Budget 2009 & Affordable Housing

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..........