Vacant property tax coming

No wonder, when 1) they can get overinflated rates on Airbnb, 2) there are no penalties for leaving a house empty, 3) everyone bandies about scare stories and says incorrectly that landlords are taxed at 50%.

And to be fair, some people don't know how to put something up for rent, are scared of the paperwork, or mean to get around to it someday but can't really be bothered.

You seem a little confused.

You seem to be thinking that someone with a property to rent out is on the lower or no tax rate.

Here is a more real example. I would imagine most landlords are already in the high tax bracket.

Someone (single) is earning 50k from his job (because lets face it you would want to have a decent job to afford to be having a second property now).

He has a an apartment that he rents out.

He makes €5k profit on it. How much does he pay out of that 5k in tax?

He puts up the rent by €10 per month. So now he is making €5120 profit. How much of that €5120 is he paying in tax?

I’m a LL and I’m paying 52% tax on my one house that I rent out.

Or should I say, my tenants are paying the State 52% tax on the rent they give me.

And yes of course I have another income.

I’ve never heard of banks giving people with no income a mortgage to buy a property whether it’s for their own home or their rental property. You need a job to qualify for a mortgage.

So unless the LL’s you’re talking about have purchased their property in cash, they’ve got another source of income and are taxed at 50+. %

With regard to Airbnb being cash in hand?

I don’t do Airbnb myself, but I know a few that do, and the hosting site hands over each of their details to the revenue commissioners. So there’s no cash in hand for them. Unless you know some other way that can happen? If you do, please let me know and I’ll pass on your advice. Lol.

its basically saying, all these people with low-skilled jobs are scum.

anyone who rents out a property MUST be in the higher tax bracket.

You know all those objections to build-to-rent developments because "Oh, the developers will just leave them vacant if they can't get the extortionate rents they want from them..."? That's the sort of thing this legislation is intended to address; speculators who build (or buy) and hold multiple residential properties while leaving them vacant for long periods of time hoping for prices or rents to rise. No, they're not going to tax you on an hourly basis for your home being "vacant" while you're out at work or doing the shopping, and they'll likely have exemptions for things like holiday homes (which are zoned as such, anyway) or houses that are temporarily unoccupied for certain reasons like the owner being in hospital or nursing care or on an overseas assignment for their employer or whatnot. This is targeting developers, REITs, and other big property owners and discouraging them from long-term hoarding of vacant residential units.

Capital gains tax only applies when you dispose of an asset.

Capital acquisition tax, when you inherit / are gifted an asset.

Neither is applicable to a couple simply separating, each living in their own property.

As for income tax, they may find they’re better off in the long run, God knows what tax penalties the government may knit up next.

There are lots of skinflints out there who'd rather set their money on fire than let the state claim tax on it.

Look at the anecdote above about the guy who has a vacant apartment but is planning on bending over backwards and complicating his life to avoid tax on it rather than just sell it on and invest the money. Or rent it out and let it make even more money for him.

dont be silly banks wont have to pay this tax....pfft...

The cash-in-hand landlords referred to long-term rentals. I was pointing out that landlords who had not been paying tax and then switched to Aibnb had obviously not been forced out of the market by high tax rates. If you are paying 52% you should welcome a vacant house tax that would incentivise those who are not playing by the rules to declare that they are letting their property and therefore pay tax.

Yes, I'm being pedantic, but it is important that people understand that rental income is taxed as income - subject to the same tax brackets and credits, and with certain allowed expenses - because many people honestly do not know that. Outside of boards, there are many people earning less than 36k and the RTB small landlords' report for July 2021 says that 24% of landlords either bought their rental property outright (15%) or inherited it (9%). So yes, there are landlords who aren't paying 50% tax, but whatever mixture fits their own income. People complaining that it is a unique punitive rental tax and is the main reason it is not worth letting their house (that is not referring to you, but to other comments across many threads) need to look at Revenue's site. A vacant house tax wouldn't effect any landlord, because the property isn't vacant, but might be the needed incentive for someone with a spare house who is considering letting. And of course, anyone who doesn't want to let can just pay the vacant house tax.

With regard to illegal landlords renting cash in hand, there’s legislation in place, I believe a 4K fine and / or 6 months prison sentence for unregistered LLs and properties.

And they should be brought to justice. If they’re opting to go Airbnb well then they’re paying tax because the hosting site discloses all their information to the revenue commissioners.

As for *registered small LLs opting for Airbnb over *legitimate long term rental, I can see the attraction, far less risk of a non paying tenant that you can’t have removed for two years. And as far as I know there’s legal recourse for destructive guests. Even those two safeguards alone make a big difference.

You've implied a couple of times that income earned from renting is the same as income earned from other employment.

While it is taxed the same, there are differences between the two.

Notably, when you earn your income from your employer, you’re personally not risking an asset worth hundreds of thousands of euros to earn it.

If a customer doesn’t pay, you are not legally obligated to continue to supply your service for up to two years for free.

If a customer smashes up your employer’s property, your employer will have legal recourse unlike a small landlord that more often than not has to watch non paying and / or destructive tenants walk away Scott free.

A small LL is expected to act as a business but be taxed as a PAYE worker and have none of the protections other businesses enjoy.

You make reference to people inheriting their rental property and other people buying their property outright. Clearly the latter has another source of income or else they wouldn’t have had the money to buy their property outright. And even the people who inherited their property. If they had no source of income and inherited a house, chances are they’d be living in it and wouldn’t have a second property to rent out. The fact they’re renting out the inherited property, indicates to me, they’ve got another property they’re living in. So how did they acquire that property without an income? They wouldn’t have got a mortgage on their other property without another source of income.

As for your claim I should “welcome” a vacant tax to incentivise people to rent out their property?

The opposite applies, having been a LL for just four years, I can clearly see the reasons why a person would opt to leave their property stand vacant rather than play roulette with their property renting it out

In fact, I’m going to be joining the thousands of small LLs leaving the market as soon as my current tenants leave. I will not be renting my house out again.

I won’t be selling it, and I won’t be leaving it vacant either. I just won’t ever rent it out again. It’s not worth the risk.

Not everyone with a second home uses it as a business.

How can you simultaneously be renting your property and have it vacant? Either you're a landlord with tenants or you are not, it's binary. And nobody is forcing someone to rent their property, society is encouraging owners of vacant properties to support society by renting/selling them, or contribute a small amount. Fantastic idea.

Why should anyone be forced to rent or sell a property they have paid for? To be rented out to people you've no idea who they are, if they'll pay, how much damage they'll do to the property? And if you wanted to use your property at a later date for a family member, a property you own, you cannot get these people out.

Nobody is forcing you to sell or rent. You are being encouraged to do something with a valuable asset which you are not using and which would benefit others in society. And remember, you can exchange the asset and invest the proceeds elsewhere. It's a no-lose situation for those with vacant properties.

The fringe cases you mention don't tip the balance.

To exchange the asstets, one has to pay more taxes, on property that has been fully paid, round and round we go.

Adding taxes won't change the availability of property, not the amount that's needed. In fact, it'll be only the wealthy and investors that will be able to purchase vacant buildings due to the upgrades needed to make properties habitable.

I’m with the ”Skinflints” who are not lying down to get screwed over yet again for tax on a property they’ve already paid their taxes on when they purchased it, taxes on it just to own it, disproportionate taxes on it to rent it out (in comparison to all other businesses) and when they snuff it, their kids are then going to have to pay taxes on to inherit, and then take up where the “skinflint” left off and continue to pay tax on it while it’s in their possession. And on and on it goes..

Fair play to the “skinflints” they’ve got my vote!

Just build social housing on state and council owned land

Tell me this is a joke..

If I choose to buy a house with 3/4 bedrooms for my future family needs, (instead of being a burden on the state by needing state supplied housing), you think because I have no immediate need for it that I should pay tax on my spare rooms? Wow...

Definitely the RTB needs improved, but there also needs to be a vacant house tax.

There is a blight of vacant houses outside of Dublin that is adding to the problem of over-centralisation and the lack of housing in Dublin. Here is a common scenario:

Guy used to work in trades in Dublin or London, bought a piece of family land in cash at family rates, did a self-build over several years and the left the job and became a handyman or farmer. Then he inherits one or more properties and holds on to them for 10+ years in case his hypothetical children might someday use them. Inherited properties become dampridden and need major repairs- an absolute waste.

Sale prices in the area are inflated out of the reach of locals by holiday buyers and young people with jobs leave for Dublin because they can't get anywhere to rent and are sick of living with their parents. Or they head off to Dubai and come back to cash purchase over-inflated houses. Between holiday homes and vacant properties, about a quarter of houses are empty. When families try to move home, they are shocked that they can't find anything 'but there are so many empty houses!' Local businesses can't hire staff because applicants can't find a place to live. Since people with vacant houses are comfortable and the current charges aren't onerous, they aren't in any hurry to lower prices to sell them. Some houses have been on the market for 5+ years! This is really messed up.

We, the taxpayer, are subsidising this too, because this sort of market forces more people to seek social housing.

Some of the people with vacant houses don't even realise that there is a strong demand for rental house even in rural areas and neither do the politicians. The local estate agent said that if he had 10 rental properties, they would be gone tomorrow. He has none right now. Information needs to be part of the approach too and not scare stories about 50% tax, when you can see in the example above that it probably doesn't apply.

This vacant house tax is the only thing I see addressing a the issues. Does anyone who disagrees with it actually have a better solution?

Why don't you then?

When the market tanks, these will be the first to drop.

So its going to cost more than 60k so.