Property Market 2020

Donald Trump

Perhaps they could structure the rent cap so that if the rates decrease then they be be increased back up to the previous high watermark at a higher annual rate of increase.

But there would obviously have to be genuine previous watermarks i.e. have to have been occupied at that rate for a full year.

SozBbz

Graham wrote: »

Guidance from the RTB on the subject:

Reviewing the Rent and Notices of Rent Review During the Emergency Period


Emphasis mine.

Source

Thats not the scenario we're talking about here though. We're talking about Landlords commencing new tenancies at a lower rate than say Feb 2020, which it seems many are reluctant to do.

Its different when there was a previously established pattern of paying X rent (as set out in a lease) and then a temporary arrangement is made. If you start on X-20% for example, I can see how a LL might be wary of ever moving away from that number.

Graham

SozBbz wrote: »

Thats not the scenario we're talking about here though.

Spotted that just after posting SozBbz so removed it as out of context

brisan

SozBbz wrote: »

It does it they are then locked in to a low rent because they reduced their ask during Covid.

Its the classic law of unintended consequences.

They are locked into market rates
If a landlord reduces rent from say 2k to 1600 thats a 400 drop.
So over 12 months that's 4800
By leaving the apt sitting there for 3 months he has lost 6k
Its only worth money if he leases it out
I know he is thinking eventually he will make money if he leaves it at 2k ,but he has no guarantee when, if ever prices will go back to their previous level

Assetbacked

I wonder could it be constructed to offer a 12 month fixed term lease with current preferred rate of rent due each month, with an add on of a month or two or whatever free rent at the end if the tenant adheres to the terms of the 12 month fixed term lease and unless both parties agree otherwise. So the landlord secures 12 months worth of rent in the next 15 months at his preferred rate and ensures he's not caught at a lower rate if things recover by then.

brisan

Assetbacked wrote: »

I wonder could it be constructed to offer a 12 month fixed term lease with current preferred rate of rent due each month, with an add on of a month or two or whatever free rent at the end if the tenant adheres to the terms of the 12 month fixed term lease and unless both parties agree otherwise. So the landlord secures 12 months worth of rent in the next 15 months at his preferred rate and ensures he's not caught at a lower rate if things recover by then.

Still has to find someone who will pay the high rent up front

IAmTheReign

brisan wrote: »

They are locked into market rates
If a landlord reduces rent from say 2k to 1600 thats a 400 drop.
So over 12 months that's 4800
By leaving the apt sitting there for 3 months he has lost 6k
Its only worth money if he leases it out
I know he is thinking eventually he will make money if he leaves it at 2k ,but he has no guarantee when, if ever prices will go back to their previous level

But large scale investors think in longer terms than 12 months.

If you have a choice in renting an apartment immediately for 1,600 or waiting 3 months to rent it at 2,000 you break even after just 15 months.

15 months @ 1,600 = 24,000
12 months @ 2,000 = 24,000

A year later and holding out for the higher rent is worth nearly 5,000.

27 months @ 1,600 = 43,200
24 months @ 2,000 = 48,000

And with the rent cap at 4% this difference gets compounded every 2 years when you can review the rent.

smurgen

So the rents of these new luxury apartments that have sprung up are too high and the proposed fix is to lift the rent cap? This place is funny.

Assetbacked

smurgen wrote: »

So the rents of these new luxury apartments that have sprung up are too high and the proposed fix is to lift the rent cap? This place is funny.

My guess is that they are kept high on purpose in order to achieve the aim of starving the market of supply. Kennedy Wilson and others are lecherous entities and should be beaten out of the market with the stick of regulation in the form of reduced tax benefits (i.e. tax on vacant, habitable properties and tax on rental income at rates equivalent to individual landlords).

smurgen

So the rents of these new luxury apartments that have sprung up are too high and the proposed fix is to lift the rent cap? This place is funny.

JimmyVik

Assetbacked wrote: »

My guess is that they are kept high on purpose in order to achieve the aim of starving the market of supply. Kennedy Wilson and others are lecherous entities and should be beaten out of the market with the stick of regulation in the form of reduced tax benefits (i.e. tax on vacant, habitable properties and tax on rental income at rates equivalent to individual landlords).

I wonder how much it would be worth if you taxed the REITS in exactly the same way as normal landlords.

The_Conductor

JimmyVik wrote: »

I wonder how much it would be worth if you taxed the REITS in exactly the same way as normal landlords.

I think that the entire rental sector should be taxed in an identical manner.
I'd argue that a flatrate tax of, say, 25% of rental income, with no allowances or deductions- applied in an identical manner, across the board- would be fair and equitable.

With 356,500 private rented units in Ireland and a standardised average national rent rate of €1,129 (Jan 2019 figures, according to the RTB)- this means the private rental market is worth in the region of 5 billion- and a flatrate tax @ 25% would be worth approximately 1.25 billion to the exchequer.

I have no idea what landlords are currently paying to the exchequer (as-in- a total)- but it must be a portion of the 1.25 billion that I suggest would accrue with a 25% flatrate tax on gross rental incomes.

c.p.w.g.w

The_Conductor wrote: »

I think that the entire rental sector should be taxed in an identical manner.
I'd argue that a flatrate tax of, say, 25% of rental income, with no allowances or deductions- applied in an identical manner, across the board- would be fair and equitable.

With 356,500 private rented units in Ireland and a standardised average national rent rate of €1,129 (Jan 2019 figures, according to the RTB)- this means the private rental market is worth in the region of 5 billion- and a flatrate tax @ 25% would be worth approximately 1.25 billion to the exchequer.

I have no idea what landlords are currently paying to the exchequer (as-in- a total)- but it must be a portion of the 1.25 billion that I suggest would accrue with a 25% flatrate tax on gross rental incomes.

There is a number of houses in my sisters estate, rented to students for the academic year...strangely enough looking at the what they are charging for the rooms...they all earn under €14,000 a year.

I bet the tax man is getting none of that money...smells like rent a room scheme without the home owner actually living there

The_Conductor

c.p.w.g.w wrote: »

There is a number of houses in my sisters estate, rented to students for the academic year...strangely enough looking at the what they are charging for the rooms...they all earn under €14,000 a year.

I bet the tax man is getting none of that money...smells like rent a room scheme without the home owner actually living there

I don't think the rent-a-room scheme should get special preference either- I think *all* rental income- should get a flatrate tax on it- without exception.

neutral guy

The property on rental market will be taken by banks very easily because this is not family home.
When renters will leave renting property the property owner will have 3 choices
The first one put rent down and save property ,probably subsidising from other incomes
The second one Sell property now and earn some money ( taking difference between price ant mortgage left ) or lose money waiting until price will go down.
The third one wait for best until bank will take the property for free
I know some people who has 9-15 houses for rent
Could you imagine what gonna happen with them ?
Also,I am ABSOLUTELY sure there is additional taxes will come for landlords from new government !
The government ABSOLUTELY have take get money back which he spent during Covid disaster ( Covid payments/wage subsidies/etc ) because government spent not his money ! And have pay them back.
I could only imagine what gonna happen on short term rental market !
If property owners will not pay them mortgages the government will have spend money saving banks !

fliball123

The_Conductor wrote: »

I don't think the rent-a-room scheme should get special preference either- I think *all* rental income- should get a flatrate tax on it- without exception.

You do realise if the landlord is working there is a high possibility that they are paying 51% as rental income is taxed as normal income

neutral guy

Guys you could arguing about rents and schemes as long you would like to
But key is If people does not pay mortgage the government has save banks !
And when government will meet this problem on no mortgage payers to the bank and no renter to pay rent crossroad
The decisions will be found very easly
The only questions who will pay for it,you,me ,we all together ! Trough the motor/property taxes,higher other taxes,etc
At the moment government does not have money even for dentists and dentists stopped accept people with medical cards !
And then guys,the question will who will buy the property when we all will pay sky high taxes !

Springy Turf

The_Conductor wrote: »

I don't think the rent-a-room scheme should get special preference either- I think *all* rental income- should get a flatrate tax on it- without exception.

Well there's the rub. I know I personally would never rent a room in my home if I had to pay any tax on it. It just wouldn't be worth it.

In terms of other tax changes - the question first is what do you want houses to be used for. If you lower the tax rate for PAYE landlords, you will end up with more rental properties, and less owner occupiers. That's not something I would want to see.

The_Conductor

fliball123 wrote: »

You do realise if the landlord is working there is a high possibility that they are paying 51% as rental income is taxed as normal income

Yes- which is one reason I think a flatrate 25% tax with absolutely no allowances/deductions etc would be fair. You can do whatever the hell you want with the remaining 75% (pay the mortgage, do up the property- hell, go on holidays to Spain- whatever).

Its nonsensical that some landlords pay up to 54% on rental income while REITS get away with paying nada.

The_Conductor

Springy Turf wrote: »

Well there's the rub. I know I personally would never rent a room in my home if I had to pay any tax on it. It just wouldn't be worth it.

In terms of other tax changes - the question first is what do you want houses to be used for. If you lower the tax rate for PAYE landlords, you will end up with more rental properties, and less owner occupiers. That's not something I would want to see.

Why?
There wouldn't be any 14k limit anymore- you could earn whatever you want and just pay a flatrate tax on it. Income of 20k (not unreasonable) would net you 15k.

It has to be set at a reasonable and realistic level- but I honestly think the whole 14k rent-a-room relief should be consigned to the dustbin.

neutral guy

One guy in County Louth bought 3 beds house at 220K in 2004
Until today he probably spent over 300K for bank interest and house renovation
Today brand new house in a lot better area with a lot better quality same town cost 240K
Paying rent and saving money for house I am in stand by position
Choosing better prices during recessions/booms and getting better offers
Finally loosing same money I getting better offers
Inflation ? The minimum wage was 6.50 in 2004 now is 10 euros per hour
The breakfast roll cost 2 euros in 2004 my town now cost 4.50
The more people spend for taxes and rising food prices the less they has for property and mortgage
For that reason you will loosing money and you will never get them back same as taking mortgage for house or etc
As I said before please do not measure price level in Dublin to rest of the country

Markitron

neutral guy wrote: »

The breakfast roll cost 2 euros in 2004 my town now cost 4.50

2 euro for a breakfast roll even in 2004? Is your town in Narnia or something?

c.p.w.g.w

The_Conductor wrote: »

Why?
There wouldn't be any 14k limit anymore- you could earn whatever you want and just pay a flatrate tax on it. Income of 20k (not unreasonable) would net you 15k.

It has to be set at a reasonable and realistic level- but I honestly think the whole 14k rent-a-room relief should be consigned to the dustbin.

If it was consigned to the dustbin...I know of 3 people who would be homeless...I don't have a large circle of friend/associates nether...

Springy Turf

The_Conductor wrote: »

Its nonsensical that some landlords pay up to 54% on rental income while REITS get away with paying nada.

I often seen the top rate of PAYE tax being framed this way. I could just as easily start counting my income with my rental income first, say its tax free, and then count my salary on top of that.

Say you earn 50,000 a year from work, and 15,000 a year from my rental property:
If you start counting from the property, there is no PAYE owed on that property - but now it seems like you are being exorbitantly taxed on your work.

Realistically, the rate of tax you are paying overall is total tax / gross income.
On a gross income of 65k I pay €20k in tax, approximately 31% total.

Augeo

Augeo wrote: »

Indeed, built for corporate lets, not AirB&B etc.
From a government viewpoint with all the corporate stuff going on in that neck of the woods, accommodation to support it is/was needed.

The stock is now there and will no doubt be used for something if and when required. Having them there is far better then not IMO.

ngunners wrote: »

What does this even mean? What will they be used for? By whom?

Wouldn't 'if and when required' be right now, in the midst of a housing crisis?

They will be used for either short-term or long-term accommodation ........ I don't know what they'll be used for. They are currently on the market as rentals.

In the contect of the housing crisis you mention what should they be used for? Housing folk on the housing list? State should buy them? what exactly are you suggesting.

Mic 1972

IAmTheReign wrote: »

But large scale investors think in longer terms than 12 months.

If you have a choice in renting an apartment immediately for 1,600 or waiting 3 months to rent it at 2,000 you break even after just 15 months.

15 months @ 1,600 = 24,000
12 months @ 2,000 = 24,000

A year later and holding out for the higher rent is worth nearly 5,000.

27 months @ 1,600 = 43,200
24 months @ 2,000 = 48,000

And with the rent cap at 4% this difference gets compounded every 2 years when you can review the rent.

Correct. Once you reduce the rent you have to keep it like that and only increase by 4% when you can

neutral guy

awec wrote: »

You can see the start of it already with the 2m cut to 1m argument.

One day I was standing beside shop door telling my great wife that economy will die.She looked at me with smile on her face and said : What the difference were is the queue beside the till in shop or beside door to the shop.We passed till without usual queue and left the shop spending time as usual.

sparkledrum

I have had tenants in my property for almost 10 years. They have now decided to move back to Poland. I don't want to rent anymore, I want to sell the property. They're hoping to go mid August. Is it a really bad time to sell?

sparkledrum

They might not be too happy with the rent they were paying though...quite low!

GocRh

sparkledrum wrote: »

I have had tenants in my property for almost 10 years. They have now decided to move back to Poland. I don't want to rent anymore, I want to sell the property. They're hoping to go mid August. Is it a really bad time to sell?

Sell now before reality sinks in. August should still be ok, those with an AIP granted before COVID and still looking for a property will need to make a decision until September (on a 6-month AIP without any extension).
I'm sure banks will extend AIPs but this might come with strings attached (i.e. no longer qualifying for exceptions).