New Dail / New Taoiseach

efanton

Peregrinus wrote: »

It's the normal state of affairs that there should be more profit from renting out property than there is from lending out money; if that were not so then borrowing to invest in property would not be a viable business proposition, whereas of course it normally is.

The lower interest rates are and the higher rents are, the more sense it makes for people to borrow money in order to buy property, either to rent out (thus profiting from the difference between interest rates they pay on the borrowing and the rental rates they earn on the property) or to live in themselves (thus saving the difference between the rent they would otherwise have to pay and the interest rate they pay on the borrowing). So the current regime of low interest rates and high rental rates should in fact stimulate borrowing for property construction and purchase. If it isn't doing that, then there is some other inefficiency in the market that is preventing people from responding to the financial incentives.

I am certainly not arguing that property rental should be less profitable for landlords than simply leaving their money in a deposit account. I think everyone agree that landlords are perfectly entitled to make a reasonable return on their investment.

My concern is the increasing involvement of large financial institutions and pension funds in the Irish rental market.
It could hardly be argued that these institutions buying the vast majority of any new apartments built has been normal practice over the last 2 or 3 decades, yet that is exactly what is happening at the present time.

My concern is two fold, their potential undue influence on government policies and taxation measures, and the side effects of this new trend.

If their involvement is pushing up the cost of property for those that might wish to buy a home, and increasing the costs of rent for tenants, are they not devaluing any property tax revenue the government collects? If rents increase, the cost of the HAP scheme significantly increases and it is already costing the country an obscene €612 million a year already. If workers find they are now unable to afford to buy any property there will be an increased demand on rental property or government schemes to provide affordable housing. While the additional accommodation might be very welcome it may well turn out to be a very expensive alternative to the state providing that additional housing directly themselves or putting in measures to curb this type of investment.

With full employment, and increasing rents there could well be an increasing demand for pay rises which could result in inflation. Ireland is already one of the most expensive countries in Europe with regards to rents and mortgages, with an increasing cost of living is the country not putting its attractiveness to foreign investment at significant risk?

Peregrinus

If property values rise then returns from a (value-based) property tax go up, not down.

But, yeah, I don't think this is really about property tax. If property values rise then the impacts on homowners, landlords and tenants matter much more than the impacts on government finances. And in the present conditions in Ireland property values rising further would be unquestionably a bad thing.

But here's the real problem. What we actually want is property values to fall, so that home become more affordable. But that directly undercuts your first objective of ensuring that landlords "make a reasonable return on their investment". If property values fall so do rents, and that will be painful for landlords, particularly those who invested at current high values. There's no easy solution to this that doesn't involve signficant public expenditure.

Sam Russell

When companies were withholding profits and not distributing them, Governments introduced Corporation Tax which required companies to pay tax on those profits which was then given as a relief to shareholders when those profits were distributed.

The same could be done with capital gains on rental properties held by corporations, such that gains were taxed in the current year and not on disposal. This would make capital gains as no longer an issue in valuing rental returns, so making large investments unattractive.

Of course, the biggest problem in the rental market is the total absence of security of tenure. If tenants pay the rent and are responsible wrt social behaviour, then they should have security of tenure. The landlord must guarantee that, so selling is 'tenant unaffected', and refurbishment requires the landlord to provide suitable temporary accommodation.

If we are to be a home owning democracy, we need to provide for those who cannot, or do not wish to, provide for themselves. I would estimate that those who will be providing for themselves to be about 70% of the population. Thus the state should provide social housing for at least 30% of the population, with rents set at 'market' rates for those able to pay it. This implies the state should be building social house, and affordable houses, every year to keep up with the increase in the population. Historically, they have provided next to no social housing.

Runaways

We’ve screwed up before. Building massive housing projects like Ballymun and Tallaght and then neglecting to put anything there not even the basics. Ballymun only had a shopping center up until relatively recently. Tallaght got the square early 90s? This Naturally creates huge social problems like drugs crime and vandalism.
You can and should build social housing right now as a matter of urgency but finding the necessary services and amenity infrastructures is a whole other nightmare.

I’d like to think thats what’s holding it all up but we know it isn’t that. They havent even gotten to that thought yet.
It’s about propping up the market and letting it swell until it inevitably bursts *again*

All in the name of profit now, stress about it later. This is govt policy unwritten but it is.

efanton

Peregrinus wrote: »

If property values rise then returns from a (value-based) property tax go up, not down.

But, yeah, I don't think this is really about property tax. If property values rise then the impacts on homowners, landlords and tenants matter much more than the impacts on government finances. And in the present conditions in Ireland property values rising further would be unquestionably a bad thing.

But here's the real problem. What we actually want is property values to fall, so that home become more affordable. But that directly undercuts your first objective of ensuring that landlords "make a reasonable return on their investment". If property values fall so do rents, and that will be painful for landlords, particularly those who invested at current high values. There's no easy solution to this that doesn't involve signficant public expenditure.

No its not just about property tax, I was looking at the bigger picture.
What is the point of collecting more revenue, if at the same time you have to spend more than the increased revenue taken to keep the show on the road.

Surely the issue is not the rents that landlords charge it is the costs incurred before they make profit.

Buy any new property at the moment and between all the different taxes, fees and stamp duty the government grabs nearly 50% of the price paid.
Reduce that 50% take to a 30% take and suddenly thousands of people find themselves able to afford mortgages that could never have dreamed of owning their own home previously.
Similarly with rents. The government grabs 23% in VAT.

To me the whole situation is ludicrous. The government is quite happy not to tax many foods at at all, and tax foods bought from a restaurant or takeaway at 13%.
The government reduces taxation to the lower band of 13.5% for services it deems necessary for a healthy economy such as fuel, electricity, the hotel industry and the well being of its citizen in areas like the arts, museums, musical performances and cinema's.

To make matters worse it recognises that the building industry is vital and charges them only 13.5% as well.
Surely there's a really strong case to reduce VAT on rents to a similar level or even the 9% band. Yes there will be a significant loss in revenue, but surely the the reduction of additional costs the government faces in housing, such as the HAP scheme, affordable housing schemes and emergency accommodation would, or to a large degree, be offset by this loss.

It seems the government is also a key player in driving up property costs, whether that be purchase or rental, beyond what is sustainable.

Surely housing should be considered in a similar way to fuel, food, electricity or other essential services and taxed at a far lower level. This is one of my fundamental reasons for disagreeing with property taxes. More than enough tax has already been collected and they only serve to dramatically increase the cost of living to a large section of the population.

Good loser

efanton wrote: »

No its not just about property tax, I was looking at the bigger picture.
What is the point of collecting more revenue, if at the same time you have to spend more than the increased revenue taken to keep the show on the road.

Surely the issue is not the rents that landlords charge it is the costs incurred before they make profit.

Buy any new property at the moment and between all the different taxes, fees and stamp duty the government grabs nearly 50% of the price paid.
Reduce that 50% take to a 30% take and suddenly thousands of people find themselves able to afford mortgages that could never have dreamed of owning their own home previously.
Similarly with rents. The government grabs 23% in VAT.

To me the whole situation is ludicrous. The government is quite happy not to tax many foods at at all, and tax foods bought from a restaurant or takeaway at 13%.
The government reduces taxation to the lower band of 13.5% for services it deems necessary for a healthy economy such as fuel, electricity, the hotel industry and the well being of its citizen in areas like the arts, museums, musical performances and cinema's.

To make matters worse it recognises that the building industry is vital and charges them only 13.5% as well.
Surely there's a really strong case to reduce VAT on rents to a similar level or even the 9% band. Yes there will be a significant loss in revenue, but surely the the reduction of additional costs the government faces in housing, such as the HAP scheme, affordable housing schemes and emergency accommodation would, or to a large degree, be offset by this loss.

It seems the government is also a key player in driving up property costs, whether that be purchase or rental, beyond what is sustainable.

Surely housing should be considered in a similar way to fuel, food, electricity or other essential services and taxed at a far lower level. This is one of my fundamental reasons for disagreeing with property taxes. More than enough tax has already been collected and they only serve to dramatically increase the cost of living to a large section of the population.

Your last para (at least) is nonsensical.
You seek, or so you say, to have housing taxed at 'a far lower level' than fuel, food and electricity.
But in fact you want housing taxed at nil.
Taxes are collected effectively to transfer wealth/income from the better off to those poorer. The adjustment of tax rates is always subject to intense political scrutiny and the annual budget allows rates to be varied as the political forces decide.

hotmail.com

It seems almost inevitable that it's going to be a FF/FG government.

I get the impression that the Greens will be left out because of their demands and the two parties will be supported by about 8 or 9 independent TDs, who are basically FF or FG anyway. They will probably demand cabinet or junior ministerial positions.

efanton

Good loser wrote: »

Your last para (at least) is nonsensical.
You seek, or so you say, to have housing taxed at 'a far lower level' than fuel, food and electricity.
But in fact you want housing taxed at nil.
Taxes are collected effectively to transfer wealth/income from the better off to those poorer. The adjustment of tax rates is always subject to intense political scrutiny and the annual budget allows rates to be varied as the political forces decide.

No I dd not say that.

I said housing should be taxed at lower levels. Whether that includes a property tax or not is immaterial.
If the government reduced VAT then I see no reason why the LPT could no remain. If they choose not to reduce VAT but still insisted on LPT then they are simply scoring an own goal. If they scrapped LPT then they are to some small degree relieving the burden on those that can leat afford to pay that tax. My point is simply the government is extracting far too much tax from either the prospective home owner or those forced into renting property because they do not qualify for a mortgage.

The bottom line is taxation is now the difference between thousands of prospective home owners affording a home, renting property in the private rental market, or using government schemes such as HAP or the schemes to allow first time buyers to actually purchase a home. If these schemes are costing so much money,which they are for 2019 the costs were HAP €612 million, emergency housing €170 million, or the Help-to-Buy scheme cost €256.5 million, in total well over €1 BILLION every single year and rising, is it not time to actually reduce the cost of housing through reduced taxation, ( for those that wish to buy or those that wish to rent), rather than spend billions fixing the effects of an overpriced (or over taxed) market.

Runaways

I will never ever ride to Leo or Michaels defence.
They have plenty in their paid employ to do that as evidenced here.
But Arlene Foster today criticizing Varadkar for not consulting her on and implementing an all island response to the virus emergency really really takes the biscuit.
The absolute neck.

Same Arlene that refused repeatedly to engage in an all island brexit strategy.

Control of Northern Ireland needs taking out of such redundant retarded minds.
If it’s not no no never never, it’s finger pointing and blaming.

It’s got to stop.

Water John

I presume if NI want to implement our protocols, the UK PM won't stop them.

Runaways

Water John wrote: »

I presume if NI want to implement our protocols, the UK PM won't stop them.

That’s the crazy part. She was like a broken record saying NI will not diverge from the UK in any way in brexit. Now? Singing a very different tune. She’s hopeless.

Also the RHI report is out this weekend I think? She’s not long for the leadership I’d say

a very cool kid

Runaways wrote: »

That’s the crazy part. She was like a broken record saying NI will not diverge from the UK in any way in brexit. Now? Singing a very different tune. She’s hopeless.

Also the RHI report is out this weekend I think? She’s not long for the leadership I’d say

Arlene is a battleaxe this is confirmed.

Sinn Féin supporting her til they saw which way the wind was blowing was actually a bit of a surprise.

mr_fegelien

Can someone clarify the difference between the Dail and the Government?

Also do government ministers have to be in the Dail?

L1011

mr_fegelien wrote: »

Can someone clarify the difference between the Dail and the Government?

Also do government ministers have to be in the Dail?

Government = Taoiseach and Ministers

Ministers need to be in the Dáil or Seanad (with a limit on numbers and roles allowed) when appointed but retain their right to address the Dáil even if they lose their seats until a new Minister is appointed.

blanch152

Runaways wrote: »

That’s the crazy part. She was like a broken record saying NI will not diverge from the UK in any way in brexit. Now? Singing a very different tune. She’s hopeless.

Also the RHI report is out this weekend I think? She’s not long for the leadership I’d say

That report has shown up how inept, self-centred, stupid and incompetent all of Northern Ireland’s political parties are. Don’t let any of them near government down here.

BonnieSituation

blanch152 wrote: »

That report has shown up how inept, self-centred, stupid and incompetent all of Northern Ireland’s political parties are. Don’t let any of them near government down here.

So they're only good enough for Irish people "up there"?

We should send our politicians north to show them how proper corruption is done.

Remember when the English came over to show us how to govern ourselves?

coastwatch

The Green Party need to cop on quickly.
It's reported this morning that they are expected to withdraw from Government formation talks because they believe funding for climate change action programs will be re-directed to fight the corona virus.

They need to realise they are now becoming more irrelevant by the day.
The corona virus pandemic is taking care of climate change actions,
- No international flights
- No Cruise Ship voyages
- Reduced motor vehicle and public transport use
- Reduced non-essential production and consumption
and on, and on.

Wanderer78

coastwatch wrote:

They need to realise they are now becoming more irrelevant by the day. The corona virus pandemic is taking care of climate change actions, - No international flights - No Cruise Ship voyages - Reduced motor vehicle and public transport use - Reduced non-essential production and consumption and on, and on.

This virus will pass, humans could be dealing with climate change issues indefinitely

Field east

coastwatch wrote: »

The Green Party need to cop on quickly.
It's reported this morning that they are expected to withdraw from Government formation talks because they believe funding for climate change action programs will be re-directed to fight the corona virus.

They need to realise they are now becoming more irrelevant by the day.
The corona virus pandemic is taking care of climate change actions,
- No international flights
- No Cruise Ship voyages
- Reduced motor vehicle and public transport use
- Reduced non-essential production and consumption
and on, and on.

Have the Greens made a Hugh mistake in withdrawing from gov formation discussions- although Eamon Ryan has not come out public ally yet to explain the decision. Coelision gov is all about compromise AND it is also about having more than a passing interest in the major issues of the day - in our case it would be health, housing and education at least. From what I can gather - because the Greens reckon that there will be no money available over the next few years for their ‘green’ policies they have no interest in being government. The Greens have let the ‘cat out of the bag’ by basically saying that they have no interest in health, housing and education.
Another point in relation to the Greens is the best party combination to form a stable government. Given all that is going on a FF, FG and the Greens seems to be by far the best option. although that could all change if There is a coup re getting MM out.
Are the Greens putting the party first and Fcuk the country?
In case the Greens are worried there are presences out there where some parties /party leaders put the country first and from a country perspective it paid off eg
(1) The Tallagh Strategy re supporting a Haughy gov.- although A Dukes got shafted over it
(2) Labour going in with FG after the 2011 general election. A FF /FG coelision was out of the question for a number of reasons but especially because , as they say FF was seen as TOXIC at the time. This produced a stablegov that managed the country out of a deep recession. Labour did not ‘get’ thanked as it lost seats in the next election
(3) FF assisted the outgoing FG led government through a ‘ confidence and supply’ arrangement. Again it was the only arrangement that was possible if the lead party was to have a good chance of implementing its policies- most of them and to provide a stable government. FF ‘stepped into the breech’ to play its part in running the country and got hammered for it in the last election - as did FG

All above governments LASTED THEIR FULL TERMS.
If the above is true re the Green’s position re entering government or otherwise , they should not be very surprised if they lose a big number of seats in the next election - more than if they enter government

Runaways

Think it was the IT inside politics podcast during the week said someone in the greens told him they got badly burned last time and no way they’re going in again only to carry the can.

Corona has upended everything so I’d reckon a national government is the only logical way forward now. That way they all get to avoid having to be accountable and all equally to blame.
Won’t happen though as we know.

Good loser

I generally support FG. Think the current cabinet was the best I've seen - in a long life.


They've played a blinder on the virus so far - Leo, Coveney, Paschal and Harris.

Water John

Yes they have, Irish politicians generally perform very well in any focused issue.

tikkahunter

Good loser wrote: »

I generally support FG. Think the current cabinet was the best I've seen - in a long life.


They've played a blinder on the virus so far - Leo, Coveney, Paschal and Harris.

They really are , slowly bringing the country into lockdown is the best policy. You see what way people have reacted so far - some are animals. I do have confidence in them . Where are all the SF mouths now we have a pandemic? Hiding under their rock , look at the state of them up the north .Why would anyone think they could run a country.

beggars_bush

Need to get a government in place asap

Couldn't care less who is around the table

landofthetree

Runaways wrote: »

Think it was the IT inside politics podcast during the week said someone in the greens told him they got badly burned last time and no way they’re going in again only to carry the can.

Corona has upended everything so I’d reckon a national government is the only logical way forward now. That way they all get to avoid having to be accountable and all equally to blame.
Won’t happen though as we know.

Another election is certain later in the year if we are back to austerity.

Its only right that the parties all put forward new manifestos if the crisis continues for months.

SF will have to adjust their plans to spend 25billion more per year by 2025.

James Brown

Good loser wrote: »

I generally support FG. Think the current cabinet was the best I've seen - in a long life.


They've played a blinder on the virus so far - Leo, Coveney, Paschal and Harris.

I'd like to think the brains behind it are not Leo, Coveney, Paschal and Harris.

James Brown

landofthetree wrote: »

Another election is certain later in the year if we are back to austerity.

Its only right that the parties all put forward new manifestos if the crisis continues for months.

SF will have to adjust their plans to spend 25billion more per year by 2025.

A worldwide pandemic and volatile stock market would do that alright.

Runaways

If only we had a spare €13 billion lying around that we won’t take even though it’s owed

Field east

beggars_bush wrote: »

Need to get a government in place asap

Couldn't care less who is around the table

In the short term at least , as they say ‘ do’nt fix it if it’s not broken’

James Brown

Runaways wrote: »

If only we had a spare €13 billion lying around that we won’t take even though it’s owed

I was watching a documentary on billionaires yesterday. Sad to see Ireland highlighted as a country enabling companies to dodge taxation at home.