Property Market 2018

Bob24

awec wrote: »

Is there a way of knowing how much interest vs capital you are paying before you actually start paying the mortgage?

Trying to work out how long it will take us to drop into the lower interest rate bracket based off of our initial payment rate + house price remaining static.

You can find spreadsheets which will do the calculations: you input your borrowed amount, interest rate, and mortgage duration, and it will spit out your full repayment calendar with for each month a breakdown of capital v.s interest in that payment and the fullamount you will still owe to the bank at that point in time. The one I have also lets you input a now interest rate, once-off payment, monthly payment amount, or final payment date at any point on the calendar and will recalculate the rest of the mortgage accordingly - very convenient to estimate the impact of those changes.

Thinks is mine is in French as I got it from a French friend a while ago so you might want to google this and find one in English. But I can share it this evening if you want it.


Also if it is just a matter of calculating where you stand today you don’t need the spreadsheet (which is more for forecasting).

Let’s say you have a mortgage of 100000 with 3% interest rate and 500 per month repayment. You known your interests are roughly 3000 the first year I.e. 250 per month. So each month half your payment to the bank going towards capital reimbursement and the other half towards interests.

aloooof

awec wrote: »

Jaysus it is scary to see how much banks make in interest.

Looks like it'd take us about 5 years to drop into the lower LTV rates.

Fairly eye opening alright. It would incentivise you to try and overpay to reduce the interest payments tho, particularly early on. Ultimately, overpayment early in the mortgage is far more beneficial than late.

awec

aloooof wrote: »

Fairly eye opening alright. It would incentivise you to try and overpay to reduce the interest payments tho, particularly early on. Ultimately, overpayment early in the mortgage is far more beneficial than late.

But also more difficult though. A lot of costs when you initially buy a house and also people are more likely to have higher salaries later in life.

Do overpayments go only toward the capital or also interest?

AlmightyCushion

awec wrote: »

But also more difficult though. A lot of costs when you initially buy a house and also people are more likely to have higher salaries later in life.

Do overpayments go only toward the capital or also interest?

Only towards capital.

Shedite27

Way I see it, 3/4 years back, when mortgage rates were about 4.5% and ECB rate was 0.25%, people thought the only way was up because the ECB could only go up, and the back wasn't going to reduce it's share.

Turns out the back was willing to reduce its share, or rather had to. With the lending rules, banks haven't been able to lend as much as they like, and now the banks have far too much cash on deposit (hence 0% interest on savings).

So the only way the banks could lend out money was by undercutting each other to win the good business, which has been great for the customer.

If ECB rates were to rise, would the banks raise their rates in unison? Probably, but they'll still have the same problem and have to undercut each other. Otherwise they won't make any profit for themselves.

handlemaster

It will be alright in the end Ted. Up or down tis just a journey

SNNUS

It's all Mystic Meg stuff here!

Bob24

Interesting piece in The Economist related to where interest rates might go globally: https://www.economist.com/news/leaders/21741144-there-no-need-panic-about-government-bond-market-meaning-3-treasury-bond-yields?frsc=dg%7Ce

They don’t seem to think we’ll see a significant rise anytime soon ...

Marius34

Garphiel wrote: »

Have to disagree here, in relation to property prices anyway.
A recent Irish Times article, (Cash buyers lead the charge as Ireland’s property woes continue - Apr 3rd 2018) estimates cash buyers are making up 50 - 60% of all transactions.

50%-60%, that doesn't sound right numbers, I'm not sure what article tells, but it doesn't say that over half are cash transactions.

Today cash buyers present around 32,2% of transactions.

Based on the household credit market report for 2017 Q2 from central bank:
"Despite a gradual increase in the share of
mortgaged household transactions since 2014, the
share of non-mortgaged household transactions remains
quite significant at c.34 per cent in Q2 2017."

Based on the Housing Market Monitor report for 2017 Q4 from BPFI:
"Cash sales accounted for 32.2% of sales on an annualised
basis in Q4 2017, down from 38% a year earlier.
Cash sales in the Dublin Commuter region fell to 21.3%
and in Dublin to 23.4%. Cork/Galway/Limerick/Waterford
was the only region where the cash sales ratio increased
from Q3 2017 but at 23.6%, it was well below its Q4 2016
level of 40%."

UsBus

Anyone hear the Bobby Kerr show earlier? I think one of the guests was speaking about Brexit. Apparently there are some figures out recently on recruitment numbers, I think they mentioned financial recruitment. The numbers have fallen off a cliff in the UK, it was mentioned that these numbers were an indicator of where the market was headed. Other recruitment numbers in the UK have completely flat lined...It looks like they could be in for a nightmare next year.. Meanwhile all of the investment is now concentrated on Ireland in terms of financial jobs and company purchases..The irish economy is thought to be the ideal investment instead of the UK.

I wonder will this mean a further surge in price and competition here while our neighbours head for a crash.? Can't be good for Ireland either way..

regular_slob

UsBus wrote: »

Anyone hear the Bobby Kerr show earlier? I think one of the guests was speaking about Brexit. Apparently there are some figures out recently on recruitment numbers, I think they mentioned financial recruitment. The numbers have fallen off a cliff in the UK, it was mentioned that these numbers were an indicator of where the market was headed. Other recruitment numbers in the UK have completely flat lined...It looks like they could be in for a nightmare next year.. Meanwhile all of the investment is now concentrated on Ireland in terms of financial jobs and company purchases..The irish economy is thought to be the ideal investment instead of the UK.

I wonder will this mean a further surge in price and competition here while our neighbours head for a crash.? Can't be good for Ireland either way..

from what ive read in the international financial press , frankfurt will dwarf dublin in terms of the number of jobs which move from the city of london , taxes are simply too high on high earners in ireland , someone who is earning over 100 k for one of the banks in london would see a huge tax hike should they move here , add to that the chronic shortage of accommodation and the brexit benefit is very much over done , the downsides are a much more real and impending reality

manniot2

All that talk of brexit jobs moving here is just media waffle..Having worked in various financial services companies in London, most of them could barely find Dublin on a map, zero chance they would move here, even if housing was abundant and taxes low. The talent drain these companies would experience if they moved would far outweigh any brexit problems. We will continue to pick up the back office stuff, but not much else.

The_Conductor

regular_slob wrote: »

from what ive read in the international financial press , frankfurt will dwarf dublin in terms of the number of jobs which move from the city of london , taxes are simply too high on high earners in ireland , someone who is earning over 100 k for one of the banks in london would see a huge tax hike should they move here , add to that the chronic shortage of accommodation and the brexit benefit is very much over done , the downsides are a much more real and impending reality

+1
Some of the recruitment companies are suggesting jobs on offer in the financial sector here- have also fallen off a cliff.
I.e. Paris, Frankfurt- and Amsterdam- are mopping up- and Dublin is actually haemorhaging posts- not gaining them.

We do not have a dividend in the financial sector here from Brexit (at all)- we're actively loosing posts- esp. to Paris and Frankfurt (but also to a few more esoteric locations).

The government keeps making noises about tackling our ridiculously high rates of personal taxation- but the simple fact of the matter is- they are killing recruitment in the IT and Financial Sectors. If you look at reps to the DoF- particularly from the American Chamber of Commerce- but also from the individual multinationals- they are all singing off the same hymn sheet- they cannot expand here- because they cannot pay workers to work here- our taxation system is too onerous.

Bob24

The_Conductor wrote: »

The government keeps making noises about tackling our ridiculously high rates of personal taxation- but the simple fact of the matter is- they are killing recruitment in the IT and Financial Sectors. If you look at reps to the DoF- particularly from the American Chamber of Commerce- but also from the individual multinationals- they are all singing off the same hymn sheet- they cannot expand here- because they cannot pay workers to work here- our taxation system is too onerous.

Have a look at pages 7 and 8 there: http://www.institutmolinari.org/IMG/pdf/tax-burden-eu-2017.pdf

I believe that the housing cost and lack of some types of infrastructure/services are issues for bringing certain international jobs to Dublin, but certainly not our labour taxation level* - to me this is a myth which is contradicted by all the figures I've seen (all the locations you mentioned - Paris, Frankfurt, and Amsterdam - would have fairly significantly higher tax burden on labour compared to Dublin).

* except in some specific cases because our very small number of tax bands doesn't make things progressive enough, but in the grand scheme of things and for the average worker we are amongst the cheapest in Europe - not to mention that due to our low corporate tax companies booking profits here should have more money available for gross salaries.

erudec

regular_slob wrote: »

from what ive read in the international financial press , frankfurt will dwarf dublin in terms of the number of jobs which move from the city of london , taxes are simply too high on high earners in ireland , someone who is earning over 100 k for one of the banks in london would see a huge tax hike should they move here , add to that the chronic shortage of accommodation and the brexit benefit is very much over done , the downsides are a much more real and impending reality

The weird thing is that it's so easy to cut that down to 12%.

Just tweak the structure so that the person is a "private company" and his tax is just one eighth of his income.

I don't understand why, if the tax on employees is so high, they just don't change the label to have the same bloke do the same work as a "private consultancy company" paying no more than the corporate rate.

erudec

Wanderer78 wrote: »

and the disturbing thing is, we ve done little or nothing to address these issues, we have to take back some sort of control of our banking and money creation systems, we cannot allow banks to be the main source of money creation.

Haven't banks been the sole source of money creation for the last 500 years?

Graham

erudec wrote: »

I don't understand why, if the tax on employees is so high, they just don't change the label to have the same bloke do the same work as a "private consultancy company" paying no more than the corporate rate.

That will just leave the employee/consultant liable for two sets of taxes.

erudec

Graham wrote: »

That will just leave the employee/consultant liable for two sets of taxes.

Wouldn't that still be cheaper than paying the full rate of tax as a PAYE worker?

You'll notice I'm not an accountant!

AlmightyCushion

erudec wrote: »

Wouldn't that still be cheaper than paying the full rate of tax as a PAYE worker?

You'll notice I'm not an accountant!

When they want to withdraw money from the company they'll take that as a dividend which has the same taxes on it as income from a job. So, they end up paying more tax.

erudec

AlmightyCushion wrote: »

When they want to withdraw money from the company they'll take that as a dividend which has the same taxes on it as income from a job. So, they end up paying more tax.

Isn't that just a simple question of opening up a shelf company in a tax haven?

Also, why would he withdraw money as a dividend instead of just getting a loan from the company, secured against his own shares?

All I know is that the very rich pay less taxes than their own secretaries, I find it very hard to believe that in Ireland there aren't plenty of opportunities for creatively structuring one's money to avoid taxes legally.

Tax avoidance has always been easily facilitated in Ireland and I would need to see overwhelming proof before I believe that is no longer the case.

Mickiemcfist

erudec wrote: »

Isn't that just a simple question of opening up a shelf company in a tax haven?

Also, why would he withdraw money as a dividend instead of just getting a loan from the company, secured against his own shares?

All I know is that the very rich pay less taxes than their own secretaries, I find it very hard to believe that in Ireland there aren't plenty of opportunities for creatively structuring one's money to avoid taxes legally.

Tax avoidance has always been easily facilitated in Ireland and I would need to see overwhelming proof before I believe that is no longer the case.

It's easy to do when someone is making millions, as typically the money earned by the "company" will be reinvested in business opportunities etc. So doesn't necessarily have to leave the entity. Whereas someone on 100k will more than likely use the money to fund their lifestyle, mortgage etc. So it can't be kept in a company, it has to be paid to the individual so will incur tax. Revenue are quite strict on what a business owner can spend on expenses, most incur BIK so that's not a good route either.

If it was as easy as you make it sound sure why wouldn't everyone own a company?

Cyrus

erudec wrote: »

Isn't that just a simple question of opening up a shelf company in a tax haven?

Also, why would he withdraw money as a dividend instead of just getting a loan from the company, secured against his own shares?

All I know is that the very rich pay less taxes than their own secretaries, I find it very hard to believe that in Ireland there aren't plenty of opportunities for creatively structuring one's money to avoid taxes legally.

Tax avoidance has always been easily facilitated in Ireland and I would need to see overwhelming proof before I believe that is no longer the case.

100k a year isn’t very rich I think your imagination has run away with you

erudec

erudec wrote: »

Isn't that just a simple question of opening up a shelf company in a tax haven?

Also, why would he withdraw money as a dividend instead of just getting a loan from the company, secured against his own shares?

All I know is that the very rich pay less taxes than their own secretaries, I find it very hard to believe that in Ireland there aren't plenty of opportunities for creatively structuring one's money to avoid taxes legally.

Tax avoidance has always been easily facilitated in Ireland and I would need to see overwhelming proof before I believe that is no longer the case.

Overwhelming proof..... revenue now have close to zero tolerance for consultants working as self employed with their own company claiming any unvouched expenses.

Also, you are suggesting a bogus self employed situation which is also a no no.

Also, no high flying , extremely well paid individual would be considering a move to being a self employed consultant. When seriously well salaried individuals get let go they get seriously large PFO packages. If they were sent employed they lose that benefit.

You reckon to know the very rich pay less taxes then their secretaries...... prove it ? Didn't think so....

eeguy

Augeo wrote: »

Overwhelming proof..... revenue now have close to zero tolerance for consultants working as self employed with their own company claiming any unvouched expenses.

Also, you are suggesting a bogus self employed situation which is also a no no.

Also, no high flying , extremely well paid individual would be considering a move to being a self employed consultant. When seriously well salaried individuals get let go they get seriously large PFO packages. If they were sent employed they lose that benefit.

You reckon to know the very rich pay less taxes then their secretaries...... prove it ? Didn't think so....

This issue comes up regularly. No one is ever able to point to specific methods of tax evasion that an employee can readily take advantage

eeguy

eeguy wrote: »

This issue comes up regularly. No one is ever able to point to specific methods of tax evasion that an employee can readily take advantage

Well the ones you've mentioned for self employed consultants are all non runners.

You reckon they can take their money after paying corporation tax, try that and see how long it is before revenue come calling after zero prsi & paye payment

ELM327

erudec wrote: »

Wouldn't that still be cheaper than paying the full rate of tax as a PAYE worker?

You'll notice I'm not an accountant!

Considering that the company will pay corporation tax and the owner will then pay either PAYE on the income withdraw from the company or tax on the dividend, it will work out at best with parity to a PAYE employee.

You also have to factor in the penalty tax (in addition to Capital Gains Tax and corporation tax) when dealing primarily in property, a business is liable for additional corporation tax. It's not a good business model unless you're a sole trader or large conglomerate/vulture fund.

This link explains a lot
https://www.maneelymccann.ie/factsheets/personal-tax/property-investment-tax-aspects

Marius34

I have worked for many countries as IT consultant. And I have to say that so far its the only country that it has no benefit to be self-employed or to have your own Limited Company (for Irish tax resident). What ever way you try to "personalize" any earned money, you will pay income tax on a top of any other tax. Which is 40%+4%+11% = 55% what's over 100K.
Those times about opening company in "tax heaven" in mostly gone. There is still some cases but its rare.
Nowadays the only way to avoid income tax, is to change your residency, but then you need to not overstay more than 183 days/year in Ireland.
Just try to find out what is Residency status of Irish rich people. You will find out that they residency are all over the world, Switzerland,Cyprus,Malta,Spain and etc., but not Ireland.

erudec

Augeo wrote: »

Overwhelming proof..... revenue now have close to zero tolerance for consultants working as self employed with their own company claiming any unvouched expenses.

Also, you are suggesting a bogus self employed situation which is also a no no.

Also, no high flying , extremely well paid individual would be considering a move to being a self employed consultant. When seriously well salaried individuals get let go they get seriously large PFO packages. If they were sent employed they lose that benefit.

You reckon to know the very rich pay less taxes then their secretaries...... prove it ? Didn't think so....

Well, Warren Buffett reckons that, and it's not denied by any US commentators. Anyway, I'm too long in the tooth to give any more time to arguing about taxes on the internet. Rest assured I'm sure you're right about everything. Goodbye now.

erudec

erudec wrote: »

Well, Warren Buffett reckons that, and it's not denied by any US commentators. Anyway, I'm too long in the tooth to give any more time to arguing about taxes on the internet. Rest assured I'm sure you're right about everything. Goodbye now.

He reckons that about folk in Ireland? Resident & working in Ireland?

All of your recent comments are incorrect so I wouldn't be getting too indignant if I were you to be honest.

You were bleating on about 12% corporation tax so please don't now claim your points weren't about Ireland.

Eric Cartman

Cyrus wrote: »

100k a year isn’t very rich I think your imagination has run away with you

+1, Ive looked into every loophole possible and the reality is none of them are possible / effective till you're banking a million quid a year minimum, these loan schemes and offshore accounts and re-routing craic only really tends to be profitable above 4-5 mil a year.