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

Is this because you think labour shortages will cause continued wage pressure or some other factor?

There should be some kind of windfall tax on land that gets rezoned. The tax should be on the difference in value before and after rezoning. Now 80% sounds like a bit too much, but it should be reasonably high. Similar with increase in values due to new public infrastructure (Luas, metro etc.) being built.

By the 80's the general criteria was 3X one salary and 1X the second salary. While in theory it might have seemed easier unemployment was 15-20% most of the time. Emigration was rampant about 15-20%of my school class emigrated, I had relations where in one family 4 sibling emigrated and never returned except on holidays.

Labour was cheap. Trades people were directly employed by builders and paid below the average industrial wage. Tradespeople often took jobs as postmen, P&T( Telecom Eireann) or similar general operatives in state bodies as pay and conditions were better because there was so many of them.

A house build in the eighties was F rated on present building regulations and bears little resemblance to those house at present. House were much more basic than at present

People need to under stand the difference. H&S on build sites was non existent, 29-30 building workers lost there life every year and many more would have been seriously injured.

There was very little building regulations, the first attempt was Homebond in 1978. A lot of houses were build by cash payments, this was especially rampant in house refurbishment. There would have been little or no certification compared to at present.

When I subcontracted my house in 1991 I got the house build in six months. I was getting foundation dug before the final grant of planning was granted. The engineer certifying for the bank payments made 4 visits to the house during the construction phase. He cost about 0.5% of the total house build cost ( nowadays it 2%+ for direct build). I did not take out any insurance ( virtually nobody did). The house design and planning ist 0.5% as well again this is about 2% now for direct build. There was no LA levies. I could get credit from a building supplier.

There was a dodge going on at the time( I was unaware of it until after was I disgusted) you get a builders to order your materials and you could pay him the cash for the material and he would not charge you vat.

Trades people in general were paid cash it was up to them to decide if they wanted to declare it.

The whole upside of this was it was harder for builders to charge astronomical margins on houses and probably with the exception of Dublin it kept a lid on house building costs

People always want to take what others have for themselves.

When did Ireland become a place where the national pastime is to figure out how we can take tax people more.

It seems every time anyone is doing well there are calls for a tax from many people.

If the value of your home benefits from a government decision, say to build a metro line, or a school nearby, would you agree to an 80% tax on the profit from its sale? Of course not.

Look, saying a tax of 80% should apply to rezoned land is bone headed. All that will happen is the owners will sit on their land rather than give away 80% of its value. If you want to incentivise development/sales, you make it more appealing to sell/develop it, not less so.

Home value tax is unworkable because its impossible to quantify the impact of something like that.

The impact of an undeveloped piece of land being rezoned is very measurable. It is very easy to assess a plot of agricultural land of a given size, and deduce what it would sell for were it not rezoned, then tax the difference.

If your land is rezoned, why would you sit on it? If you are a land speculator (many are) your plans of making a mint by hoarding the land until rezoning have been dashed, now you might aswell sell as holding is not worth it anymore. There is nothing more to earn from waiting so land will get turned over quicker.

Eventually land speculators will mostly be flushed out of the market. Which is a good thing.

I assume in this scenario (proposal is linked to Kenny report), the tax is payable immediately, not when the land is sold? So ‘sitting on it’ won’t be possible, it’ll have to be sold to cover the tax bill.

It’s essentially a slightly more generous version of a CPO. Land identified to be in the public interest for development, must be developed. Instead of just taking it at agri value, the landowner is allowed to keep 20% of the profit generated.

Seems fair to me.

Well. Because he owns the land and if you want to buy it off him then pay him what its worth. No need for a tax. The buyer still pays the same money for the site.

The market decides what the land is worth.

Currently we have a situation where greenfield development land is not sold to someone who would develop it because owner wants to sit and hold for a sky high offer.

This tax means its not nearly as profitable to sit on land for years waiting for it to appreciate in value, because any profit would be taxed very punitively. So instead owner may just sell up when they can and take what they can get.

Wait til they rezone a bedroom of your house and then force you to sell it with an 80% tax on it. :)

Gotta love this taking stuff off people and even if they dont want to sell it forcing them to sell.

Don’t think a constitutional challenge would stand up as there is already a precedent of farm land being taken over for the likes of motorways etc. and no-one is forcing the landowner to sell.

As for under an under the counter payment it would be difficult to do in this day and age without a paper trail…it’s not 10k in cash. Both the farmer and developer risk fraud, money laundering and tax evasion which should be treated the same as robbing a bank with jail time as in most countries but we all know in Ireland it would be a slap on the wrist because it would leave the door open for politicians to be prosecuted. But that’s going off topic

Firstly, and this one is fairly obvious, there is a big difference between 50% and 80%. Secondly, @Timing belt thinks the tax needs to be paid when the land gets rezoned, regardless of whether the landowner decides to sell, no politician, and I mean not one, is going to tell a farmer who has no intention of selling land for development, who may have owned and farmed that land for a generation, that they are going to have to pay 80% of the value of the zoned land in tax just because the council decided it can be used for residential or commercial development.

This is knucklehead stuff.

Fair enough! I think if it was well explained to the public, it would be almost universally supported except for a tiny number large land owners.

Why should we make multi multi millionaires out of random land owners using tax payer money (to fund the services which drive the value) and first time buyers (who have to pay the land costs)? All for doing precisely zilch.

Looks like we’ll soon have a 57% marginal income tax rate for getting up and working hard. So 80% tax on doing nothing at all seems generous to me.

You’re not financially crippling them….if the land is needed for housing it gets rezoned it’s no different to farmland being CPO’d for a motorway. Farmer is still walking away with substantially more than the agricultural value of the land. As for politicians if they don’t take action to solve the housing crisis that impacts large numbers of people over a few landowners then they won’t be in power come the next election and they know it.

You cannot levy a tax on the increase in value of land if the increase is not actually realised - ie. the land hasnt been sold yet.

I think that is the sticking point here - increase in land value after rezoning is only realised once sold. The profit should absolutely be highly taxed however.

This leads to much more efficient land use like all over Europe.