who depend on their wages for their living won't be able to live on those wages alone as we are not seeing wages soar along with the cost of living (in particular housing), which has done and will continue to create an extra burden on public funds. This then perpetuates the problem of trying to reform and cut something like USC as it is claimed that the billions need to be made up elsewhere. I do not accept the mentality that public funds are wasted everywhere but I fear this is a collective problem with Irish people, to not have enough self-confidence and respect to expect better bang for their buck - it is why I see the country in real danger of squandering our time in the global spotlight, with our country being seen very much as a liberal, politically stable, open-for-business society - by not seeking to make the economy and all its parts (including the housing market) more sustainable for future expansion and growth this is under threat. I mean, based on incredibly low unemployment rates and phenomenal GDP the last few years, we are still looking at SF getting in to power as an anti-establishment two-fingered gesture - it's not right.

Bass Reeves

https://www.boards.ie/discussion/comment/118135648#Comment_118135648

And it is ment to be that is what progressive taxation is for. If you pay 7% your income is in the 3-400k bracket. People on incomes of over 100k can use pension contributions and other reliefs to shelter income more than lower paid workers. The whole point of USC is to rebalance this effect.

The point I make is a lot of lower paid people in the 30-60k bracket are anti USC without know the reality of it. I have heard union representatives on about it and they do not realize what the are looking for.

Any other tax that replaces it will have more impact on the lower paid

javaboy

https://www.boards.ie/discussion/comment/118135761#Comment_118135761

Totally agree. And I'm generally in favour of a progressive tax system but there's ideology on one hand... and there's my pocket on the other. A balance needs to be struck between progressiveness vs encouraging emigration to countries with lower marginal tax rates.

I'm well aware that the tax would have to be replaced from somewhere but with a possible populist government on the horizon, hiking the 8% rate is an easy target that won't cost too many votes. I guess what I'm saying is I'm ok paying progressive taxes but not too comfortable with how easy the USC mechanism makes it to make the tax system progressively more progressive 😄

Bass Reeves

https://www.boards.ie/discussion/comment/118135953#Comment_118135953

I agree with you when you go beyond an effective marginal rate of 50%(we are at 52%) you are in danger of encouraging migration to more favourable regimes. Higher rates so discourage the wealthy from access money they may have to pay tax on out of company accounts so it's a lose, lose for any government but left wing idealogy fails to allow for that.

Bass Reeves

https://www.boards.ie/discussion/comment/118135742#Comment_118135742

Government encouraged institutional investors into the housing system mostly egged on by the more left wing/ socially inclusive lobby. I pointed out here and many did elsewhere that this was not necessarily a Panacea to save the crisis.

Now you want the government to renege on what it encouraged. I totally disagree with what we did but I am not stupid enough to think we can welsh on committment given to institutional investors because next time we want them they will say ''look Ireland f@@ked us over we will not be caught again''

Trying to save 4 billion out of our budget would be virtually impossible. I am awaiting the arrival of SF with bated breath and I wonder how long a left wing government made up of SF, social democrat's PBP etc will last. No matter how far left they go it will not be enough for Richard Boyad Barrett, Paul Murphy and Ruth Coppinger

reubenreuben

https://www.boards.ie/discussion/comment/118135677#Comment_118135677

and me. so much tax goes to this government, What they doing with it?

JimmyVik

https://www.boards.ie/discussion/comment/118136290#Comment_118136290

They are using it to bid against young people who want to buy houses. Keeping them in the rent trap and raking in half of their rent in tax via the landlord.

cnocbui

https://www.boards.ie/discussion/comment/118136290#Comment_118136290

Giving the civil service a pay rise, of course. They are already one of the highest paid civil services on the planet. Meanwhile there have been patients piled on trolleys at Limerick regional for the last 20 years, at least. I have just paid for a package to be shipped from japan 3 times. It was twice returned to Japan by Anpost. So Irish government deemed taxes and on costs have amounted to 50% - which of course were not knowable at the time of purchase, which was made over 3 months ago.

The $64 dollar question is; will I still be semi-sane by the time I eventually mange to get the hell out of this hole of a dysfunctional country? Property sale agreed in Jan, unlikely to complete until mid Dec. My son's application for foreign birth registration took 23 months to process. It took 2 years and €5K to sort out an executorship and get a grant of probate.

IamMe33

https://www.boards.ie/discussion/comment/118136413#Comment_118136413

It's a sick joke what this inept government implement for their policy - using taxpayers' money to bid against them driving up the price of housing, which necessitates a greater tax take on the same people to propigate this farcical feedback loop.

Someone I know was lamenting to me yesterday about this perverse situation and mentioned his sister was outbid by the council in Galway. She went €10k over her mx budget to try to snare the house but the council just bid €15k over straightaway so she had to bow out.

What surprised me is that he said she is a first time buyer starting out to trying to find a place to live. I was under the impression that the councils were not meant to bid against FTBs.

Have I got this wrong? I thought FTBs trying to house themselves saved the council having to provide housing therefore the councils aren't supposed to get in the way.

What's the point in even trying if the government are working against citizens trying not to be a burden?

Nevermind saving for a house as a young person on a working class wage and putting off starting a family until you're in a finacial postition in your mid-to-late 30s. More sensible now to not work, start having your kids early and the goverment will shove the working fools out of the way to set you up.

PommieBast

https://www.boards.ie/discussion/comment/118136194#Comment_118136194

In my case Ireland's confiscatory personal taxation was the straw that broke the camel's back. I seriously wonder how many jobs have actually left Ireland because the workers in question went overseas and refused to come back.

Bass Reeves

https://www.boards.ie/discussion/comment/118137918#Comment_118137918

It hard to know seeing as how we has virtually full employment before COVID

L1011

https://www.boards.ie/discussion/comment/118137918#Comment_118137918

Where have you gone that you haven't swapped personal taxation for indirect taxation (e.g. the utopias people mention with lower income tax rates without mentioning 3k+ a year property taxes)?

javaboy

https://www.boards.ie/discussion/comment/118139003#Comment_118139003

You can pay somewhere around 10% less in income tax in California, not to mention much more favourable CGT treatment. It puts a few extra thousand in indirect taxes into perspective.

L1011

https://www.boards.ie/discussion/comment/118140000#Comment_118140000

And pay thousands for health insurance to cover even the most basic treatment / ambulance trips.

The total taxation take here is not that high by international standards. Most places where its higher have significantly superior services, but go any worthwhile amount lower and you start losing essential services. Or human rights if you go to the Middle East.

Bass Reeves

https://www.boards.ie/discussion/comment/118140072#Comment_118140072

The big one is education costs in the US and Australia at present. In the US college fees start at 20-30k/year and move to 100k/year at what are not very prestigious colleges. 2nd level on in Australia has to be paid for if you want a decent school in cities. The UK is moving that way with its college loan scheme.

All of that is before you fork out for accomodation and that is not cheap in the US or Australia either.

fliball123

https://www.boards.ie/discussion/comment/118140072#Comment_118140072

depends on how much you earn those earning more pay a lot more and those who earn less pay a lot less the problem with this country is bang for your buck, services are poor and we do pay an lot for a very poor return and instead of trying to stamp out waste every government just want to up taxes. Throwing money at it has not solved it at what point do we say throwing good money after bad? There needs to be a complete rethink of our public sector/services and our welfare system before more taxes are asked for.

javaboy

https://www.boards.ie/discussion/comment/118140072#Comment_118140072

Yes, and pay thousands for health insurance. That's just one more thing to be factored into the calculations. Between higher wages, lower taxation, and employer subsidised health insurance, it can work out much better financially. Obviously it depends on each person/family's situation. I know plenty of people who have made this exact change.

PommieBast

https://www.boards.ie/discussion/comment/118139003#Comment_118139003

The £2,000 I now pay in London council tax is more than offset by the €7,000 I am no longer paying in Irish payroll taxes. The £12,300 CGT allowance is also a lot higher than the Irish €1,270, and VAT (20% vs 23%) is lower.

But at the end of the day higher taxes was the last straw. Dublin's dysfunctional property market was the big factor.

L1011

https://www.boards.ie/discussion/comment/118140432#Comment_118140432

London's property market is no better - I'd argue worse as we only a few high end apartments sitting empty compared to the volume in London.

And the much higher NI contributions versus PRSI cancel much of the PAYE savings.

PommieBast

https://www.boards.ie/discussion/comment/118140453#Comment_118140453

From first viewing to keys in hand it took me 8 weeks to buy somewhere in London. It has its faults but based on my personal experience of both in the last 2 years I would pick the London property market over Dublin's any day.

L1011

Conveyancing is faster in the UK, because the process is not as tied up in ridiculous legal structures (you can even self conveyance if you wish; which is not allowable here). That's the only real advantage - it doesn't make their property market less insane than ours.

Amadan Dubh

I have to say that the Dublin Inquirer is a decent publication for some property related news. I subscribed recently for €8 per month and they post a monthly magazine out to me with their top stories for that month as part of that. No one comes out of this looking well, neither Owen Keegan and DCC managers nor the Dublin city councilors. If anything, the outrage from the councilors was likely because they had not been given a chance to object to any residential zoning as is typical for the Dublin city councilors.

https://dublininquirer.com/2021/11/03/council-management-added-more-than-200-rezonings-to-draft-plan-for-city-without-telling-councillors

On the property price register, what does “Not Full Market Price” mean?

The council have bought a 3 bed semi a few doors up from me. I know this as the council put up a link on their Facebook page to a list of properties available on their Choice Based Lettings Scheme.

This house never went on the open market. I do know that originally this house and the semi d attached to it were owned by the same person. I don’t know if the same person have owned both up until the sale. The attached property is long term rented. Whether that’s private or on a long term rent to the council, I don’t know.

I’m assuming that the sellers approached the council directly but why isn’t the full selling price listed? Could the other property be still in a leasing contract with the council and the council are purchasing it once that’s up?

iColdFusion

For everyone on about the government and taxation the Commission on Taxation and Welfare have created a questionnaire portal for people to give their feedback on a range of taxation topics, there is a bit of time in filling it all out that might have been a total waste of my time but complaining on Boards isn't going to have any effect at all so its worth a shot!

https://cotw.citizenspace.com/secretariat/yourvision/consultation/

L1011

That the sale isn't of the entire property. Most common case is siblings being bought out of an inheritance or a divorce situation

https://www.boards.ie/discussion/comment/118144766#Comment_118144766

But I know that it’s the council who have purchased it so can’t be those reasons in this instance.

Amadan Dubh

Unsurprising that asking rents are still rocketing when supply is at its lowest since 2006 when Daft began its reporting. Once pandemic restrictions end, I think the economic fallout from the pandemic will be significant - if cost of living (including housing costs) continue to soar, those pandemic savings are going to be depleted fairly quickly and people will start to cut their consumption. It's anyone's guess how bad things will get.

https://www.irishtimes.com/business/economy/rent-inflation-surges-to-6-8-amid-unprecedented-shortage-of-homes-1.4724045

SmokyMo

At what point do we see civil disobedience and riots?

Amadan Dubh

I don't think we'll see riots but we have already seen the frustration on display in protests related to housing/squatting , the Cobblestone and Merchant's Arch marches - we're more likely to see people react at the ballots by voting "anyone but FF/FG" and any argument against this approach which tries to claim that an alternative is not the solution will be met with "it can't get any worse". The DBS by-election was an indication of what is to come; FF worst ever by-election performance and FG with zero TD in what many would describe as their "home" constituency.

The housing crisis is an emergency on par with covid to get housing available ASAP - this cannot be understated - we are at such low levels of rentals despite many workers still being remote that there is a very real risk our country cannot even support much more economic growth and company expansion. It's also a ticking timebomb for the social consequences which follows from a generation of adult babies living at home well into their 20s.

selassie

Remote work has really highlighted the lack of rental accom outside of Dublin.

If it keeps getting worse we might see rural TDs demanding dubs stay away and start campaigning to cancel the NBP rollout to disincentivize them relocating.😄

growleaves

We were one of the only countries to halt construction during our extended lockdowns, a superfluous strategy with no way to prove or disprove that it 'saved lives dammit'.

The reverberations from that supply shock will be felt for years to come. Well done everyone.