All Homes to be re-valued for Property Tax in November 2021

Jizique

Darc19 wrote: »

Isn't almost everything paid out of after tax income?

In your example, your child will be very well off having €625,000 net cash handed to them.

But with a mortgage of 750,000, you would need to be on a salary of circa 180,000 so I would suspect that you'd have built up a decent pension too where the contributions were from your gross earnings and saved you 40% in taxes.

Of course we could return to high levels of stamp duty. That 750k house in 2007, unless new, would have had stamp duty of €45,000.

That was unfair and the property charge came in to replace that.

Where are you getting the idea of my salary? I may have been able to make a turn of €100k on my first small apartment and save an extra €100k over a decade, €10k a year is not outrageous.
I end up with a mortgage of perhaps €500k, in a house I can’t afford but for my prior equity.

And I’m not sure what that has to do with pension tax benefits; if I am paying a 750k mortgage I am hardly lumping AVCs into the pension

Klaudia.

I'm very surprised so many people here think the property should be taxed. I don't see any reason why. Especially in new estates with management companies. It's like paying double. And we don't get anything from it.

Geuze

The LPT changes will raise an estimated extra 70m.

jester77

tjhook wrote: »

The health insurance for my family isn't that good. If it was, it would cost a lot more. Whereas with the German system, as well as a ceiling on contributions, I would expect my contributions to to cover/insure the family.

I've health insurance in Germany, well everyone has as it's compulsory, and my family are not covered directly. I pay €650 a month on my plan, one of the cheaper ones, and my kids are extra on top of that. I have to cover the first €600 of costs in a calendar year before I can start claiming.

Geuze

Klaudia. wrote: »

I'm very surprised so many people here think the property should be taxed. I don't see any reason why. Especially in new estates with management companies. It's like paying double. And we don't get anything from it.

The vast majority of analysts agree that property taxes are sensible.

You will struggle to find an economist against a property taxes.

The advantages of property taxes over other taxes are well known.



You do get local public services.

Furze99

Klaudia. wrote: »

I'm very surprised so many people here think the property should be taxed. I don't see any reason why. Especially in new estates with management companies. It's like paying double. And we don't get anything from it.

Local services - that make your neighbourhood and area more pleasant to live in.....

.42.

Furze99 wrote: »

Local services - that make your neighbourhood and area more pleasant to live in.....

But it wont be used for local services.

The same as Motor tax is not used for road infrastructure.

L1011

.42. wrote: »

But it wont be used for local services.

The same as Motor tax is not used for road infrastructure.

LPT goes to the council, not the exchequer.

Motor tax has not been ringfenced for road infrastructure for decades but the cost of road infrastructure exceeds that collected in motor tax anyway.

Calahonda52

Geuze wrote: »

The LPT changes will raise an estimated extra 70m.

It more about getting all houses in the net at this juncture

.42.

L1011 wrote: »

LPT goes to the council, not the exchequer.

Motor tax has not been ringfenced for road infrastructure for decades but the cost of road infrastructure exceeds that collected in motor tax anyway.

So all the LPT collected in Kildare will go to Kildare CC?

L1011

.42. wrote: »

So all the LPT collected in Kildare will go to Kildare CC?

Currently 20% goes to an equalisation fund which is distributed amongst councils, but that is going to stop in 2023 I believe. The other 80%, to be 100%, goes to the council.

Geuze

.42. wrote: »

But it wont be used for local services.

The same as Motor tax is not used for road infrastructure.

Motor tax was, until recently, paid into the LGF.

https://www.gov.ie/en/publication/118d0-local-government-finance/#local-government-fund

The LGF then made grants to LA, for example:

The government decides the expenditure from the Local Government Fund each year as part of the budgetary process. In recent years, expenditure from the Local Government Fund includes:

• payments to the Department of Transport for non-national roads and public infrastructure
• a subvention to Irish Water
• Local Property Tax allocations to local authorities
• funding for certain local government initiatives
• payment to the Exchequer

https://www.gov.ie/en/collection/128be-local-government-fund-accounts/


Motor Tax is used to finance regional and local roads.


Take 2017, the Motor Tax of 1bn went into the LGF.

Then the LGF paid roads grants to LA of 345.5m.

Now, what you can say is: not all of motor tax is spent on regional and local roads, that is true.

However, bear in mind that there are also national roads to be paid for.

Sarn

Interestingly, if the proposed bands go ahead, we’ll end up paying less LPT, at least according to what the bank’s valuation valued our home at last year.

Of course, if large increases in prices are reported by end of year, that will push us into the next band. From my perspective, basing the value on an independent valuation looks like a good place to start!

lawrencesummers

There is no requirement in you to get an up to date valuation, and the government doesn’t have one either to dispute your valuation should you choose a different category.

I live in an estate and there can be 100k difference from one house to the next if they have been updated over time.

No revenue officer is going to inspect peoples houses to that level and no revenue officer is qualified to do so either.

Put your own valuation on it and change the category if necessary. It’s essentially an opinion that decides your category.

Sarn

I agree, it is more a case of already having a favourable valuation to back up my own, in the event that it is queried. Definitely not worth paying to get one done.

Deub

Bubbaclaus wrote: »

You are missing the key point there. Being that they need to pay out dividends each year of 85% of the income to qualify as being a REIT. And those dividends can be taxed at up to 55% in the hands of the shareholder.

So saying the REIT does not pay tax and leaving it at that with no further information is misleading.

You should let the Revenue know that the introduction paragraph of their PDF about REITs is misleading because I took it there and there is no mention of the 85% rule.

I am not sure why you mention shareholders paying tax on dividends as it has no relation with the tax paid by REITs.

It would be interesting to know what is the percentage of REITs paying corporate tax.

cunnifferous

I'm due to move in to new build in Jan 2022. Does that mean I will miss the valuation deadline in November and not have to pay LPT until 2023?

Jerry Attrick

lawrencesummers wrote: »

There is no requirement in you to get an up to date valuation, and the government doesn’t have one either to dispute your valuation should you choose a different category.

No revenue officer is going to inspect peoples houses to that level and no revenue officer is qualified to do so either.

Of course not! Revenue will be quite be content to wait until the house is eventually sold and will then check whether it was valued realistically for LPT purposes. And if not, that's when LPT arrears plus compound interest will click in!

(Of course they also have state of the art data mining software that can run checks and spot exceptions. For example that 99 houses in a given estate are valued at around €500K but one is valued at only €25,000!)

Jerry Attrick

cunnifferous wrote: »

I'm due to move in to new build in Jan 2022. Does that mean I will miss the valuation deadline in November and not have to pay LPT until 2023?

Yes.

If a residential property isn't inhabitable by November of a given year, then it's not liable for LPT.

elperello

L1011 wrote: »

Currently 20% goes to an equalisation fund which is distributed amongst councils, but that is going to stop in 2023 I believe. The other 80%, to be 100%, goes to the council.

Correct except the balancing fund will continue to top up councils who need it but the money will come from central funding.

Jeremy Sproket

In NI, Sweden and other jurisdictions the property tax you pay actually goes to local amenities and every penny is accounted for. Local authorities deal with local taxation and local councillors are answerable to local people.

In some jurisdictions, your local property tax funds regular street sweeping (which only happens in a handful of towns here, and very rarely at that), it funds upkeep of the roads and in some cases funds rubbish collection.

I don't mind paying if we could just have some accountability for the money being collected. Can we at least have a table of money in vs money out with accountability for the money being spent?

Jeremy Sproket

There are just over 2 million homes in Ireland. Let's conservatively estimate that half are privately (i.e., not council owned). So, 1 million

The average 3-bed semi D (let's assume this is the median home here) is €235,028. This will attract a LPT of €405 per anum.

So that's €405,000,000 being taken in. Where's the money going?


https://www.realestatealliance.ie/rea-average-house-price-per-county-p7025

https://www.citizensinformation.ie/en/money_and_tax/tax/housing_taxes_and_reliefs/local_property_tax.html

https://www.cso.ie/en/releasesandpublications/ep/p-cp1hii/cp1hii/hs/#:~:text=Ireland%27s%20housing%20stock%20in%202016,occupied%20by%20guests%20or%20visitors.

elperello

Jeremy Sproket wrote: »

In NI, Sweden and other jurisdictions the property tax you pay actually goes to local amenities and every penny is accounted for. Local authorities deal with local taxation and local councillors are answerable to local people.

In some jurisdictions, your local property tax funds regular street sweeping (which only happens in a handful of towns here, and very rarely at that), it funds upkeep of the roads and in some cases funds rubbish collection.

I don't mind paying if we could just have some accountability for the money being collected. Can we at least have a table of money in vs money out with accountability for the money being spent?

I've seen similar in parts of the US.

It's a sort of pr for the tax and is intended to make people feel less resentful about paying it.

looksee

Using the map to get a value (identifying the houses) the house that I sold two years ago is valued at significantly less than I got for it, and the house that I bought, also on the map, is valued at considerably less than I paid for it. The map does not appear to differentiate between a cottage and a McMansion.

Geuze

Jeremy Sproket wrote: »

I don't mind paying if we could just have some accountability for the money being collected. Can we at least have a table of money in vs money out with accountability for the money being spent?

Here you go:

http://localauthorityfinances.com/

https://www.gov.ie/en/collection/e103b-local-authority-annual-financial-statements/

2018 AFS:
https://assets.gov.ie/111373/7750e0e0-c042-4064-9f65-94893686d81c.pdf

Geuze

Jeremy Sproket wrote: »

So that's €405,000,000 being taken in. Where's the money going?

hERE ARE the 2021 allocations:


https://assets.gov.ie/111328/8aa6405b-6d9e-475f-b2b1-b9253dfffffe.pdf

Geuze

Jeremy Sproket wrote: »

So that's €405,000,000 being taken in. Where's the money going?

2021 = 492m estimated yield, before the Local Adjustment Factor LAF

LAF = cllrs can vote to change by up to +/- 15%

20% into equalisation fund = 98.4m
80% kept in each LA = 393.6m


Equalisation fund is topped up by central Govt to 133.5m, paid out to the 20 weaker LA, to bring them up to their baseline.

The councils that have a surplus over the baseline can keep some of the surplus for themselves, they are obliged to use the balance of the surplus to self-fund capital projects.



End result LPT allocation to councils = 529.8m, after local variation

Geuze

Jeremy Sproket wrote: »

I don't mind paying if we could just have some accountability for the money being collected. Can we at least have a table of money in vs money out with accountability for the money being spent?

2018 consolidated AFS

https://assets.gov.ie/111373/7750e0e0-c042-4064-9f65-94893686d81c.pdf

Geuze

Jeremy Sproket wrote: »

I don't mind paying if we could just have some accountability for the money being collected. Can we at least have a table of money in vs money out with accountability for the money being spent?

2018 LA income

Central Govt grants = 1.58 bn
Rates = 1.5 bn
Selling goods and services = 1.35bn
LPT = 395 m


Total LA income = 4.95 bn, of which LPT is about 10%



2018 LA exp, across eight divisions

Housing = 1.45 bn
Roads = 1.05 bn
Water = 370m
Development Management = 429m
Environmental services = 729m
Recreation and Amenity = 474m
Misc =

Total exp = 4.99 bn

L1011

"selling goods and services" is a very odd term for that form of income.

That would be rent (housing and sometimes commercial sites too), parking fees, entry fees for leisure centres/golf courses/etc, road tolls (for DCC - they own the Eastlink) and so on.