Vacant property tax coming

Leg End Reject

https://www.boards.ie/discussion/comment/119111212#Comment_119111212

Vacant property tax could be charged after the grace period though. A few hundred a year now isn't going to bother too many people, so the result will be negligible.

DataDude

https://www.boards.ie/discussion/comment/119111341#Comment_119111341

Maybe, but then people will just wait for next grace period once you set the precedent. Also if enforced properly, the tax will be thousands of euro, not hundreds.

Don't see why any incentives are needed at the moment for owners. Demand is so insatiable that in many areas housing falling down can make huge money. People often talk about not having the funds to fix it up - then sell it in it's current state. There is no shortage of buyers, regardless of condition so that in itself should be enough of an incentive.

A bit of a stick is all that's missing atm as I suspect many people have been happy sitting watching their vacant property appreciate at an incredible pace (although that is about to change I suspect!).

mrslancaster

https://www.boards.ie/discussion/comment/119111053#Comment_119111053

Now there's an idea. Make it beneficial for owners of unused property to put the property back on the rental market 👍

Leg End Reject

https://www.boards.ie/discussion/comment/119111383#Comment_119111383

Is there a guarantee of another grace period?

Let current owners sell up and introduce a meaningful vacant property tax after that to prevent history repeating itself if these properties are such an issue.

JimmyVik

They wouldnt need any of this tax sh!t if the admitted that all their legislation is the cause of it. Then do something about the harmful legislation instead of the tax route.

I swear this country is all about tax. Its going to break the camels back soon enough. Soon there wont be enough people who pay tax left to support those who dont anymore.

What we are doing now is taxing people out of working.

rightmove

maybe ppl might rent out their vacant properties if they were incentives to do so...like something as ridiculous as being able to kick out a non paying tenant.

the birch must be worn at this stage. Dopes might think its time to grow a few carrots?

JimmyVik

Was just out for lunch with a colleague and we were discussing this. He outlined the beginnings of a plan :)

He says he is going not separate from the wife and move into their empty apartment. While he is at it he said he might give up work and draw the dole and rent a room in it to make another few euro. Then they can all get medical cards and his wife will be on a lower tax rate. They can visit each other for the odd shag and stayover.

They might get back together when the tax situation improves.

I wonder how far he will go with this cunning plan :)

JimmyVik

https://www.boards.ie/discussion/comment/119111904#Comment_119111904

To undo the damage they have done over the last number of years they must first admit that they have done the damage. But you dont see any of our govenment or ministers for twitter likes going there at all. So all they are capable of doing now is making things worse again with more legislation.

They need to revisit the legislation they did the damage with and take some responsibility and make changes

gorse

If tax, regulations, and poor tenants were landlords only concerns, then there wouldn't be any cash-in-hand landlords who were happy with their tenants then switching to Airbnb as soon as they could. I know two who did just that. It is about profit. Of course they want to get the most profit they can. Right now, there is no incentive not to hang on to an empty house to pass it on, or to rent it on Airbnb - and no enforcement of planning permission or declaring casual rental income.

A vacant house tax would level the field a bit, and also bring cash-in-hand landlords into the open.

By the by, to everyone saying that rental income is taxed at 50%, it is not. It is taxed as income. If you have no other income, it will be taxed at the 20% rate and all your tax credits apply. You can also claim on repairs and mortgage interest. https://www.revenue.ie/en/property/rental-income/irish-rental-income/how-do-you-calculate-your-taxable-income.aspx

If you let a room in your house, you can earn up to 14k tax free. https://www.revenue.ie/en/personal-tax-credits-reliefs-and-exemptions/land-and-property/rent-a-room-relief/qualifying-conditions.aspx

MakersMark

https://www.boards.ie/discussion/comment/119111383#Comment_119111383

Ask yourself, if demand is so high, why people don't want to be small landlords.

It is because it doesn't make sense, even with today's higher rents.

That's the problem.

gorse

No wonder, when 1) they can get overinflated rates on Airbnb, 2) there are no penalties for leaving a house empty, 3) everyone bandies about scare stories and says incorrectly that landlords are taxed at 50%.

And to be fair, some people don't know how to put something up for rent, are scared of the paperwork, or mean to get around to it someday but can't really be bothered.

DataDude

https://www.boards.ie/discussion/comment/119112068#Comment_119112068

I don't disagree with you on the landlord thing. I was saying demand is high for people to purchase to live.

If you don't want to be a landlord, sell it or pay the tax. There is absolutely no benefit to wider to society in the current climate to have houses vacant. Vacancy tax isn't some assault on human rights like some are making it out to be. It's just a tax and a way of discouraging a behavior that the vast majority of people in a democracy have decided is bad (having empty houses in a housing crisis).

It's a brilliant tax (if enforced effectively) because people can either pay the tax (grand), sell it someone who'll use it (great) or bring it back into use themselves (great). From a societal side there are no downsides to it, unlike income taxes for example which can have the effect of disincentivising something productive (working).

JimmyVik

https://www.boards.ie/discussion/comment/119112037#Comment_119112037

You seem a little confused.

You seem to be thinking that someone with a property to rent out is on the lower or no tax rate.

Here is a more real example. I would imagine most landlords are already in the high tax bracket.

Someone (single) is earning 50k from his job (because lets face it you would want to have a decent job to afford to be having a second property now).

He has a an apartment that he rents out.

He makes €5k profit on it. How much does he pay out of that 5k in tax?

He puts up the rent by €10 per month. So now he is making €5120 profit. How much of that €5120 is he paying in tax?

gorse

Rental income is taxed as income.

Some landlords will be on higher tax, some will not, but it is extremely misleading to say that rental income is taxed at 50%. That 50% claim leads to people thinking it applies no matter what their circumstances are.

Have a look at the examples given on the revenue page. You can also claim on mortgage interest and on upkeep.

And why do you assume that people with multiple properties also have a high salary? You don't need a high salary to inherit a house.

When hairdressers, GP secretaries, musicians, pensioners and partime farmers in rural villages rent out their extra properties, it brings life back into the village. When they put them on Airbnb, or leave them vacant, it guts the village. It is so depressing to be surrounded by empty dark houses on all sides in the winter. When families can't move back, and rural areas are losing jobs to Dublin (!) because prospective staff tell local employers they can't find any accomodation, there is a real problem.

YipeeDee

https://www.boards.ie/discussion/comment/119112037#Comment_119112037

I’m a LL and I’m paying 52% tax on my one house that I rent out.

Or should I say, my tenants are paying the State 52% tax on the rent they give me.

And yes of course I have another income.

I’ve never heard of banks giving people with no income a mortgage to buy a property whether it’s for their own home or their rental property. You need a job to qualify for a mortgage.

So unless the LL’s you’re talking about have purchased their property in cash, they’ve got another source of income and are taxed at 50+. %

With regard to Airbnb being cash in hand?

I don’t do Airbnb myself, but I know a few that do, and the hosting site hands over each of their details to the revenue commissioners. So there’s no cash in hand for them. Unless you know some other way that can happen? If you do, please let me know and I’ll pass on your advice. Lol.

YipeeDee

Instead of the government looking at the reasons why people don’t want to rent out their property, and / or are leaving the rental market, they just continue to penalise property owners. They are literally trying to tax people out of their own property.

Simplest solution for any “couple” who don’t want to rent out their second property.

Separate. Each spouse needs their own property to live in.

Whats the government going to do? Hire private investigators to sit outside peoples houses and make sure they are tucked up in their beds in their property at night? 😂

Also curious to know, with nearly 5K council homes standing idle around the country, will the State be imposing this vacant punishment tax on itself?

Viscount Aggro

its basically saying, all these people with low-skilled jobs are scum.

anyone who rents out a property MUST be in the higher tax bracket.

spaceHopper

https://www.boards.ie/discussion/comment/119108234#Comment_119108234

There is a huge difference between vacant and a tumble down reck

https://www.irishexaminer.com/news/county-by-county-where-irelands-vacant-properties-are_arid-40787250.html

dennyk

You know all those objections to build-to-rent developments because "Oh, the developers will just leave them vacant if they can't get the extortionate rents they want from them..."? That's the sort of thing this legislation is intended to address; speculators who build (or buy) and hold multiple residential properties while leaving them vacant for long periods of time hoping for prices or rents to rise. No, they're not going to tax you on an hourly basis for your home being "vacant" while you're out at work or doing the shopping, and they'll likely have exemptions for things like holiday homes (which are zoned as such, anyway) or houses that are temporarily unoccupied for certain reasons like the owner being in hospital or nursing care or on an overseas assignment for their employer or whatnot. This is targeting developers, REITs, and other big property owners and discouraging them from long-term hoarding of vacant residential units.

DataDude

https://www.boards.ie/discussion/comment/119112601#Comment_119112601

Imagine legally separating from your spouse, with all the Income Tax, Capital Gains Tax and Capital Acquisition tax nightmares that would bring, just to hold onto a vacant property/avoid a vacancy tax 😂

And no, you can't just declare two PPR's for married spouses...

YipeeDee

https://www.boards.ie/discussion/comment/119112824#Comment_119112824

Capital gains tax only applies when you dispose of an asset.

Capital acquisition tax, when you inherit / are gifted an asset.

Neither is applicable to a couple simply separating, each living in their own property.

As for income tax, they may find they’re better off in the long run, God knows what tax penalties the government may knit up next.

techdiver

I fully support this. I live in a nice estate in the midlands and on my row alone there are two perfect 4 bed semi detached homes lying vacant for a number of years in a town that is desperate for homes. One for certain is being held by a bank.

seamus

https://www.boards.ie/discussion/comment/119112824#Comment_119112824

There are lots of skinflints out there who'd rather set their money on fire than let the state claim tax on it.

Look at the anecdote above about the guy who has a vacant apartment but is planning on bending over backwards and complicating his life to avoid tax on it rather than just sell it on and invest the money. Or rent it out and let it make even more money for him.

MakersMark

If the government is going to force me to rent a property, then it should act as guarantor for the rent.

How can lefties have an issue with that?

dashoonage

https://www.boards.ie/discussion/comment/119112943#Comment_119112943

dont be silly banks wont have to pay this tax....pfft...

YipeeDee

https://www.boards.ie/discussion/comment/119112809#Comment_119112809

But it won’t target the big investor LLs though will it.

They've teams of legal eagles whose job it is to get around legislation to maximise profit.

So hypothetically let’s say if one of those big LLs have a block of 100 apartments and let’s say the threshold for deeming a property vacant is a year.

Whats stopping them from renting out the first 50 for a year’s tenancy and withholding the other 50 from the market.

Then a year later swapping over and renting out the second 50 whilst leaving the first 50 empty?.

This vacant punishment tax, is targeted at people with properties falling into dereliction and, small LLs who either won’t begin to rent out their second property. Or those who have previously rented out their property and have learned the hard way it’s not worth the risk involved. Better for them to leave them idle until their kids are ready to move in.

gorse

https://www.boards.ie/discussion/comment/119112550#Comment_119112550

The cash-in-hand landlords referred to long-term rentals. I was pointing out that landlords who had not been paying tax and then switched to Aibnb had obviously not been forced out of the market by high tax rates. If you are paying 52% you should welcome a vacant house tax that would incentivise those who are not playing by the rules to declare that they are letting their property and therefore pay tax.

Yes, I'm being pedantic, but it is important that people understand that rental income is taxed as income - subject to the same tax brackets and credits, and with certain allowed expenses - because many people honestly do not know that. Outside of boards, there are many people earning less than 36k and the RTB small landlords' report for July 2021 says that 24% of landlords either bought their rental property outright (15%) or inherited it (9%). So yes, there are landlords who aren't paying 50% tax, but whatever mixture fits their own income. People complaining that it is a unique punitive rental tax and is the main reason it is not worth letting their house (that is not referring to you, but to other comments across many threads) need to look at Revenue's site. A vacant house tax wouldn't effect any landlord, because the property isn't vacant, but might be the needed incentive for someone with a spare house who is considering letting. And of course, anyone who doesn't want to let can just pay the vacant house tax.

Thespoofer

I've spent years working my ass off, saving, eventually investing in an old house for our retirement and our kids can use our small family home, starting from nothing, zero.

I've spent years doing alot of the work myself, evenings, weekends, Bank Holidays etc. Often drove home after working all weekend passing people sitting in a beer garden enjoying the weather and a beer and I often questioned was it worth it, convincing myself it was.

I'm beginning to think now I'd have been better of drinking my money, not working so hard and trying to claim every entitlement I could get from the state, God knows I see enough people doing it today and they have a great time with it.

And before anyone pipes in and says so why don't I do it,.....f!@k off.

YipeeDee

https://www.boards.ie/discussion/comment/119113619#Comment_119113619

With regard to illegal landlords renting cash in hand, there’s legislation in place, I believe a 4K fine and / or 6 months prison sentence for unregistered LLs and properties.

And they should be brought to justice. If they’re opting to go Airbnb well then they’re paying tax because the hosting site discloses all their information to the revenue commissioners.

As for *registered small LLs opting for Airbnb over *legitimate long term rental, I can see the attraction, far less risk of a non paying tenant that you can’t have removed for two years. And as far as I know there’s legal recourse for destructive guests. Even those two safeguards alone make a big difference.

You've implied a couple of times that income earned from renting is the same as income earned from other employment.

While it is taxed the same, there are differences between the two.

Notably, when you earn your income from your employer, you’re personally not risking an asset worth hundreds of thousands of euros to earn it.

If a customer doesn’t pay, you are not legally obligated to continue to supply your service for up to two years for free.

If a customer smashes up your employer’s property, your employer will have legal recourse unlike a small landlord that more often than not has to watch non paying and / or destructive tenants walk away Scott free.

A small LL is expected to act as a business but be taxed as a PAYE worker and have none of the protections other businesses enjoy.

You make reference to people inheriting their rental property and other people buying their property outright. Clearly the latter has another source of income or else they wouldn’t have had the money to buy their property outright. And even the people who inherited their property. If they had no source of income and inherited a house, chances are they’d be living in it and wouldn’t have a second property to rent out. The fact they’re renting out the inherited property, indicates to me, they’ve got another property they’re living in. So how did they acquire that property without an income? They wouldn’t have got a mortgage on their other property without another source of income.

As for your claim I should “welcome” a vacant tax to incentivise people to rent out their property?

The opposite applies, having been a LL for just four years, I can clearly see the reasons why a person would opt to leave their property stand vacant rather than play roulette with their property renting it out

In fact, I’m going to be joining the thousands of small LLs leaving the market as soon as my current tenants leave. I will not be renting my house out again.

I won’t be selling it, and I won’t be leaving it vacant either. I just won’t ever rent it out again. It’s not worth the risk.

seamus

While it is taxed the same, there are differences between the two.

So it's like being self-employed. Right. The whole notion of "risking an asset" is nonsense too. You have insurance. If renters completely wreck the gaff, you claim off your insurance. Just like a company would if a customer wrecked their assets.

I appreciate that renters overholding is a difficult one. But then you're providing an essential service, so you don't just get to cut people off. Other essential services likewise are obligated to continue servicing people who are behind on their bills. That's a feature of being a landlord that you accepted when you chose to become one. You don't get to moan about your choices after you've made them.

Landlords always playing the poor mouth, like they're running a friendly B&B out of the good of their hearts and being taken advantage of. You're running a business. If you can't hack it, then sell up and do something else.