Budget 2009 & Affordable Housing

foxy06

How has the Budget affected the affordable housing scheme?

unklerosco

Well... this is what i found in relation to housing in general

# First-time buyers tax relief up from 20% to 25% in years 1 and 2

# First-time buyers tax relief for years 3, 4, and 5 to rise to 22.5%

# €5 million for warmer homes scheme

# €1.65 billion to be spent to housing programmes in 2009

# Government to take an equity share in affordable housing

The_Conductor

Government taking an equity stake in affordable housing is new- and will actively discourage people from availing of the scheme.

€1.65 billion to be spent to housing programmes in 2009- how does this compare to 2008 (and previous years)? Is there any indication that its actually anything other than an extension of pre-existing schemes (aka the local authority mortgage scheme which is being used as a template for the new mortgages?)

€5 million for warmer homes scheme- in light of the new rules about insulation which all houses (incl. second hand ones) will have to comply with from Jan 1, this is a drop in the bottom of an ocean and a wholly worthless gesture.

# First-time buyers tax relief up from 20% to 25% in years 1 and 2
# First-time buyers tax relief for years 3, 4, and 5 to rise to 22.5%

Estate agents are going to be in tears over this- they were expecting the earth, the sun, the moon and the stars in the budget. They are not going to be one little bit happy....... The story being sold to sellers was that everything would get better after the budget- but nothing whatsoever has changed. If anything ruling out second hand houses from the new mortgage scheme will swing another axe at their prices.........

S.

connundrum

What happened to the rumour of a 'council loan' being available?

There was a figure of €280k (odd) bandied about, where a 1st time buyer would get a loan from their local council, at a fixed rate.

Did that not happen? Or is that actually the affordable/shared ownership scheme in disguise?

Daith

connundrum wrote: »

What happened to the rumour of a 'council loan' being available?

There was a figure of €280k (odd) bandied about, where a 1st time buyer would get a loan from their local council, at a fixed rate.

Did that not happen? Or is that actually the affordable/shared ownership scheme in disguise?

Oh apparently Local Authorities can give a loan up to €280,000. Was about €180,000 if I recall. I believe this is only for new houses but can't confirm.

Which is ridiculous. What next? Car loans?

punchestown

http://www.homechoiceloan.ie/

I give you the website detailing the bailout to the builders. How can
such a well developed & constructed website be rolled out within a
short few hours of the announcement of the builders bailout in the
budget? It is obvious that Tom Parlon and his cronies in Government
had this bailout agreed well in advance of todays budget. I was at
least cheered somewhat by the section enclosed which I assumed was for
comedic effect.

Who can apply?

To qualify for a Home Choice Loan applicants must:

be a first time buyer (some exceptions may apply);
earn more than €40,000
be in permanent employment for two years; If self-employed be able to
submit two years certified accounts;
have proof of being unsuccessful in securing a sufficient mortgage
from a bank or building society to buy a home

How can they possibly look to approve people who have been refused by
a bank or a building society? The only people not approved for a
mortgage in the last 3 years were those on unemployment benefit. 7
times the salary of a person on an above average income is glorified
sub-prime. Whatever about the many poor thousands of young people
caught up in negative equity from the madness of the last five years,
surely help save thousands more from its clutches?

The above website was registered on September 11th 2008. More
proof if proof was needed that this bailout was agreed months in
advance of the budget.

Supercell

Expect to see entry level second hand homes fall sharply in price as the government goes subprime to give loans to people who should know better for overpriced new properties.

This 1.65 billion being bandied around for the sub prime loans is bollix too.

It will be however much €€€ it takes until the builders have cleared their backlog of shoeboxes to the last gullible fool willing to buy a new overpriced shoebox (which will depreciate in value faster than a new car as you drive out of the forecourt) thats been sitting there unsellable since mid 2006.

Senna

Just goes to show you who FF are working for, and its not the average citizen, its the developers, lead by that F**king W*anker Tom Parlon.

Dont buy into any of the bull****, this scheme has been approved by the government for months, long before the current banking collapse. When house prices were gradually lowering and the market was on the right path, just as Brian Lenihen was saying that the market had to correct itself and the government would not intervene, that's when this scheme was conceived.
Shower of lying FF bastards.

unklerosco

Id like to see it just being new houses you can buy.. No Apts.. Oh, wait... there are no new houses. I feel sorry for anyone that goes for this...

I can't get a mortgage, tried before.. Back then myself n the GF where earning around €70-80,000 n had €20k saved... I'd a bad credit history from when I was 20 and thats what stopped us.. Rented for the last two years instead and am now living with the folks saving to buy in about a year n a half/two years time(credit history will be clear)... I'd like to thank the banks that didn't give me a mortgage, best luck i've ever had...

Duckjob

Senna wrote: »

Just goes to show you who FF are working for, and its not the average citizen, its the developers, lead by that F**king W*anker Tom Parlon.

"Tom worked in construction, but when he and others falsely inflated the property bubble, he put his hand "Excuse me!", into your pocket, "HEY!" and took, your money "Tanks!"

If FF had a genuine (albeit misplaced) concern to "help" FTBs, this scheme would apply to all properties. The fact that it's only new builds shows it clearly for what it is, a bailout to their developer mates, at the same time when PAYE workers, the sick, the elderly, families with children etc, are all being ridden.

The worst thing is how blatent it is - they can't even be arsed to try obscuring it. Shows the level of respect FF have for your average person.

mrgaa1

what is all the whinging about. New house sales give the government monies. New house sales provide work for thousands of people all over the country. Remove the stock and house prices bottom out and will then steadily increase in price over a period of time. We have to work - no work and if you think this years budget was bad next years will be a whole lot worse. As i've stated many times before people want to own their own property - everybody else does - and the days of living with mammy (with a few exceptional cases) are long gone. As for emmigration - where the f**k to? Out of the frying pan into an even bigger frying pan. If we all think we could have done a better budget take up politics and get yourself Brian Lenihans job. Sitting crying and whinging - none of that over the past ten years. Get up of your arse's and do something about it. Do your job that bit better, if you don't have one get one. Don't complain, don't take sick days beacuse I think I'm entitled to it, do your job with honour and pride. Make your boss want to keep you. If you see something wrong, fix it. Don't have the attitutude of it ain't my problem. If I can see a problem its my problem. Take some pride in ourselves and move on. If we all stop and discuss, cry and whinge where would be? and I don't want to hear any buts, or if they'd done this or that - no government anywhere in the world could have foresaw what happened. We can't change the past but we can certainly change the future. This is our right and our challenge - do you want to fail or succeed?

unklerosco

- no government anywhere in the world could have foresaw what happened.

Me arse... They knew it was comming. Fair enough it came faster than they expected but they knew...

ionapaul

mrgaa1 wrote: »

what is all the whinging about. New house sales give the government monies. New house sales provide work for thousands of people all over the country. Remove the stock and house prices bottom out and will then steadily increase in price over a period of time. We have to work - no work and if you think this years budget was bad next years will be a whole lot worse. As i've stated many times before people want to own their own property - everybody else does - and the days of living with mammy (with a few exceptional cases) are long gone. As for emmigration - where the f**k to? Out of the frying pan into an even bigger frying pan. If we all think we could have done a better budget take up politics and get yourself Brian Lenihans job. Sitting crying and whinging - none of that over the past ten years. Get up of your arse's and do something about it. Do your job that bit better, if you don't have one get one. Don't complain, don't take sick days beacuse I think I'm entitled to it, do your job with honour and pride. Make your boss want to keep you. If you see something wrong, fix it. Don't have the attitutude of it ain't my problem. If I can see a problem its my problem. Take some pride in ourselves and move on. If we all stop and discuss, cry and whinge where would be? and I don't want to hear any buts, or if they'd done this or that - no government anywhere in the world could have foresaw what happened. We can't change the past but we can certainly change the future. This is our right and our challenge - do you want to fail or succeed?

Genuine question: are you a troll? I can't accept you believe that tripe; your post is rediculous...

punchestown

He is a vested interest as he has declared previously.

mrgaa1

is my post rediculous - sorry I mean ridiculous. Yes I have a vested interest - we all do now as we are shareholders in the countrys banks. Yes I have a vested interest because houses need to be sold. Yes I have a vested interested interest in this country of ours. Show me what is wrong with my last post. Show me why we shouldn't fix problems, go to work, make work for the people of this country. Show me. If someone thinks my post is "rediculous" then perhaps this shows the current nature of our country. Get up and get on with it. In fact explain a better way out of the crisis that we are in. And don't harp on about over the past years. The time machine doesn't exist so we deal with the present to build the future. This is why there are achievers and leaders - the rest just follow and talk about things and talk about what I'd do, and his idea is stupid, he didn't do this, he didn't do that. What would you do?

Daith

mrgaa1 wrote: »

Yes I have a vested interest because houses need to be sold.

The house would have been sold anyway (well maybe not the shoeboxes). Overtime the houses would have dropped in price, the FTB would have saved enough to get a deposit and the bank could give them a mortgage that they could afford.

Money Shot

mrgaa1 wrote: »

what is all the whinging about. New house sales give the government monies. New house sales provide work for thousands of people all over the country.

New house sales give the Government money sure - but it will also put the people they are purporting to help in a very precarious situation. I think there are other/better ways the government could make money. Besides, don't they also get money from second hand homes - yes, more as stamp duty applies to them. What they have done isn't even subtle, it's a cynical ruse to try and buy property developers time. Time which will have to eventually run out at some stage - it's prolonging the agony.

In relation to your jobs post - this is only intended to shift new houses that are already built. It will not create or secure jobs. No developer will look at this and say 'I better start building more houses'. I can't see this having any impact on construction jobs in any meaningful way.

Why can't people accept that the bubble is seeping and about to burst.

joe_chicken

mrgaa1 wrote: »

As i've stated many times before people want to own their own property - everybody else does - and the days of living with mammy (with a few exceptional cases) are long gone.

"Oh noes! I have to buy a house that's hugely overinflated in price, and put myself in financial jeopardy cuz the man from the internet tells me I'll have to live with my mammy forever otherwise. Can I has my 100% mortgage now?"

That's the kind of thinking that existed in, and indeed precipitated, a bubble of ever inflating house prices.

And although you may correct people's spelling here, your thinking needs some major correction.

ionapaul

mrgaa1 wrote: »

what is all the whinging about. New house sales give the government monies.

Enabling FTBs to access sub-prime loans to 'free up' government monies by purchasing overpriced property is not a zero-sum game; it has an obvious negative impact on our economy

New house sales provide work for thousands of people all over the country.

Mortgage brokers and EAs??? The measure we are discussing is 'temporary' (in the words of the minister) and clearly designed to shift existing un-sold new property, not stimulate additional construction. The dole queues full of builders, etc will continue to lengthen, this measure is not a panacea.

Remove the stock and house prices bottom out and will then steadily increase in price over a period of time.

The measure is designed (quite clearly, again) to put a floor under new property, until it is sold. Only then will prices truly crash. It is a guaranteed negative equity scheme for those foolish enough to get involved.

We have to work - no work and if you think this years budget was bad next years will be a whole lot worse. As i've stated many times before people want to own their own property - everybody else does - and the days of living with mammy (with a few exceptional cases) are long gone. As for emmigration - where the f**k to? Out of the frying pan into an even bigger frying pan.

Spare us the patriotic rubbish - 'We' should all tighten our belts and live more frugally if 'we' want to get out of the mess. 'We' didn't cause the mess, 'we' didn't exacerbate it via ill-thought out and easily-influenced policies favouring vested interests. You remember the last time a FF leader urged us to tighten our belts for the good of the country?

This situation is akin to that with the bankers - we f*cked up, we were too greedy, but now everyone, all of us have to pay for our mistakes. But we're keeping our mansions, our Rolls-Royces and our money, don't worry!

F*ck that, only the truly ignorant can believe we're making sacrifices for the good of the country.

If we all think we could have done a better budget take up politics and get yourself Brian Lenihans job. Sitting crying and whinging - none of that over the past ten years.

Many of us have been complaining about the situation for years.

Get up of your arse's and do something about it. Do your job that bit better, if you don't have one get one. Don't complain, don't take sick days beacuse I think I'm entitled to it, do your job with honour and pride. Make your boss want to keep you. If you see something wrong, fix it. Don't have the attitutude of it ain't my problem. If I can see a problem its my problem. Take some pride in ourselves and move on. If we all stop and discuss, cry and whinge where would be?

We need to apportion blame and punish those who got us into this mess - don't you agree?

and I don't want to hear any buts, or if they'd done this or that - no government anywhere in the world could have foresaw what happened.

BULLSH*T! A lot of the problems that Ireland in specific faces were highlighted YEARS ago! A former corrupt FF leader told us to contemplate suicide, we were all doom-mongers raining on their parade.

We can't change the past but we can certainly change the future. This is our right and our challenge - do you want to fail or succeed?

How deeply have you inbibed from Brian Lenihan's font of glorious forward-looking patriotic belt-tightening? We can't change our past but we can try to ensure that mistakes are not made on an ongoing basis. This is difficult becuase the powers-that-be in Ireland are in hoc to the developers. We need to keep on banging on about this fact until it is clear to all. We need to clarify what has gone wrong, punish those the blame and start down a new path. None of which is currently on the agenda.

markpb

mrgaa1 wrote: »

As i've stated many times before people want to own their own property - everybody else does - and the days of living with mammy (with a few exceptional cases) are long gone

Ironically enough, the days of living with mammy are (were?) ever more common because people moved back with their parents so they could save for a deposit for their overpriced house hours from where they worked and with no viable public transport.

fragglewhv

Hi ... I am new to this...

Government taking an equity stake in affordable housing? What exactly does this mean?
I found no information more detailed than this.
And when are these changes suppose to come into effect?
Thanks to anyone who can enlighten me

Oafley Jones

fragglewhv wrote: »

Hi ... I am new to this...

Government taking an equity stake in affordable housing? What exactly does this mean?

It basically means that the government has become a sub-prime lender.

fragglewhv wrote: »

I found no information more detailed than this.
And when are these changes suppose to come into effect?
Thanks to anyone who can enlighten me

http://www.budget.gov.ie/

gurramok

mrgaa1 wrote: »

is my post rediculous - sorry I mean ridiculous. Yes I have a vested interest - we all do now as we are shareholders in the countrys banks. Yes I have a vested interest because houses need to be sold. Yes I have a vested interested interest in this country of ours.

You have a vested interest in getting houses/apts sold at extortionate prices to maintain your standard of living as a salesman.(as from your previous posts)

That's a big difference to a buyer or FTB who is usually young and been strapped with that huge debt for the rest of their lives just to put a roof over their heads.

Daith

You know what I find unbelievable? That this scheme for FTB can't be used for Affordable Housing.

The government are offering a loan for people to buy a house off a developer. Yet this local authority loan can't be used to buy a house form the same local authority who are trying to shift these now overpriced houses!

dats_right

fragglewhv wrote: »

Hi ... I am new to this...

Government taking an equity stake in affordable housing? What exactly does this mean?

I would imagine that instead of the current situation where a purchaser of an affordable home owns the property fully but is subject to a clawback, that instead from some point in the near future the Government will own a portion of the home. So a person might own 60% and the Government will own the other 40%, what isn't clear is whether this equity stake is limited in time e.g. 20-30 years or whatever or if it will affect the property indefinitely.

It will be interesting to see how they approach the question of negative equity, under the current AH Schemes purchasers aren't impacted by negative equity (what I mean by this is that if A bought a house valued at €400,000 for €300,000 only when the property falls below €300,000 is the house de facto in negative equity for the purchaser). The new Equity Scheme may well also have an impact on properties going into negative equity, as it is quite possible that any loss will be proportionate to the share owned, which might operate something like this, I buy a house valued at €300,000 for €200,000 and the government take a 1/3 equity, if the house where to fall in value to say €240,000 (i.e. a fall of €60,000) meaning I lose €40,000 and the Government €20,000. I must state however that details of the scheme haven't yet been announced and I am merely speculating as I have no insight into how the new sceme will work, nor do I want to be accused of scaremongering.

Shambo

mrgaa1 wrote: »

is my post rediculous - sorry I mean ridiculous. Yes I have a vested interest - we all do now as we are shareholders in the countrys banks. Yes I have a vested interest because houses need to be sold. Yes I have a vested interested interest in this country of ours. Show me what is wrong with my last post. Show me why we shouldn't fix problems, go to work, make work for the people of this country. Show me. If someone thinks my post is "rediculous" then perhaps this shows the current nature of our country. Get up and get on with it. In fact explain a better way out of the crisis that we are in. And don't harp on about over the past years. The time machine doesn't exist so we deal with the present to build the future. This is why there are achievers and leaders - the rest just follow and talk about things and talk about what I'd do, and his idea is stupid, he didn't do this, he didn't do that. What would you do?

Possibly the dumbest post I have seen on this issue yet and I have seen so many.

Let me explain it to you.

High house prices lead to high mortgage repayments which lead to higher wages which lead to Irish companies becoming uncompetitive which leads to higher unemployment which leads to more people not being able to repay their mortgages.

Is that clear enough for you.

But hey it is ok- the developers will be saved and so to a certain extent will some estate agents- though I would not like to be selling second hand property now.

Which leads to another point- if you do buy a house through this stupid scheme- wil it not instantly devalue as if you need to sell it who is going to buy a second hand house when the govt will lend them money to buy a nice new one?

I work very hard for my salary and I do not see why my tax money should be put towards the developers- have FF got so little faith in the Irish economy that they think the only show in town is property? What about manufacturing etc??


Oh and by the way-it is "foreseen" not "foresaw"

Our govt is a disgrace.

The_Conductor

Guys- please keep ontopic. If you disagree with the factual nature of someone's post- dispute the facts. Do not pick on them, their spelling, or their motivations. If you disagree with the manner in which they have posted- use the report post function.

Also keep in mind that not everyone who posts here has English as a first language.

Regards,

SMcCarrick

Dandelion6

dats_right wrote: »

I would imagine that instead of the current situation where a purchaser of an affordable home owns the property fully but is subject to a clawback, that instead from some point in the near future the Government will own a portion of the home. So a person might own 60% and the Government will own the other 40%

Isn't this just a variation on the Shared Ownership Scheme?

williamb

mrgaa1 wrote: »

What would you do?

What I'd do, and would have done in the Budget, would be to impose a tax on unsold, newly built residential properties. The tax would be 10% of the property value per month (note carefully, per month, not per year),and payable by the property developer.

The "value" of the property, on which the tax would be assessed,would be whatever the developer cares to say it is, but he must include his nominated price in any and all advertising for the property in question, and he must sell the property at that price if it's offered. Obviously safeguards would have to be put in place to prevent sham sales to the developer's nephew :- this can be done fairly easily since we already requre extension information about housing transactions for tax purposes.

The objective here is to get the upcoming and inevitable house price crash out of the way as quickly as possible so we avoid the multi-decade slowdown seen in Japan, and to crater house prices as quickly and ruthlessly as possible. This explains why the tax is payable monthly :- the developers would be forced into a race to the bottom price wise, since they're losing 10% per month in tax on their current prices anyway.

Obviously the cratering of new house prices would have a knock-on affect on second hand prices, and under this scheme the housing market would reach it's new, much lower price equilibrium as quickly and efficiently as possible.

Equally obviously, this tax scheme would have an impact on the financial institution's balance sheets, since it would bring totally transparency to the quality of their construction lending. That's a bonus for the proposal, not a negative :- this is going to happen anyway and we may as well get it out of the way.

astrofool

williamb wrote: »

What I'd do, and would have done in the Budget, would be to impose a tax on unsold, newly built residential properties. The tax would be 10% of the property value per month (note carefully, per month, not per year),and payable by the property developer.

The "value" of the property, on which the tax would be assessed,would be whatever the developer cares to say it is, but he must include his nominated price in any and all advertising for the property in question, and he must sell the property at that price if it's offered. Obviously safeguards would have to be put in place to prevent sham sales to the developer's nephew :- this can be done fairly easily since we already requre extension information about housing transactions for tax purposes.

The objective here is to get the upcoming and inevitable house price crash out of the way as quickly as possible so we avoid the multi-decade slowdown seen in Japan, and to crater house prices as quickly and ruthlessly as possible. This explains why the tax is payable monthly :- the developers would be forced into a race to the bottom price wise, since they're losing 10% per month in tax on their current prices anyway.

Obviously the cratering of new house prices would have a knock-on affect on second hand prices, and under this scheme the housing market would reach it's new, much lower price equilibrium as quickly and efficiently as possible.

Equally obviously, this tax scheme would have an impact on the financial institution's balance sheets, since it would bring totally transparency to the quality of their construction lending. That's a bonus for the proposal, not a negative :- this is going to happen anyway and we may as well get it out of the way.

Lol, so how exactly do the developers, who owe the banks lots of money, pay for this tax? Why in the hell would anyone buy, if in a months time they're guaranteed a lower price as the tax is so punitive, or the developer goes to the wall, and they get it in a firesale.

In the case of a firesale, who owns the property, who pays the tax? Do the banks then take on the burden of this tax?

Idea is completely and utterly ridiculous on so many levels. However, it might get property below the magical price of €3.50.

SkepticOne

It was pretty much predicted that builders would get some sort of dig-out since they were great contributors to FF coffers. Obviously it is the last thing the country needs since it drags out the necessary adjustment in house prices and maximises the damage to the economy.

I wonder how those who were taken in by the whole property scam of the last few years feel about the fact that it only applies to newly built homes?

The main losers are:
1. The tax payer who has to lend for properties the banks are wisely staying away from.
2. The tens of thousands of people trying to sell houses.
3. FTBs who will have to wait longer for prices to come down to reasonablele levels.

The only winners are the builders who have been raking in in over the last decade.

SkepticOne

astrofool wrote: »

Idea is completely and utterly ridiculous on so many levels. However, it might get property below the magical price of €3.50.

Get rid of all supports to the market including the "affordable" housing schemes and prices will quickly come down to the levels people can afford. No need for government intervention.

astrofool

SkepticOne wrote: »

Get rid of all supports to the market including the "affordable" housing schemes and prices will quickly come down to the levels people can afford. No need for government intervention.

You can't just do that in any sane society, people borrowed money based on the set of rules at the time of borrowing, taking away all these perks, raising taxes, will just set off an entire wave of people losing their homes which could devastate the country for a lot longer than it takes for the bubble to reset.

Of course, the argument is that they shouldn't have been introduced in the first place, but we're too late for that now (and they're making it worse with all the new schemes anyway).

Over the years I'd just change everything to one general consumption tax on everything bought, keep it simple

SkepticOne

astrofool wrote: »

You can't just do that in any sane society, people borrowed money based on the set of rules at the time of borrowing, taking away all these perks, raising taxes, will just set off an entire wave of people losing their homes which could devastate the country for a lot longer than it takes for the bubble to reset.

Keep the perks for existing borrowers but remove them for FTBs. House prices will fall, FTBs will gain, homeowners still have their homes, and the tax payer benefits.

connundrum

Good idea or bad idea, there are no new stand alone houses for sale in the Northside of Dublin. I don't want to be part of a management company.. so thats the plan out for me anyways.

fragglewhv

First of all, thanks for the answers to my question.

I just read the report - on which a lot of the changes seem to be based on ... have a look yourselves...

http://www.environ.ie/en/DevelopmentandHousing/Housing/PublicationsDocuments/FileDownLoad,17193,en.pdf



Does anyone know when all theses changes come into effect? I am in the process of buying an affordable property right now... and a bit worried how the changes will affect me.

Thanks.

gurramok

Some say Nov for new applicants and other say Jan 1 for definite for all applicants.

Some and others i mean politicans/journo's.

Equity scheme is worse than AH, you actually have to pay back 30% when you move/sell your house even if its 35 or 70 yrs time when you or your children do sell.

At least with AH, you had 20 yrs to be free of any clawback/payback to the govt.

The_Conductor

Its the 2009 budget. With the exception of VAT and Duty changes, along with excise on tobacco, fuel and alcohol, most measures normally enter force at precisely midnight on the 31st December 2008. If final documents have not been signed at this date- regardless of what you are told, you come under the revised proposals.

astrofool

gurramok wrote: »

Some say Nov for new applicants and other say Jan 1 for definite for all applicants.

Some and others i mean politicans/journo's.

Equity scheme is worse than AH, you actually have to pay back 30% when you move/sell your house even if its 35 or 70 yrs time when you or your children do sell.

At least with AH, you had 20 yrs to be free of any clawback/payback to the govt.

Hopefully this will see the taxpayer make large gains in the future when these properties are to be sold. Far better than the older scheme, I don't see why people should expect to get someone else to share the cost of a house, and not get anything when it's sold on.

Ste.phen

astrofool wrote: »

Hopefully this will see the taxpayer make large gains in the future when these properties are to be sold. Far better than the older scheme, I don't see why people should expect to get someone else to share the cost of a house, and not get anything when it's sold on.

I don't know what makes you think the taxpayer is likely to see ANY gains from this...?

Daith

astrofool wrote: »

Far better than the older scheme, I don't see why people should expect to get someone else to share the cost of a house, and not get anything when it's sold on.

I'm not a fan of affordable housing in the first place but what if the place isn't sold on? Will they need to take out a loan in order to payback the government?

astrofool

Daith wrote: »

I'm not a fan of affordable housing in the first place but what if the place isn't sold on? Will they need to take out a loan in order to payback the government?

Well, either the place gets sold, or inherited by someone else, in either case, the state will get it's 30%.

The taxpayer will see gains, maybe not above inflation, but it will be a long term gain, over 20, 30, possibly even 70 years.

Daith

astrofool wrote: »

Well, either the place gets sold, or inherited by someone else, in either case, the state will get it's 30%.

Why would it be inherited by someone else? 30 years is a long time but hardly terminal. They have to pay the amount at the end of their mortage term (or during the term).

astrofool

Daith wrote: »

Why would it be inherited by someone else? 30 years is a long time but hardly terminal. They have to pay the amount at the end of their mortage term (or during the term).

So, what's your question exactly? The amount will have to be repaid at some stage, at the end of the mortgage term, either the tenant has that 30%saved, or they take out a further loan to pay it back, or they have an equity release scheme through to retirement. At least it gets away from the government taking a 30% bath on every property sold, AND the payback at the end should be taken into account by people buying these properties, and the house price reflect that (i.e. push down the house price).

Daith

astrofool wrote: »

So, what's your question exactly? The amount will have to be repaid at some stage, at the end of the mortgage term, either the tenant has that 30%saved, or they take out a further loan to pay it back, or they have an equity release scheme through to retirement.

Ah I see. Only in Ireland will people pay off their mortage first then save up the deposit to buy it.

astrofool wrote: »

At least it gets away from the government taking a 30% bath on every property sold, AND the payback at the end should be taken into account by people buying these properties, and the house price reflect that (i.e. push down the house price).

Why have the scheme at all? Let the person save up the 30% at the start then buy the house. That way the government won't have to buy anything.

Boggle

You can't just do that in any sane society, people borrowed money based on the set of rules at the time of borrowing, taking away all these perks, raising taxes, will just set off an entire wave of people losing their homes which could devastate the country for a lot longer than it takes for the bubble to reset.

How would people lose their homes? (He didn't mention removing interest relief did he??) A house is meant to be a home, not an investment. If its your home and you can pay for it then so what?? If you can't pay for it then the value makes no difference as you'll lose it anyway. Lower prices make it easier to trade up if you wish to have a family as, while the proportional difference may remain, it translates to less money in real terms. I fail to see the problem with this side of things.

If your an investor, then tough sh1t! Those who profit by crippling families deserve and get no sympathy from my end. Although 10% per month is way too severe. Not that it matters anyway - the banks have been guaranteed now so it will suit them soon to foreclose on as many developers as possible within the 2 year protected window!! (How much do developers owe our banks again??)

Anyway, take your average couple who is now paying even only €600 per month extra (in comparison with 10 years ago) and redistribute that into the economy and see how much better we all are.

gurramok

astrofool wrote: »

Hopefully this will see the taxpayer make large gains in the future when these properties are to be sold. Far better than the older scheme, I don't see why people should expect to get someone else to share the cost of a house, and not get anything when it's sold on.

I see where your coming from. I'd agree that house prices should be higher than they are now in 35yrs time due to inflation and bubble cycles and the state might make a profit on a house.

It just seems like a money making opportunity on those who cannot afford to buy now.
Following the link that fragglewhv posted it seems anyone on an income of 38k can buy either a 200k or a 300k house through this scheme, can this be right, surely not?

Also to throw into the mix, the public purse will be plundered for these 'equity' loans, it just looks awful from a budget point of view in a recession.

Far better to let prices lower to their natural level and the state would actually make money in the present from housing transactions rather than waiting 35yr+ for the dosh!

SimpleSam06

astrofool wrote: »

Over the years I'd just change everything to one general consumption tax on everything bought, keep it simple

Nope, that just encourages people to squirrel away money and never spend it, generally a bad idea.

FGR

I'm still trying to get my head around this.

The 30% Government Equity will permanently remain on the house from the day it's bought to the completion of the mortgage..where the owner will be legally obliged to then take out another loan to buy up that 30%?

Who would be so mad as to do that? I could understand if the clawback remained permanently should the owner sell up..but isn't the point of the Affordable House to allow people to pay less for a home to -live- in? Delaying a 30% bill for 30 years isn't going to really help that..

The_Conductor

ForegoneReality wrote: »

but isn't the point of the Affordable House to allow people to pay less for a home to -live- in? Delaying a 30% bill for 30 years isn't going to really help that..

No- the point of affordable housing is to put a roof over people's heads and house them- without the initial cost at the outset being a hindrance to housing them........ People are focusing on who owns what, and what the finances are- and how they will be 25 or 30 years down the road- those concerns simply don't feature in the raison d'etre of the scheme.......

If you have accommodation at present, but qualify for affordable housing, and are not concerned with the equity stake the exchequer will continue to hold- go for it- if on the other hand, its a problem for you- don't go for it. If you don't have accommodation and qualify for affordable housing- surely its a no-brainer- it puts a roof over your head..........