Irish Property Market chat II - *read mod note post #1 before posting*

Bass Reeves

https://www.boards.ie/discussion/comment/120607120#Comment_120607120

It's hard to tell yet as properties bought in January/ February will probably be only going through finalisation now.

Bakharwaldog

https://www.boards.ie/discussion/comment/120607120#Comment_120607120

6th monthly decrease in property prices in Dublin in a row. Interestingly houses saw a larger monthly drop than apartments. Last time we saw 6 months of decreases was in 2008 and that led to 33 months of monthly decreases.

Expect to see media outlets only quote the headline YoY growth figure of 1.7% (for better or worse)

EDIT: I was wrong https://www.independent.ie/business/personal-finance/property-prices-fall-for-third-month-in-a-row/a1276061782.html

Also of note is that February saw the highest volume of Dublin second hand sales since records began in 2010 and highest January volume since 2014

DataDude

https://www.boards.ie/discussion/comment/120607142#Comment_120607142

Two things in Ireland are true:

We have one of the most progressive income tax systems in the world with an incredibly narrow tax base where a smallish number of high earners pay for everything.

We have the highest level of under occupied homes because of older people with low incomes living in massive houses too big for their needs.

Your proposal has negative implications for both. Force all the younger high earning couple with families out of their big homes because they can’t afford to pay crippling income and property taxes. Older people in €2m houses in Dalkey exempt as they have low incomes.

Ireland is already bleeding high income earners for everything. There’s only so much blood you can take from this cohort - well proven around the world. It’s very easy to just pick an arbitrary income point (usually a point above where the proposer earns funnily enough) and say tax them more. There’s unlikely to be any other country in the world where someone on €200k+ pays so much income tax for such crap public service. And if they lose their jobs, social welfare not even linked to their income despite PRSI being paid on the full amount.

We earn in the €300k+ territory and if I was landed with a further €45k tax bill every year to go on top of my €150k+ income tax bill - I’d be booking the plane ticket tomorrow, as would many in my boat I expect.

DownByTheGarden

https://www.boards.ie/discussion/comment/120607227#Comment_120607227

So true. So much so that myself and my wife have decided to go on the dole for a couple of years. Sick of paying so much tax. Feel like im working for the state. Might as well let them pay some of it back now and have 40 hours each back to ourselves every week.

JohnnyChimpo

https://www.boards.ie/discussion/comment/120607271#Comment_120607271

Bet you didn't

combat14

https://www.boards.ie/discussion/comment/120607225#Comment_120607225

persistent high inflation coupled with high house prices and multiple rate rises definitely hitting some would be buyers

recent job insecurity in tech industry etc. may also be affecting some buyers

DownByTheGarden

https://www.boards.ie/discussion/comment/120607431#Comment_120607431

Bet I did :)

Villa05

https://www.boards.ie/discussion/comment/120605142#Comment_120605142

Profit for bank, investment fund, developer, builder.

State has money coming out it's ears and is perplexed about what to do with

Government number 1 and 2 priority is housing and inflation

Housing is the greatest cost for most families up and down the country

What is the definition of clueless?

DownByTheGarden

https://www.boards.ie/discussion/comment/120607489#Comment_120607489

Agree that inflation has to have some effect. Especially as high as it has gone.

But tech jobs are not in trouble at all. Anyone in tech who has lost their job so far - the only reason they wont have a new job already is if they dont want one.

FernandoTorres

We're getting close to the point where the Irish Times are no longer going to be able to use the 12 month change to frame the narrative of prices increasing. I'm not sure what they're going to do!

Villa05

https://www.boards.ie/discussion/comment/120607227#Comment_120607227

How would you feel about a reduction in your paye to offset a rise in property tax.

Rebalance taxation between land labour and capital. Labour is by far carrying too much of the load

fliball123

https://www.boards.ie/discussion/comment/120607120#Comment_120607120

Another monthly price drop of .6% have yet to drill into the report but if Dublin prices drops this would make it 6 months in a row that Dublin property prices have dropped.

fliball123

https://www.boards.ie/discussion/comment/120607188#Comment_120607188

Prices are dropping do so they if they keep waiting they may save themselves a nice chunk of change

Nermal

https://www.boards.ie/discussion/comment/120607733#Comment_120607733

A 1% property tax would raise about €7B a year.

We could cut income tax rates by a quarter.

DataDude

https://www.boards.ie/discussion/comment/120607733#Comment_120607733

Would hugely support this and true wealth taxes over incomes clearly has tonnes of advantages. Concerns I’d have:

Most people comically undervalue their homes for the current property tax calculation (it’s so irrelevantly small anyway that this hardly matters). This would need to be more tightly enforced or else it would be a very unfair tax.

There would be countless sad stories. ‘My state pension won’t cover the tax bill on my house on Ailesbury road’ ‘I inherited my parents house in Ranleagh but I’m a single mum’ etc. For the tax to be taken seriously you’d need to be able to take the property to pay it. As unlike income tax it can’t be deducted at source.

Zero chance that is happening so then you’d end up with tax deferrals sitting against the property for decades unpaid waiting for the person to pass away which poses other cashflow problems.

fliball123

https://www.boards.ie/discussion/comment/120607847#Comment_120607847

Hows about no more taxes until our spend side is sorted I find it funny people think there is only one way to go in this country the powers that in control are wasting billion after billion and our solution is tax more or differently?

dontmindme

https://www.boards.ie/discussion/comment/120607805#Comment_120607805

Is there actual price drops or are the 'drops' being reported a drop in the rate of price increase growth?

fliball123

https://www.boards.ie/discussion/comment/120607916#Comment_120607916

Actual price drops and not a drop in the amount that prices were going up - Property prices in Dublin are about 2.5 - 3% less than this time 6 months ago.

Bakharwaldog

https://www.boards.ie/discussion/comment/120607916#Comment_120607916

Actual drops. According to CRO data, a property will cost you ~3% less today than what it would have cost in September 2022

Blut2

https://www.boards.ie/discussion/comment/120607171#Comment_120607171

You seem to be ignoring the other examples in my post. Would you call France a low income tax country? You absolutely can have high income tax and property taxes, as plenty of countries around the world have today.

Even in the US, a household in New Jersey (to use one of my listed examples, with a yearly property rate of 2.49%) with an income of $300k pays a tax rate of 35% on income. An Irish household earning €300k pays an equivalent of 44%. Not a million miles off, and the lower income tax, and higher tax on property, is surely much more beneficial to society. We'd be much better off taxing people's unproductive assets, rather than taxing them for working harder and getting promotions/higher pay.

And property tax is even better in that non-tax residents would still have to pay it, theres no escaping it. They'd actually have to contribute to local services. As well as other benefits like encouraging downsizing etc.

Beigepaint

https://www.boards.ie/discussion/comment/120607871#Comment_120607871

Non stop nonsense out of you.

Danny McCoy says the state should be bigger.

He's right, you're wrong.

https://www.irishtimes.com/business/2022/09/17/ibecs-closet-social-democrat/

Blut2

https://www.boards.ie/discussion/comment/120607227#Comment_120607227

Higher property taxes have been empirically shown to do literally the opposite of what you're suggesting. They encourage older people, who've kids have moved out, to downsize.

The immigration/emigration statistics are also very clear, Ireland is not bleeding high income earners - we still have net immigration even at the top income levels.

Most of wealthy Europe has higher marginal tax rates than Ireland at the high end of income - 55% in Denmark, France, Austria etc. With higher PRSI equivalents on top too. If you want to move to another country where you can earn €300k as a household and pay lower income taxes than Ireland you're going to struggle hugely. Which is why despite moaning about high earners being taxed too much in Ireland very few actually do move.

As I said in my last reply, the issue of foreign money buying Irish property is only accelerating. And will reach Vancouver/London destructive proportions if no measures are taken to restrict it. So short of higher property taxes, which you apparently object hugely to, what better, more effective, solution would you offer instead?

DataDude

https://www.boards.ie/discussion/comment/120608121#Comment_120608121

You’ve exempted everyone with a household income under €100k from this tax which is why it wouldn’t hit any older people!

I’m hugely supportive of higher property taxes but your proposal to link it to income tax is the stupid bit as they are already so progressive as is.

in terms of what I’d do, you could increase stamp duty massively but have it able to be fully offset against income tax paid in Ireland. Would deter foreign money but simultaneously support those actually working and paying tax in Ireland

fliball123

https://www.boards.ie/discussion/comment/120608104#Comment_120608104

Really I think most intelligent people would agree that our spending is an absolute joke. Just a little sample of the waste going on.

https://www.independent.ie/irish-news/state-waste-of-10bn-in-10-years/26326371.html

https://www.independent.ie/opinion/our-shameful-legacy-of-waste-and-incompetence/30953852.html

https://www.joe.ie/news/five-big-wastes-of-public-money-7951

https://www.pbp.ie/government-continues-to-waste-public-money-on-irish-water/

https://www.facebook.com/watch/?v=167650395469148

Not to mention other things like the price tag on the children's hospital or paying politicians 3/4 pensions no matter how competent or bailing out banks that were not systemic but the boyos buddies had to be bailed out, or what about Nama put the properties in here and anything decent cherry picked and sold for a pittance to insiders. How's about the amount we spend on our HSE and when you visit a hospital here its in an absolute dire condition so much so most third world countries would be ashamed of it. Yeah but you keep banging your drum that we need more taxes so the lads can keep burning through it. I think most educated people on here would agree the vast majority of people pay more than enough in taxes and get a p1ss poor return with regards to services for it and its time to take a microscope out and find out where our cash goes and get some accountability.

DataDude

https://www.boards.ie/discussion/comment/120608121#Comment_120608121

Also, comparison to Scandinavian countries is pointless due to the public service and social benefits they receive.

A person earning 300k in Ireland will pay more income tax than almost any non Scandanavian country in Europe. Massively more than UK and Germany. More than France. I’d struggle to think of any where you would pay a higher total tax.

combat14

interesting to see the famous brennan brothers have decided that now is the right time to pull the plug and get out of the irish hotel business

RTÉ’s At Your Service experts Francis Brennan and brother John put Kenmare hotels on market for €20.5m

https://m.independent.ie/irish-news/rtes-at-your-service-experts-francis-brennan-and-brother-john-put-kenmare-hotels-on-market-for-205m/a1830068034.html

Blut2

https://www.boards.ie/discussion/comment/120608291#Comment_120608291

This is wildly factually incorrect. Someone in Ireland earning €300k has an effective tax rate of 47%. In France it would be 53%, in Belgium 58%, the Netherlands 47%, etc. Not even touching on Scandinavia which also has higher taxes than Ireland, which is exactly why it has better public service and social benefits - the state can afford to pay for them. The statistics are very clear that Ireland is a low tax country in wealthy Europe.

The only EU countries with significantly lower tax burdens on high earners are also significantly lacking in high earning jobs. Good look trying to earn €300k a year in Greece or Bulgaria for example. Which is why the emigration/immigration statistics for high earners speak for themselves - for all the people moaning on the internet, in the real world more high earners are still moving to Ireland than leaving every year.

Blut2

https://www.boards.ie/discussion/comment/120608202#Comment_120608202

But, again, even in countries with exemptions for low earners higher property taxes have been empirically proven to result in more downsizing. So your theory is completely wrong.

Some sort of income tax link is the only way higher property taxes are going to be electorally possible in Ireland, unfortunately. No party is going to bring in a measure which hits struggling households.

Stamp duty is over 8% for non-resident buyers in the UK and it hasn't deterred foreign buyers in London. Its too easily written off as a once-off charge to properly discourage buying properties as long term investments. Over a 10-30 year period it averages to a negligible total cost to the investment. A yearly property tax does far more to discourage this because it hits every year, and rises as the value of the property does too - so it has a much bigger impact on the investment value.

OEP

https://www.boards.ie/discussion/comment/120606938#Comment_120606938

This isn't really true though. Desirable houses in desirable areas hold their value better than others - and these and the ones people typically want to trade up into

DataDude

https://www.boards.ie/discussion/comment/120608461#Comment_120608461

The three countries in the Europe where high salaries are as readily available as Ireland are Germany, Switzerland, UK. All have materially lower effective tax rates than Ireland at that level. It’s consistently cited as a barrier to inward investment. The reason we have so many high earners coming in is corporation tax levels, any suggestion it’s due to low income taxes is clearly a lie. Not seeing where you’re getting your figures for France.

How a tax could encourage downsizing when you exempt the vast majority of people from it literally make no sense. Unless your thresholds are too high, I suspect less than 1% of older people declare taxable income in excess of €100k per year.

Id support higher property taxes fully refundable against income tax which would give you the foreign investor deterrence you crave. It would also actively promote downsizing as low income high wealth households (typically older) would be forced to take action.

Putting in an exemption for sub €100k income means it will raise basically 0 revenue so you’re just piling it on to foreign investors (fine, behaviour deterrent which is what you want) but also high income earners who already prop the country up as is.

You will find countless independent research stating Ireland has THE most progressive income tax structure in the EU.

Your desire to limit foreign investment is sensible, but how you’ve proposed it be structured is quite clearly bonkers.