Property tax changes will see 36% face higher tax

magicbastarder

The owners of mid-to-high value range residential properties which have seen above average price increases are most likely to face a higher local property tax bill under a revised structure for the tax.

The Cabinet has agreed to cut the rate at which the tax is charged and to broaden the bands in a move that will see the bills of more than 50 per cent of households remain the same.

https://www.irishtimes.com/news/politics/property-tax-changes-will-see-36-face-higher-tax-and-valuations-reviewed-every-four-years-1.4581976

i've no moral issue at all with paying property tax, but do the government not realise the optics of doing this when property values are completely divorced from what they should be, is lunacy?
my property tax will probably come close to doubling (we bought soon after the bottom, so we were lucky, so don't cry for me argentina)

also, no house has sold along our road in several years; i've no way of knowing what the market value of the house is.

randd1

magicbastarder wrote: »

https://www.irishtimes.com/news/politics/property-tax-changes-will-see-36-face-higher-tax-and-valuations-reviewed-every-four-years-1.4581976

i've no moral issue at all with paying property tax, but do the government not realise the optics of doing this when property values are completely divorced from what they should be, is lunacy?
my property tax will probably come close to doubling (we bought soon after the bottom, so we were lucky, so don't cry for me argentina)

also, no house has sold along our road in several years; i've no way of knowing what the market value of the house is.

Any property tax should be done purely on square meters taken up by each floor and the whole front/back garden, on a scale based on combined household income.

magicbastarder

those living out in the country with houses far bigger than a similarly valued house in dublin will riot if they do that
(note: i am not actually disagreeing nor agreeing with you there)

CageWager

Im perfectly comfortable with people paying tax on assets they own (myself included) that have seen massive inflation through their lifetime. Tax wealth, not income.

magicbastarder

i'd agree with you there, with the caveat that people are being asked to pay tax based on the artificial value of their house caused by a failure of governance.
i don't *want* my house to be worth what the market value would claim it is.

CageWager

CageWager wrote: »

Im perfectly comfortable with people paying tax on assets they own (myself included) that have seen massive inflation through their lifetime. Tax wealth, not income.

Absolutely. It’s something that most people are comfortable with. It’s a progressive tax on wealth. It’s the type of thing that is a no-brainer for a country ran on social democratic principles. The same would apply on charging for water based on usage.

ixoy

I'd be curious to see what they use to value the properties. People who bought in the last few years will most likely have used the valuation map of their area, rather than the sell price (even if it's meant to be the latter) so it'll depend on how much prices have increased. The bands having gone up 60% should cover a lot of the increase though, at least in the last five years.

suicide_circus

CageWager wrote: »

Im perfectly comfortable with people paying tax on assets they own (myself included) that have seen massive inflation through their lifetime. Tax wealth, not income.

So a millionaire playboy living in rented penthouse pays no property tax but a couple on or below the average industrial wage who scrimped and saved to buy a modest semi d to raise their kids in do....

Perhaps the couple should divest themselves of this "wealth" and allow the state to house them.

conorhal

Food.
Water.
Shelter.

The three basics a person needs to live, taxing such is criminal.

It benefits me naught that my home has shot up in value, this is merely a product of the government's broken housing policy and them telling me that I have to pay more because my home is worth more adds insult to injury.

machiavellianme

magicbastarder wrote: »

those living out in the country with houses far bigger than a similarly valued house in dublin will riot if they do that
(note: i am not actually disagreeing nor agreeing with you there)

Yet they are the very folk who benefit most through subsidised services (Esb connection, fiber connection etc costs more to rural locations than urban). Modest 3 bed, Ber G rated houses in Dublin built around a century ago with a newspaper sized garden go for 800k+ but my siblings have built A rated 4000 Square feet mansions on 2 acres for 150k (ish) by doing a lot of work themselves. It seems perverse that they pay nothing at present and even after the changes will be just 10% of the typical city property.

Donald Trump

machiavellianme wrote: »

Yet they are the very folk who benefit most through subsidised services (Esb connection, fiber connection etc costs more to rural locations than urban). Modest 3 bed, Ber G rated houses in Dublin built around a century ago with a newspaper sized garden go for 800k+ but my siblings have built A rated 4000 Square feet mansions on 2 acres for 150k (ish) by doing a lot of work themselves. It seems perverse that they pay nothing at present and even after the changes will be just 10% of the typical city property.

Who pays nothing at present?


Who paid your siblings' contribution to the local authority when they built their house? That is usually tens of thousands.


Also, the houseowner is responsible for paying for ESB connections etc. Or at least used to be. It was fairly common years ago that a person would get some money back when someone connected onto their "extension".

Immortal Starlight

I agree with Mary Lou 100% on this. It most definitely should be abolished.

Donald Trump

Property tax should be greatly increased. Perhaps with some tax credits available up to a limit.

It would cool down rent seekers distorting the market


(economic rent seekers)

CageWager

suicide_circus wrote: »

So a millionaire playboy living in rented penthouse pays no property tax but a couple on or below the average industrial wage who scrimped and saved to buy a modest semi d to raise their kids in do....

Perhaps the couple should divest themselves of this "wealth" and allow the state to house them.

Do you think the millionaire playboy became a millionaire playboy without paying significant wealth taxes? Capital gains, inheritance tax etc.

timmyntc

If LPT is supposed to fund services provided by the local authority, then it should be paid based on all adults in the property.
If you are renting, you still pay. Because you benefit from the services since you are the one living there.
It should be a flat rate, because everyone benefits from the same services from the LA unless I am mistaken?

Taxing based on house valuation is mad - plenty of houses bought 60 years ago are worth a mint now, but its not like the owners see any of that increase in value. Its all tied up in the house.

Beasty

Maybe a better title would be

"Property tax changes will see 64% not facing face higher tax"

And to be clear, that's what happens with indirect/value based taxes. They go up over time. Given the economic crisis we are possibly staring into, we need to start making changes to the tax and welfare systems. Neither of those are vote-grabbers, but alas if ignored we are simply storing up bigger issues for our children and grandchildren (and probably ourselves)

blanch152

conorhal wrote: »

Food.
Water.
Shelter.

The three basics a person needs to live, taxing such is criminal.

It benefits me naught that my home has shot up in value, this is merely a product of the government's broken housing policy and them telling me that I have to pay more because my home is worth more adds insult to injury.

You must be glad you live in Ireland and fully support the current government, because everywhere else in the world has taxes on these.

magicbastarder

Beasty wrote: »

Maybe a better title would be

"Property tax changes will see 64% not facing face higher tax"

yeah, i just grabbed the headline from the IT article.

though i suspect nearly everyone will face higher taxes, i'd say most people have just been rolling over the same valuation from when LPT was introduced so are years out of date.

anyway, i'll stand by my point - pegging payments based on values in a clearly highly dysfunctional market seems utterly tone deaf.
it means that if some theoretical government did fix the housing market, LPT take will plummet even though the country will actually be better off.

magicbastarder

magicbastarder wrote: »

anyway, i'll stand by my point - pegging payments based on values in a clearly highly dysfunctional market seems utterly tone deaf.
it means that if some theoretical government did fix the housing market, LPT take will plummet even though the country will actually be better off.

The market is only really dysfunctional if you are trying to rent a place or are a FTB. That's why it us so difficult to fix, only a small part of the population is affected. High prices, or objecting to planning or renters moving into an area suits lots of people.

Now more people get to feel the burn.

Gregor Samsa

magicbastarder wrote: »

though i suspect nearly everyone will face higher taxes, i'd say most people have just been rolling over the same valuation from when LPT was introduced so are years out of date.

Well, that clearly can't happen if they estimate that 64% won't be facing higher taxes - the estimates (if they're worth anything at all) will take re-valuation of undervalued houses in to account.

My house (4 bed semi, but not in Dublin) was in the 200,001–250,000 bracket before, so €405.

It'll be in the 200,000-262,500 bracket now, so €225.

Even if I had previously undervalued my house by 50 grand, I would have been paying €315. I'd have to over-value it by 40 grand now to hit €315.

magicbastarder

Topgear on Dave wrote: »

Now more people get to feel the burn.

i don't think that's a solution in and of itself!

suicide_circus

CageWager wrote: »

Do you think the millionaire playboy became a millionaire playboy without paying significant wealth taxes? Capital gains, inheritance tax etc.

No of course not. I'm not actually opposed to property tax at all - so long as you receive services in return - but when you base that tax on something as fickle as house prices, you start to lose people. Jimmy and Fiona buy a house in 2010, it's now costs double what they paid for it, Jimmy and Fiona havent had a payrise in that time and still dont own the house outright as two thirds of the mortgage is outstanding. This "wealth" they have is entirely dependant on them selling their home and having to go and buy another one.

Mimon

Agree with it in principal but can anyone explain why it is paid using already taxed income?

So I am paying a tax with money that I've already payed tax on. Bonkers.

Wibbs

suicide_circus wrote: »

No of course not. I'm not actually opposed to property tax at all - so long as you receive services in return - but when you base that tax on something as fickle as house prices, you start to lose people. Jimmy and Fiona buy a house in 2010, it's now costs double what they paid for it, Jimmy and Fiona havent had a payrise in that time and still dont own the house outright as two thirds of the mortgage is outstanding. This "wealth" they have is entirely dependant on them selling their home and having to go and buy another one.

This. The taxpayer has no control over it. If I want to pay less income tax I can choose to earn less. If I want to pay less car tax I can choose to get a smaller engine, go hybrid/electric. Now the usual response to this is to downsize, but a home isn't a car or consumer object to nearly the same degree. Basing a tax on an extremely fickle market and external forces is wrong in my humble. And no just because other nations tax something doesn't mean we should automatically follow them. That's not an argument.

accensi0n

Mimon wrote: »

Agree with it in principal but can anyone explain why it is paid using already taxed income?

So I am paying a tax with money that I've already payed tax on. Bonkers.

Isn't it just standard? CPT, VAT etc. paid after you've already paid income tax.

machiavellianme

Donald Trump wrote: »

Who pays nothing at present?


Who paid your siblings' contribution to the local authority when they built their house? That is usually tens of thousands.


Also, the houseowner is responsible for paying for ESB connections etc. Or at least used to be. It was fairly common years ago that a person would get some money back when someone connected onto their "extension".

Paying for the various connections is based on standard charges, capped and not reflective of actual costs.
Anyone who bought a new house since 2013 pays nothing at present. I've no idea what "contribution" you speak of. Are you implying some sort of brown envelope?

conorhal

blanch152 wrote: »

You must be glad you live in Ireland and fully support the current government, because everywhere else in the world has taxes on these.

Yes, following lemming off a cliff is always the smart move.


Government makes homes unaffordable to ordinary people.
Taxes the bollix off the deminishing numbers that can afford a roof over their head.

"can I have some more taxes plz!, No, not for vuture funds and the corportations, just for me!" -Stupid people.

osarusan

Mimon wrote: »

Agree with it in principal but can anyone explain why it is paid using already taxed income?

So I am paying a tax with money that I've already payed tax on. Bonkers.

That applies to any other tax as well though doesn't it?
Any shopping you do, bills you pay, all come with tax and are paid for by income you've already been taxed on.
Or is property tax different somehow?

I agree with the general argument here that it's not fair that people are considered to have 'wealth' purely because they bought (with mortgage) a property that has increased in value since they bought it.

And even more unfair that the increase is magnified by total incompetence in the housing policy of successive governments.

CageWager

suicide_circus wrote: »

No of course not. I'm not actually opposed to property tax at all - so long as you receive services in return - but when you base that tax on something as fickle as house prices, you start to lose people. Jimmy and Fiona buy a house in 2010, it's now costs double what they paid for it, Jimmy and Fiona havent had a payrise in that time and still dont own the house outright as two thirds of the mortgage is outstanding. This "wealth" they have is entirely dependant on them selling their home and having to go and buy another one.

That's a fair point - we should tax equity in a home rather than total price.

This. The taxpayer has no control over it. If I want to pay less income tax I can choose to earn less. If I want to pay less car tax I can choose to get a smaller engine, go hybrid/electric. Now the usual response to this is to downsize, but a home isn't a car or consumer object to nearly the same degree. Basing a tax on an extremely fickle market and external forces is wrong in my humble. And no just because other nations tax something doesn't mean we should automatically follow them. That's not an argument.

I think the nub of the issue is that in Ireland we tend to have the worst of both worlds. I would be an advocate of high wealth taxes and low income/sales taxes. Unfortunately the government here want to slap on a wealth tax without lowering income taxes or VAT because we are massive overspenders.. but that's another issue altogether.

magicbastarder

I think it'd be fairer (spitballing here) to create say ten bands, and place houses into those bands based on historical value data, so you pay tax relative to average house values, not based on an illusory figure which goes up and down. E.g. 'your house is the third ten percent band so you pay €600'

NIMAN

From what I can see, those of us who have a house worth less than 900k are paying the same?

If you own a house worth more, stop your crying moneybags!

Geuze

Immortal Starlight wrote: »

I agree with Mary Lou 100% on this. It most definitely should be abolished.

Property taxes are the most sensible of all taxes.

That is why many countries in the world have property taxes.

Wibbs

Geuze wrote: »

Property taxes are the most sensible of all taxes.

That is why many countries in the world have property taxes.

Just saying it doesn't make it true and for the reasons already given it is very much debatable. More than debatable in Ireland's proerty market and that's before the wastage in spending our existing tax base.

Geuze

Wibbs wrote: »

Just saying it doesn't make it true and for the reasons already given it is very much debatable. More than debatable in Ireland's proerty market and that's before the wastage in spending our existing tax base.

There is widespread agreement on this point.

I will find Mirrlees for you.

Jerry Attrick

Immortal Starlight wrote: »

I agree with Mary Lou 100% on this. It most definitely should be abolished.

That's one of the most convincing arguments that I've ever read on Boards.ie.

If Mary Lou says it, then it must be right!

In fact, maybe I'll just stop thinking for myself from now on and let Mary Lou do my thinking for me.

Spanish Eyes

Geuze wrote: »

Property taxes are the most sensible of all taxes.

That is why many countries in the world have property taxes.

As others have said, that is fine if you get all the services included. We don't, we pay a PT and still have to pay for municipal services like waste collection etc. No one has a wheeze where the PT is going within the Councils. Seems to me that services have reduced since its introduction, but I'm a cynic, forgive me.

In countries like France and UK, everyone pays their community charge/council tax. Everyone, renters and owners alike, sounds ok to me, after all everyone uses the services in those countries and others who have similar systems. Our PT is akin to a wealth tax really, only those who own or will own residential property must pay it, but everyone uses the services, bad as they are here in general.

I note that the charity donation to smaller yielding councils is going. That is a good move. If you want to live in a city you pay more for the ease of access to facilities, if you choose to live rurally, you don't get the same services so must manage on what you've got. Although I note that shortfalls in low yielding councils will be made up by Central Government. The lobbying to get extra funding will be interesting.

jimmycrackcorm

conorhal wrote: »

Food.
Water.
Shelter.

The three basics a person needs to live, taxing such is criminal.

It benefits me naught that my home has shot up in value, this is merely a product of the government's broken housing policy and them telling me that I have to pay more because my home is worth more adds insult to injury.

Taxes are required for what the state provides and must be raised by various means. You can regard taxes as criminal for many things, VRT for example.
Why not include electricity? But why should these be criminal when you get the benefit from taxes?

Consumption taxes are very fair, the more you use, the more you pay.
The shelter that you think should be untaxed, gets the benefit of the road infrastructure that allows you to travel to and from it. And, before someone chimes in about "road" taxes paying for that, motor taxes go to the local authority which provides and maintains lots of facilities, and people living in properties who don't drive also get those benefits.

If the argument is that people shouldn't pay taxes for the basics to live then it follows that they should have to make up the shortfall to pay extra for the services they need apart from those e.g. a Garda tax in case you have a burglary.

magicbastarder

NIMAN wrote: »

From what I can see, those of us who have a house worth less than 900k are paying the same?

superficially, yes.
but that house wasn't worth 900k five years ago. if the house had increased in value, in line with inflation, fine, but if your house has increased in value through bad governance, people will complain.

blanch152

Wibbs wrote: »

Just saying it doesn't make it true and for the reasons already given it is very much debatable. More than debatable in Ireland's proerty market and that's before the wastage in spending our existing tax base.

Property doesn't disappear unless it is demolished.

Income can be shifted to other countries, non-tangible wealth can be shifted to other countries, corporations can shift to other countries, but houses and property can't. As a result, property taxes can offer the most sustainable tax base. Ours doesn't quite do that, as it is based on value, but there are very good reasons why property taxes are widespread.

Geuze

The IFS have the Mirrlees review:

https://ifs.org.uk/publications/mirrleesreview#:~:text=The%20Mirrlees%20Review%20brought%20together,and%20recommend%20how%20it%20might

Chapter 8 is about the taxation of wealth.

https://ifs.org.uk/uploads/mirrleesreview/dimensions/ch8.pdf

See page 803.

blanch152

Jerry Attrick wrote: »

That's one of the most convincing arguments that I've ever read on Boards.ie.

If Mary Lou says it, then it must be right!

In fact, maybe I'll just stop thinking for myself from now on and let Mary Lou do my thinking for me.

You have just become a Shinnerbot on Twitter, they all let Mary-Lou do their thinking for them.

Geuze

Spanish Eyes wrote: »

As others have said, that is fine if you get all the services included. We don't, we pay a PT and still have to pay for municipal services like waste collection etc. No one has a wheeze where the PT is going within the Councils. Seems to me that services have reduced since its introduction, but I'm a cynic, forgive me.

All local authorities publish accounts.

We do know where the LPT goes.


Expenditure

Housing and Building = 1.37bn (this is not capital expenditure)
Roads = 1 bn
Water = 357m
Development Management = 390m
Environmental services = 675m
Recreation and Amenity = 433m
Plus misc.....



Income

Central Govt grants = 1.580 bn
Selling goods and services = 1.355 bn
LPT = 396m
Rates = 1.5 bn

Mimon

osarusan wrote: »

That applies to any other tax as well though doesn't it?
Any shopping you do, bills you pay, all come with tax and are paid for by income you've already been taxed on.
Or is property tax different somehow?

I agree with the general argument here that it's not fair that people are considered to have 'wealth' purely because they bought (with mortgage) a property that has increased in value since they bought it.

And even more unfair that the increase is magnified by total incompetence in the housing policy of successive governments.

Just because VAT is doesn't mean property tax has to be. It would be unwieldy to do it with Vat. Would be easy to do it with property tax as it is already linked to the owners PPS etc.

magicbastarder

to take a reductio ad absurdum approach, if property values continued to climb, say to three times their current values, according to the model of judging wealth based on property values, most people in ireland would be three times richer (assuming most people's wealth is tied up in property).
but we'd be an economic basket case, or dam collapse waiting to happen.

if you want to tax people on wealth, tax it based on actual wealth (or property wealth relative to the rest of society, which seems to be an equitable way to do it) and not an illusory wealth tagged to an artificial price.

magicbastarder

or else baseline it against what the government claim is an affordable house; if the government can claim an affordable house costs €450k and that everyone needs somewhere to live, someone in a house worth €400k has no 'net' wealth but someone in a house worth €950k has half a million in 'net' wealth.

Spanish Eyes

Geuze wrote: »

All local authorities publish accounts.

We do know where the LPT goes.


Expenditure

Housing and Building = 1.37bn (this is not capital expenditure)
Roads = 1 bn
Water = 357m
Development Management = 390m
Environmental services = 675m
Recreation and Amenity = 433m
Plus misc.....



Income

Central Govt grants = 1.580 bn
Selling goods and services = 1.355 bn
LPT = 396m
Rates = 1.5 bn

Thanks.

Can't see much happening in the Environmental Services though. IW (or ourselves alone) sort out leaks and all that. No waste collections, lots spent on clean ups as a result, seems false economy to me. Plenty of loot for cycle lanes at the moment, they are the enhancements du jour and anything anywhere in the cities can be disrupted to facilitate them. I am in favour of reducing vehicular traffic in urban areas/city centres, but the alternatives to car driving are poor. Not everyone is comfortable cycling, even on dedicated lanes.

Next up is VFM and outsourcing. I'm talking Council expenditure in general not just PT.

Jerry Attrick

Geuze wrote: »

Property taxes are the most sensible of all taxes.

That is why many countries in the world have property taxes.

But we don't have a proper property tax!

For instance, my mate Reggie "filthy rich" Richardson rents his six bedroom mansion in Foxrock so doesn't have to pay LPT on it and he owns an 8 berth ocean-going yacht that he keeps in Dun Laoghaire but he doesn't have to pay LPT on it either.

And lucky Reggie also owns a mobile home in Brittas Bay but, guess what - he's not liable to pay LPT on it either because, in a fit of stupidity, Michael Noonan exempted mobile homes from the tax.

Meanwhile, the luckless Mrs. Attrick and I have to pay LPT on our decaying tin shack in deepest Leitrim.

Jerry Attrick

blanch152 wrote: »

You have just become a Shinnerbot on Twitter, they all let Mary-Lou do their thinking for them.

The ironic thing is that Mary Lou herself lets Pearse "magic money tree" Doherty do all of her economic thinking for her! (Talk about the blind leading the blind!)

Donald Trump

Neither the rate nor the value really matters individually. All that matters is the combination.

If the value of all the houses they have to tax is 100 and they need 1 then the tax rate will be 1%. If the value of the house shoots up to 2, they will set the tax rate at 0.5%.

All that matters really is the relative value of your house to all the other houses. That will determine the proportion of the tax required that you will pay.


LAs currently have some discretion to haircut the assessed tax across the board as far as I understand

Geuze

Jerry Attrick wrote: »

But we don't have a proper property tax!

For instance, my mate Reggie "filthy rich" Richardson rents his six bedroom mansion in Foxrock so doesn't have to pay LPT on it and he owns an 8 berth ocean-going yacht that he keeps in Dun Laoghaire but he doesn't have to pay LPT on it either.

Why isn't LPT payable on the Foxrock house?

Geuze

Donald Trump wrote: »

LAs currently have some discretion to haircut the assessed tax across the board as far as I understand

LA can vote on + / - 15%.