Continuation of tax relief at same rate

mmc2010

Hi, I'm interested in hearing different points of view on this. I'm aware that the rate of tax relief for first time buyers is supposed to fall next year from 25% to 15%. Do people think this is definitely going to happen? I would have thought that the government would want to encourage the sale and purchase of houses to get the housing market moving again but this will prove more difficult if the tax relief will fall and interest rates increase......
Especially as it is even more difficult now to get a mortgage. Is there any chance that there will be a reversal on this decision or is it just wishful thinking on my part

Learpholl

Complete speculation from me but unfortunately I think it may be wishful thinking on your part. There were rumours a while back that the TRS would be completely wiped for FTB's in the next budget, bringing it forward a year since thats the plan from 2013 onwards anyway and an increase in tax relief for anyone who bought between 2004-2008.

Personally, I've my fingers crossed that your wishful thinking comes through and the decision is reversed and the rate remains the same next year. Cant see it happening though.

ongarboy

I'd say it will be scrapped altogether for new buyers with property prices being dirt cheap right now but increased up to a max of 166 euro a month for those purchasers who bought between 2004 and 08. FG TD Simon Coveney was on The Week In Politics on RTE1 last night and alluded to this being the case but said he couldn't officially comment in advance of the Budget which will take place in early December. I'd happily give up my tax relief if I could purchase my property at today's prices rather than the astronomical price I paid in 2005

Zamboni

Learpholl wrote: »

There were rumours a while back that the TRS would be completely wiped for FTB's in the next budget, bringing it forward a year since thats the plan from 2013 onwards anyway and an increase in tax relief for anyone who bought between 2004-2008.

I swear, if they do that I'm leaving this country.

Learpholl

Zamboni wrote: »

I swear, if they do that I'm leaving this country.

Seems crazy to me too but see ongarboy's post above. I didn't see the week in politics but I know its been rumoured on other sites in the past also.

Zamboni

Learpholl wrote: »

Seems crazy to me too but see ongarboy's post above. I didn't see the week in politics but I know its been rumoured on other sites in the past also.

It is actually enough to push me over the line and make me hate my own nationality if it comes into place.
What the hell is so special about people who bought between 2004 - 2008 that they think they can throw my hard earned tax money around like candy?
Unbelievable

the groutch

that sounds like another method of debt forgiveness through the back door, newsflash for you FG, we're not that stupid.

ongarboy

I suppose the argument would be (and I'm most certainly not saying I'm special for buying in that era), take 2 people earning 50K a year. One bought a tiny one/two bed aparment in 2005 for 280000 (because that was the cheapest available that they could afford) and took out a mortgage of 250K to pay for it over 35 years at 950 euro a month.

Now take the 2nd person, a FTB, also on 50K salary a year, they are able to buy a 3 bed semi in 2011 for 195K with front and back garden in the same neighbourhood as buyer 1. They only need to take a mortgage of 180K which works out at perhaps 650 a month. They are paying 300 less a month in repayments for a far superior property. Who is more deserving of the tax relief?

If you argue that there are those on salaries of a lot less than 50K who would be very dependent on TRS, I can tell you that those people wouldn't even have been able to afford a property..period...back in 2005 (at least in the greater Dublin area). The fact that they can consider buying in 2011 is wonderful.

Btw, I'm not saying FTBs today should have TRS scrapped if it's the difference between them affording a mortgage or not, I'm just saying that I can support why increased TRS would be given to those paying massive mortgages from the the 04-08 era. Buyers then did not know there would be a crash and panicked as they saw tiny properties go up by 10k a month and feared they'd never be able to own a property.

Zamboni

ongarboy wrote: »

I suppose the argument would be (and I'm most certainly not saying I'm special for buying in that era), take 2 people earning 50K a year. One bought a tiny one/two bed aparment in 2005 for 280000 (because that was the cheapest available that they could afford) and took out a mortgage of 250K to pay for it over 35 years at 950 euro a month.

Now take the 2nd person, a FTB, also on 50K salary a year, they are able to buy a 3 bed semi in 2011 for 195K with front and back garden in the same neighbourhood as buyer 1. They only need to take a mortgage of 180K which works out at perhaps 650 a month. They are paying 300 less a month in repayments for a far superior property. Who is more deserving of the tax relief?

Neither.

the groutch

I don't think anyone is necessarily more deserving of or entitled to TRS than anyone else, but those who bought in 04-08 probably do need it more now than those buying now.
The problem is that it's never going to sit well the concept of compensation of those who made bad financial decisions, mainly at the expense of those who have made sounder financial decisions.

Learpholl

Zamboni wrote: »

I swear, if they do that I'm leaving this country.

Bye Zamboni

Dades

So, have they increased Mortage Interest Relief for those who bought between 2004 and 2008?

20% to 25%?

Am trying to get a handle on this...

air

It's gone to 30% for first time buyers who bought between 2004 and 2008, to be paid until 2017 I believe.

From:
http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/mortgage_interest_relief.html


The Minister for Finance said in the Dáil: "... the Deputy is referring to the commitment in the Programme for Government to increasing mortgage interest relief to 30% for First Time Buyers who bought between 2004 and 2008 and to finance this in part by abolishing interest relief for new buyers from June 2011. ... it is unlikely that any measures will be introduced before budget 2012."

ParkRunner

Would it be too simplistic to say that the vast majority those who bought between 2004 and 2008 would be on tracker mortgages and therefore on very low rates of interest in any case?

dory

In fairness from late 2007 everyone knew which way the property market was going. People who bought in 2008 shouldn't be getting this relief.

Dades

EF wrote: »

Would it be too simplistic to say that the vast majority those who bought between 2004 and 2008 would be on tracker mortgages and therefore on very low rates of interest in any case?

It's not the rates that are killing people it's the price they paid for the house.

mmc2010

yippee!!!! so am I right in thinking that they are going to continue the current TR entitlement for the next year. So 25% for next year and decreasing for the next 7 years??

air

The programme to government linked on the page above mentions "Increasing mortgage interest relief to 30% for First Time Buyers in 2004-08 (from
the current sliding scale of 20% to 25% depending on the year the mortgage was
taken out)"
This seems to indicate a flat 30% rate up to 2017 instead of the normal sliding scale which reduces over the 7 years.

astrofool

30% if you bought between 04 and 08

Supercell

FTB TRS kept at 25% for another year, it was due to be dropped to 15% after Dec 31st if you closed in the new year.

wingnut

Feck it, just missed out... bought the house in 2009!

toby2111

I bought my house in 2004, I presumed my TRS was due to finish this year because I have the house 7 years.Does todays decision mean I get 30% interest relief until 2017?

air

It looks like it, if you took the time to read the information on the link posted above you would read the following:

For a mortgage taken out between 1 January 2004 and 31 December 2011, the Finance Act 2010 provides that your entitlement to relief will continue until the end of 2017

When you add this to today's announcement it would appear that mortgages from 04->08 will have relief at 30% until 2017

Zamboni

Learpholl wrote: »

Bye Zamboni

Australian job application just completed...

Zamboni

air wrote: »

It's gone to 30% for first time buyers who bought between 2004 and 2008, to be paid until 2017 I believe.

From:
http://www.citizensinformation.ie/en/housing/owning_a_home/buying_a_home/mortgage_interest_relief.html


The Minister for Finance said in the Dáil: "... the Deputy is referring to the commitment in the Programme for Government to increasing mortgage interest relief to 30% for First Time Buyers who bought between 2004 and 2008 and to finance this in part by abolishing interest relief for new buyers from June 2011. ... it is unlikely that any measures will be introduced before budget 2012."

Beyond shocking.
There are a large number of people in that 2004-2008 group who do not need assistance at all and we are throwing cash their way.
Retarded.

the groutch

so is it being abolished at the end of next year for new buyers then?

air

the groutch wrote: »

so is it being abolished at the end of next year for new buyers then?

Yes.

cgc5483

Zamboni wrote: »

Beyond shocking.
There are a large number of people in that 2004-2008 group who do not need assistance at all and we are throwing cash their way.
Retarded.

As a matter of interest what are you basing this assumption on?

Zamboni

cgc5483 wrote: »

As a matter of interest what are you basing this assumption on?

Despite the widespread negative equity amongst borrowers, particularly for those who purchased properties between 2005 and 2008 (one-third of loans), the vast majority of negative equity borrowers, over 90%, were not in arrears at the end of 2010.

http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankPublishesNewResearchonMortgageArrearsandNegativeEquity.aspx

the groutch

Dades wrote: »

It's not the rates that are killing people it's the price they paid for the house.

no, it's the fact that so many of them have since lost their jobs
negative equity means very little once you still have the means to continue making repayments

cgc5483

Zamboni wrote: »

http://www.centralbank.ie/press-area/press-releases/Pages/CentralBankPublishesNewResearchonMortgageArrearsandNegativeEquity.aspx

While i take your point I don't see how the fact that only 10% of people in negative equity are in arrears I don't see how that equates to the fact that the other 90% of people "do not need assistance at all". Alot of people who aren't in arrears are in such a position because keeping up with mortgage payments is their priority and have barely enough left afterwards to put food on the table and clothes on their families back. The net result of this increase will be to help ease this hardship and through the increase will allow them to spend a little bit more which will only aid the economy.

The fact that this happens is what would drive you to leave the country and not some of the other decisions made previously regarding bailing out banks and paying bondholders which have little benefit to the average joe soap and cost a hell of a lot more money seems a bit drastic to me.

the groutch wrote: »

no, it's the fact that so many of them have since lost their jobs
negative equity means very little once you still have the means to continue making repayments

While it is only a sum on paper it does impact significantly on peoples lifes e.g. ability to take up positions in different part of country, suitbality of accomodation for current needs etc

Zamboni

cgc5483 wrote: »

While i take your point I don't see how the fact that only 10% of people in negative equity are in arrears I don't see how that equates to the fact that the other 90% of people "do not need assistance at all". Alot of people who aren't in arrears are in such a position because keeping up with mortgage payments is their priority and have barely enough left afterwards to put food on the table and clothes on their families back. The net result of this increase will be to help ease this hardship and through the increase will allow them to spend a little bit more which will only aid the economy.

They chose to buy. Like you did.
You don't deserve any more tax relief than I do.

mathie

toby2111 wrote: »

I bought my house in 2004, I presumed my TRS was due to finish this year because I have the house 7 years.Does todays decision mean I get 30% interest relief until 2017?

I don't think they extend the period of time (7 years) that you get TRS for.

They just changed the amount of relief you get.

Sure if you bought in 2004 your TRS will end this year anyway.

Bit of a sneaky one by the Government there.

mathie

Zamboni wrote: »

They chose to buy. Like you did.
You don't deserve any more tax relief than I do.

I feel your frustration Zamboni but you have to understand that the lobby groups in this country are more important to the government than the taxpayers.

toby2111

mathie wrote: »

Bit of a sneaky one by the Government there.

Yeh,seems like more lies.So if you bought in 2004,you dont get 30% relief.As of from 1st Jan 2012,you get none.

Edit-sorry saw this on revenue.ie-"Mortgages taken out from 1st January 2004 to 31st December 2011, subject to qualifying mortgage criteria, are eligible for mortgage interest relief until 31st December 2017."Going to ring and see what the story is

cgc5483

Zamboni wrote: »

They chose to buy. Like you did.
You don't deserve any more tax relief than I do.

Irrespective of choice or not lots of 1st time buyers from this period are in serious problems with their mortgage payments and if it helps prevent defaults and increases peoples spending power in the long term it will add much more to the economy that it costs the taxpayer.

And to describe it as tax relief is a misnomer since it's applicable to everybody irrespective of whether they are paying tax or not

cgc5483

toby2111 wrote: »

Yeh,seems like more lies.So if you bought in 2004,you dont get 30% relief.As of from 1st Jan 2012,you get none.

Edit-sorry saw this on revenue.ie-"Mortgages taken out from 1st January 2004 to 31st December 2011, subject to qualifying mortgage criteria, are eligible for mortgage interest relief until 31st December 2017."Going to ring and see what the story is

Pretty sure that it was stated in the previous budget that it would apply until end 2017 for everyone in 2004-2008 period.

Zamboni

cgc5483 wrote: »

Irrespective of choice or not lots of 1st time buyers from this period are in serious problems with their mortgage payments and if it helps prevent defaults and increases peoples spending power in the long term it will add much more to the economy that it costs the taxpayer.

And to describe it as tax relief is a misnomer since it's applicable to everybody irrespective of whether they are paying tax or not

Apologies that last bit was my error.

The simple fact is the people in this bracket are being compensated by the tax payer for purchasing in a specific period. This is utterly wrong and unjustifiable.
Robbing from the smart to give to the not so smart.

cgc5483

Zamboni wrote: »

Apologies that last bit was my error.

The simple fact is the people in this bracket are being compensated by the tax payer for purchasing in a specific period. This is utterly wrong and unjustifiable.
Robbing from the smart to give to the not so smart.

Yes you are correct that these people are being compensated by the tax payer. My point is that I believe it is justifiable in the context of the current predicaments.

To suggest that those who bought during this period are "not so smart" and those who didn't are smart is easy to do after all hindsight is a wonderful thing.

Zamboni

cgc5483 wrote: »

Yes you are correct that these people are being compensated by the tax payer. My point is that I believe it is justifiable in the context of the current predicaments.

To suggest that those who bought during this period are "not so smart" and those who didn't are smart is easy to do after all hindsight is a wonderful thing.

Hindsight? Seriously?
If you came on here and asked if people thought that was a good idea when you bought in early 2008 you would have been told it was certainly not a good idea. You have now suffered 3 years of property price decreases.
You cannot objectively stand back and see why this decision is unjustifiable because you are biased and emotionally involved in the decision.

I do not care who bought or when they bought but I know that compensating anyone for a purchase of this nature, after the fact, is unethical, uneconomical and a waste of tax payer money.

cgc5483

Zamboni wrote: »

Hindsight? Seriously?
If you came on here and asked if people thought that was a good idea when you bought in early 2008 you would have been told it was certainly not a good idea. You have now suffered 3 years of property price decreases.
You cannot objectively stand back and see why this decision is unjustifiable because you are biased and emotionally involved in the decision.

I do not care who bought or when they bought but I know that compensating anyone for a purchase of this nature, after the fact, is unethical, uneconomical and a waste of tax payer money.

Not everything in life is black and white. What i said is that i did believe it was justifiable in the current context.

Dades

the groutch wrote: »

Dades wrote: »

It's not the rates that are killing people it's the price they paid for the house.

no, it's the fact that so many of them have since lost their jobs
negative equity means very little once you still have the means to continue making repayments

That's probably fair to say.

subzeropeck

Cant believe they didnt include 2009!!!!infuriating, we bought in 2009 and houses on our street are selling for less than half the price we paid for ours

air

I think including 08 was generous tbh, the writing was certainly on the wall in 07.

arikv

subzeropeck wrote: »

Cant believe they didnt include 2009!!!!infuriating, we bought in 2009 and houses on our street are selling for less than half the price we paid for ours

I'm in the same boat, as I bought (FTB) in 2011 and asking prices in the Area (south County Dublin) are now 10-20% less than what we actually paid for! I didn't buy the house to make profit, but do not like the idea of not being able to trade up in the next few years as work/schools situation could change.