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

German system as described sounds logical, ensures buyers put some thought into a purchase and would help prevent a situation in the celtic tiger where young couples became trapped in tiny 1/2 bed apartments not fit for families

Of course our systems don't do learning from past mistakes, we specialise in new ways to make the same mistakes

Ps families don't arrive in 3 month intervals

Nice one, the figures are from Q4 of 2020. I am sure prices have come up a good bit since then.

My dad got cancer so we moved back during the pandemic to be close to him. But yes you're right, I should have stayed in Germany because I find merit in a sensible tax law targeted at aiding in the prevention of spiralling home price inflation in an environment of high demand and low supply, and see the potential of a similar application in combatting the same in Ireland. Such are truly the important things in life.

You know, avoiding things like this:

Akin to kicking those behind you on the ladder in the head and pulling up said ladder.

The problem is the current system encourages such sociopathic behaviour. It is possible to have more sophisticated tax laws beyond "Is PPR, no tax".

To be clear, in the follow scenario:

I am a single man. I buy a house. Within 3 months I decide to exploit desperate people in a distressing housing situation and list the house 25% over what I paid 3 months previously. I make no changes to the house and use the same images from the previous listing in my new listing. I sell the house for over asking. I pocket 100k+ tax free.

In your view there is a) nothing ethically questionable about this, b) this practice should be protected by law and c) see no way that this kind of behaviour could be detrimental to our society.

In my view there should be a mechanism whereby revenue could come knocking on the door asking questions in such a scenario.

If you 'flip' your PPP, where are you going to live then? You either use the equity to buy a new place, which will hammer you in transaction costs and commissions and cost similar to what you sold for, or you 'pocket' the profit and join the rental market. The 100k might get you a similar rental house for 3 years or so, but what do you do then? I can't see this process driving up house prices, it doesn't make any sense.

Look, I know that the Irish ideology on housing is bound up in the idea that one's PPR should be this magical untaxable asset that will always appreciate. We don't invest, but rather see our house as our long term investment by and large.

The problem is, the whole concept of the properly ladder is predicated on, and encourages screwing those that come after. There is very little benefit to anyone in a property bubble, besides to those who get warm and fuzzy thinking about a completely illiquid and unproductive asset appreciating in value. If you realise those gains you still need somewhere to live so are still victim to the bubble. Those at the bottom coming in, however, are severely disadvantaged to the point of being disenfranchised.

Basic human needs should be protected against runaway market forces, especially when the lack of those needs threatens to destabilise society. And that truly is what we are facing into if the current crisis is not dealt with. It needs a radical rethink.

Any measures targeted at mitigating that risk should be considered.

The fact that a PPR is not subject to CGT is testament to the fact that the property "market" is no standard market. Any other commodity that is traded at a profit is liable to be taxed, so there is clearly a special status afforded to a house.

The more concerning factor is how the price and rent increases have spread across the country. There now is no escape and for those that have, commuting costs will be a big issue

Ah the classic retort. Anyone that looks at the status quo and sees it isn't working for increasing numbers of people is a "begrudger".

Here's the thing. I'm actually in an incredibly privileged position and can afford to wait and save a considerable amount of money before I buy. I go viewing houses every weekend with no pressure. I'm not going to be evicted and I'm not paying crippling rents. But I see people at the viewings and I can see how much this whole thing is taking its toll. The couples with new borns desperate to get somewhere. The foreign folk with no support structures in the country working out how they'll make an overpriced run down kip with original 50s wiring livable. Negotiating with each other how they'll make it work at the absolute edge of their affordability.

It's bleak out there, but I'm alright, Jack.

I dont think you read my post, the whole point is that everyone needs a place to live. If you have that and sell another investment property, then sure it's 100k profit. If it's your PPR and you sell it you make 100k but you then need to secure a new house which will eat up all that profit plus additional transaction costs, this is precisely why there is no cgt on your PPR

https://www.ft.com/content/e1a9600a-45ab-4423-b7cf-9b1c3de4837f interesting opinion piece in the FT yesterday from a UK perspective (behind paywall). Some similar arguments to what we hear on this thread. Interesting winter ahead.

Still, pricing seems strong in the market based on these prices in Straffan

https://www.daft.ie/new-home-for-sale/semi-detached-house-2-3-4-5-bedroom-homes-lumann-lumann-straffan-co-kildare/3947594

Its not necessarily a hard case though. Affordable housing should remain as affordable housing - any onward sales of same should be subject to original sale price + inflation as a cap. If substantial work has been done to the house it can be revalued, but otherwise there should be price caps. Either for a defined period (5-10 years post build) or indefinite.

It would be whatever its legislated for. 10 I think.

Why would there be an exemption if you had to move because of work? Why should you be entitled to get back more than you paid in? The whole point is to stop property speculation, so why should people be entitled to exemptions?

How would indefinitely make it impossible to trade down?

If you dont like the fact you cannot speculate on your property value, then dont buy affordable housing. The fact that people cannot speculate on affordable housing means that when they sell it on, it remains affordable. Replicate these kind of schemes with these rules across the country and house prices as a whole come down.

You could just as easily stipulate that affordable schemes are not for rent. Affordable house schemes should be sold with a lien or encumbrance such that houses cannot be sold above a ceiling price for x number of years. Ceiling price calculated as initial cost + inflation. This stops affordable housing from being a scheme used to enrich investors and speculators.

Your poor example of someone having to move house due to work is what you would call, a hard case which makes bad law.

I wish that I could give this two likes.

Most of the deposits end up in the central bank and get a return of 0%…