Am I mssing something? Don't think so. We're being conned!

Murt10

Budget support for tenants and landlords pledged by Varadker amid record rent inflation.

From todays IT.https://www.irishtimes.com/ireland/housing-planning/2022/08/10/dire-picture-for-renters-as-latest-report-shows-record-rent-inflation/

Giving more money to landlords and tenants. What's that going to solve? No increase in supply. There's still going to be the same number of tenants and the same number of properties for rent. It's just going to push rents up even further.

All that giving them both more taxpayers money is going to achieve is even higher rents, and higher taxes to pay for it. It will ensure that his friends in Blackrock and those other vulture capitalists will be able to charge Irish tenants even higher rents and send even larger amounts tax free out of the Country.

So what if landlords are leaving the sector. Big deal. The house they've just sold is still going to either house a family with a new landlord, or its going to house a first time purchaser or someone trading up thereby freeing up their original house.

I've 2 solutions.

1. Why not instead get our own local authorities to restart building accomodation?
2. If a property is lying empty, slap a 10% tax on it. It won't stay empty for long then.

GreeBo

In your list of places the landlords house is going, you forgot "to a REIT".

spaceHopper

Small time LL's are selling up, property prices are high, the risk of bad tenant, new laws and hassle introduced and possible new anti-LL government. Plus all the snowflakes giving out about them online.

Also letting is mostly done by word of mouth these days not on daft but the optics look bad for the government.

Donald Trump

Rather than inflating prices even more and transferring more wealth to current property owners, as a poster said above, put a tax on vacant property and a high CGT on property capital gains to discourage speculation. Say 80%?

That way then the landlords claiming to be fleeing the market due to regulations can still flee it. Those who are just breaking even from their negative equity can also escape. And the State can then have more justification to put money into the market through buying houses as they will be getting a lot back in taxes (although this will of course make things more expensive for those trying to purchase .... but I reckon that would be dampened by the removal of speculators and hoarders)

awec

Yes, you are missing something.

1. A rented house typically houses more people than an owner-occupied house. A 3 bed house could house 3 renters, it's likely to only house 2 owners. Landlords fleeing the market is a big deal, it's bad news for renters as it sends rents up. There is a balance to be found here, not everyone in the rental market is a potential buyer.
2. The councils will be competing for builders with the private market. We have a finite supply of labour and materials, and no developer or tradesman is sitting at home twiddling his thumbs right now. Building more council housing means building less other housing, the people who will build your council houses are the same people building houses today.
3. Vacant tax comes up time and time and time again, it is one of those things that sounds wonderful in theory but when you get into the practicalities of it the benefits tend not to materialise. A flat vacant tax would never work, there would have to be conditions where vacancy doesn't result in being taxed, e.g. when a property is listed for sale, when a property is being renovated etc. It would solve very little.

Firblog

https://www.boards.ie/discussion/comment/119455734#Comment_119455734

Have to say a vacant property tax should be brought in - and only a 6mth holiday from it if selling or renovating; at the same time rule to prevent Tenants staying in situ without paying rent should also be implemented, to reduce risk to landlords with 1 or 2 houses.

Pussyhands

I've been renting for ten years. In that time my landlord has received 220k...poor guy needs a bailout!

Mrs OBumble

https://www.boards.ie/discussion/comment/119456895#Comment_119456895

How much of that went to the government in tax, and to the insurance company, and for maintenance?

How much was paid to a bank etc as interest (if your LL is a mortgage holder / involuntary LL)

GreeBo

https://www.boards.ie/discussion/comment/119456895#Comment_119456895

if owning a property is so easy, why were you renting?

https://www.boards.ie/discussion/comment/119456895#Comment_119456895

You started renting in a period when house prices were on the floor, then went through a period when house prices rose but we’re still affordable, now find yourself renting in a period of high rents and higher purchase prices. I’m afraid the owner deserves his rent for the service provided, but you must be asking yourself, why?

Pussyhands

https://www.boards.ie/discussion/comment/119457671#Comment_119457671

Why what?

The owner provided the service... But why does he need a tax break??

Pussyhands

https://www.boards.ie/discussion/comment/119457511#Comment_119457511

Because I just came out of college.

I've also been single the whole time and also been living in an area I don't plan on living in forever.

As you'll see from my post history I could buy a property now but prices are overvalued. If landlords are getting out of the market at record prices, it would suggest they're looking to cash in at the high rather than they're losing money.. Which they can't be.

Pussyhands

https://www.boards.ie/discussion/comment/119456957#Comment_119456957

Insurance company? Lol

Insurance is like a couple hundred a year and is tax deductable.

Tax? Same tax as any hard working business or worker. Why do landlords think they should be taxed differently to everyone else?

Maintenance? In the ten years I've been there there's been two oil boiler services, a new washing machine, the outside wall caps were painted and the lower story gutters were cleaned.

All tax deductable as well as mortgage interest if they have a mortgage left..

I've literally spent more maintaining the property. Not a lick of paint in ten years.

The excuses for landlords made here are ridiculous. It's like defending tds salaries and saying how they have to pay tax on it etc.

But the thing landlords like you don't realise is that even if you pay all the tax, mortgage, if you ended up with 0 profit and loss for 25 years you end up with a 400k asset without a cent of your own money.

https://www.boards.ie/discussion/comment/119460394#Comment_119460394

I kinda agree with you in the sense that the value of the asset is rising and the mortgage owed on it reducing while the property is being rented. But, if you or anyone else thinks that 5k LLs leaving the sector in the last year is a good thing, then there is no need to try and incentivise the remaining/new LLs to provide accommodation for rent. On the other hand, if you do want to increase rental supply other than that provided by corporate investors, then more carrot and less stick would seem to be a good policy.

Pussyhands

https://www.boards.ie/discussion/comment/119460441#Comment_119460441

How many landlords entered the market? Friend of mine bought again last year and now has two properties.

I get with all the buy to let's the number of rented properties actually increased.

I don't mind landlords making money, it is an investment. But at the very least, every landlord that bought before last year is sitting on at least a 16% capital gain. Most landlords are sitting on multiples of that.

I agree there's scummy tenants and it needs to be easier evict people.

The government could also incentivise landlords to stay in the market by putting a 70% tax on capital gains on any second property bought before 2020 or... If landlords sign a 10 year lease they get a tax refund.

https://www.boards.ie/discussion/comment/119460450#Comment_119460450

Didnt the RTB recently report on the reduction in the number of rentals/LLs?

https://businessplus.ie/news/landlords-leaving-the-market/

snowcat

https://www.boards.ie/discussion/comment/119460394#Comment_119460394

Sounds good. So if its such a rock solid investment i presume you have a rental property yourself or investment in REIT's. And if not why not?

sapper

Im a single property landlord selling up. I was making about 5k a year on rent of 1200 a month, all the while thinking I owed the bank 60-90k more than the house was worth if I sold it. It’s been that way since 2009 since the financial crash. This year I woke up to the truly surprising fact that house prices had gone up so much post COViD that I wouldn’t make that much of a loss if I sold it. Having lived through a crash I know that’s just a temporary situation that won’t last forever so I’m selling up. I’m not that bothered about losing out on 5k a year. I make enough from my day job and it’s not worth the hassle. One thing I don’t want to do is advertise a place for rent at the moment - I can only imagine how many people would be after it - not pleasant.

By all accounts people who aren’t selling put their houses on AirBnB - why isn’t that impossible to do these days?

sapper

https://www.boards.ie/discussion/comment/119460450#Comment_119460450

Re the point on capital gains - as Cliff Taylor says in the Irish Times today, most landlords are like me - bought a house in the boom, then bought a bigger house holding on to the first as an investment. I’d guess that a lot of people (like me) leveraged up their borrowing on the first house and used the extra cash to help buy their second house. That higher remortgage needs to be paid now with any sale proceeds from selling the first house. On paper that’s postive equity and a capital gain (you sold the house for more than you bought it) and therefore taxable but in real terms people have borrowed on that equity to buy the second house at ridiculous 2006 prices.Most exiting landlords aren’t getting rich here. That’ all ended in 2007.

astrofool

https://www.boards.ie/discussion/comment/119456876#Comment_119456876

I would imagine it would end up involving a lot of family members and/or friends "moving" into them and become impossible to police effectively (similar to the age limit they wanted to add to buying an e-bike).

PalLimerick

https://www.boards.ie/discussion/comment/119457511#Comment_119457511

He didn't say owning a property was easy.

Pussyhands

https://www.boards.ie/discussion/comment/119460528#Comment_119460528

??

Investments are risky. I've made investments in stocks. I'm down 10k on one stock I have. Where's the budget intervention for me?

Being rich enough to buy a rental doesn't mean its difficult to make money!

I've already outlined why I'm still renting. I didn't earn enough to get a mortgage out of college, I've always been single and I don't plan on living in the area long term. Landlords want risk free investments and they want to make massive money in doing so.

GreeBo

https://www.boards.ie/discussion/comment/119460355#Comment_119460355

You "just" came out of a 10 year college course?

Weird as in August 2017 you created a thread called:

https://www.boards.ie/discussion/2057776128/in-first-4-years-of-career-with-only-1-years-experience-in-role-i-want

"Without going into too much detail, I have been out of college for 4 years."

Anywho, for 10 years you availed of a service from this person, just like a million other services you avail of. Why do you single out landlords for your negative remarks as if they just sit back having money fights?

Being a landlord is job, one that the public badly needs people to perform. Unless you want all landlords to be replaced by the state, then the state is going to have to incentive people to stay/become landlords if the market means we are losing them.

GreeBo

https://www.boards.ie/discussion/comment/119461226#Comment_119461226

You want to live risk free and let someone else carry the burden of owning and maintaining a house for you!

There is no budget intervention for you as no one gives a fiddlers whether or not you make or lose money. We need landlords, as someone who has availed of one for 10 years, I would have thought it was obvious tbh.

Where exactly do you think you would you have lived if there were no landlords?

Pussyhands

https://www.boards.ie/discussion/comment/119462830#Comment_119462830

Sorry but in the number of landlords I've had through college and after, landlords do not do a job.

I don't really know what point you're trying to make? I left college ten years ago. I've been renting since.

I have private investments that I wish I now invested in property.

There hasn't been a greater investment to be made in Ireland in the last ten years aside from bitcoin in Ireland.

If landlords are leaving, it's not because its not a great money maker. As others in this thread have said, they're leaving because they can't believe they're not break even on the cost of the property and are looking for their original investment back.

And no one has provided the stats on how many rental properties have been added to the market. All I hear is x landlords have left.

Don't feign concern for renters by saying rentals have higher density. If you had so much concern for renters then why sell?

You're in it to make money, you're making money. You're making money by selling. You're making money every which way.

I've never said I think landlords shouldn't exist. I'm saying they're getting good money out of it and should not be getting any more tax breaks. How can you not understand?

GreeBo

https://www.boards.ie/discussion/comment/119463144#Comment_119463144

Landlords do indeed do a job, the job is being a landlord. They manage the dwelling that you are living in! How is that not a job in your eyes?

When asked why you weren't a homeowner you said "I just came out of college". That was 10 years ago, so the reality is that for 10 years you have chosen to not buy a property and instead rely on someone else to provide and maintain a property for you.

Right now it can be seen as a great investment, but many individual or small landlords are in the game for longer than 10 years. You can't make vague statements like that to somehow argue that we should just ignore landlords leaving the market.

"If" they are leaving? Have you not seen the stats, they are. And its not because they are all suddenly cashing in, why would they if, in your own words its such a great investment? Who would walk away from that?! The fact that they are leaving the market despite the record high rents would indicate to most that there is a fundamental problem in the market for landlords.

"why sell?" Because, despite the rent prices, its not worth it to smaller landlords due to all the overheads.

Again, the fundamental question you cant reasonably answer is: if its so lucrative, why on earth are they leaving? You cant be trying to tell us that all of the just happened to break even at the same time and dont want to keep "getting good money out of it"?

The argument just makes no sense!

Padre_Pio

If you want cheaper rent, then you need more supply.

End of story. All these measures to punish property owners who want to leave a house vacant or sell are simply life support for a broken market.

LL are fleeing the market because of bad tenants? No. LL are fleeing because there is no recourse if they get a bad tenant. If a LL could register an issue with the RTB and get it resolved in a week instead of 6 months then they wouldn't sell.

If you could guarantee that landlords would get good tenants through a proper database of references, and guarantee that landlords could fcuk bad tenants onto the street then we'd be sorted.

Pussyhands

https://www.boards.ie/discussion/comment/119463990#Comment_119463990

OK dude you clearly havent read my previous posts. My landlord has done basically nothing in ten year. I've done most of it out of my own pocket because the landlord just says they'll do something yet never do it! The garden shed has collapsed in a heap, I'm getting heat from neighbours saying it'll attract rats. Yet the landlord said they'd get a new one over a year ago! Dishwasher broke down, landlord got someone out to look at it, said it was too old to be repaired. No dishwasher now. Loads more major issues.

And you can't even give out to them because they'll just kick you out.

People always leave investments. Every seller there's a buyer!

AySeeDoubleYeh

https://www.boards.ie/discussion/comment/119463990#Comment_119463990

Not getting involved in all the rest of this but "you've been renting for ten years, therefore you have chosen not to buy a property" is really sh*tty logic and it should be abundantly clear why.

Grumpypants

I've said it before and I'll say it again. Give Landlords the same relief rent a roomers get. But limit it to 12k tax free. That's rent of €1000 a month which is a reduction for most renters and would double the income of most landlords.

https://www.boards.ie/discussion/comment/119465118#Comment_119465118

Think its a good idea. But also if the rent goes above the relief threshold the full rate of tax applies to the full amount of rent collected. This would probably go some ways to stabilising the market but would require a bit of effort from the government as different rent thresholds would be required for different areas and property sizes.

Grumpypants

https://www.boards.ie/discussion/comment/119470695#Comment_119470695

Yup, charge 12k and pay €0. Charge €12,001 and you pay tax on it all. 5-6k

Every "single property" property landlord would drop their rent overnight and that's a good 70% of the market.

Anyone renting at 1800 a month would suddenly have 800 a month back in their pockets. The landlord would also have 800 in theirs.

It's not a rent cap, that has failed In every city it was ever in, and only drives up rent prices. It's not a relief that only benefits the landlord or the renter. The tax payer gets a stable and predictable rental market. And a cheaper social housing bill each year. Everyone wins.

Varik

The Social housing bill would decrease by the same amount the tax revenue drops by.

The property itself is continuously rising in value but the return is set, you'd be lagging behind the government set limit and all the fighting to amend it every so often. Assuming some agreed rates by house type, but you'd want regional rates too or you' have a 1m house in Dublin at 12k/yr vs 100k house somewhere else. You'd then have every Dublin based TD protesting and campaigning why donegal gets cheaper than Dublin.

You could very easily destroy the last remaining interest from small LL in entering the market.

There's already a mindset from LL of the Gov of what they'll introduce next, even if at the time of introduction it was a decent return it won't be for long.

Grumpypants

https://www.boards.ie/discussion/comment/119472188#Comment_119472188

How many small landlords have a €1 million houses rented out to someone that is struggling to meet their rising rent demands? It seems like a real outlier.

Any landlord earning 24k or lower is better off reducing to 12k and going tax-free, even if you don't make a big saving, the reduction in the hassle of doing tax returns would be worth it.

Any landlord that wants to charge more is free to do so. So if they do have a €1mill home rented out to some rich guy then they can charge them the top market rate. Remember there is no cap. If they want to change.

GreeBo

https://www.boards.ie/discussion/comment/119464242#Comment_119464242

Hey dude.

For 10 years your landlord has provided you with somewhere to live!

Sure for every seller there is a buyer, but all buyers are not equal. Compare a REIT to a private landlord for example.

GreeBo

https://www.boards.ie/discussion/comment/119464395#Comment_119464395

The point was to indicate that perhaps being a property owner isnt all sunshine and rainbows as some poster like to make out.

The poster in question wants to maintain the flexibility to move out of area whenever they want and not take the risk of buying a property, yet they cant see anything their landlord is doing for them.

Pussyhands

https://www.boards.ie/discussion/comment/119480097#Comment_119480097

I should be on my knees thanking the landlord for me paying off most of his mortgage so?

Ray Palmer

https://www.boards.ie/discussion/comment/119480141#Comment_119480141

How much would the property cost to buy now? You paid €220k in rent so the landlord got about €110k and you think that paid most of the mortgage? Even if the property was €110k you wouldn't have paid most of the mortgage as they charge interest. You are lying to yourself and just not factual

Pussyhands

https://www.boards.ie/discussion/comment/119480426#Comment_119480426

lol

Considering I've only been renting 10 years there and mortgages usually are 25 years you'd be damn hoping I wouldn't have paid off most of the 25 year mortgage. I obviously meant most of the mortgage in the period I was renting..you landlords don't have the best reading comprehension.

https://www.boards.ie/discussion/comment/119480141#Comment_119480141

Only if you think your employer pays your rent just because you use your wage to do so. You are paying for use of the property, what the owner does with the money is his/her business.

Donald Trump

https://www.boards.ie/discussion/comment/119460633#Comment_119460633

Why would you have to "police" that aspect? Let the Revenue take care of it.

If the house is vacant, then you pay the vacancy levy. If you have someone renting off you, then you have to register the tenancy and pay income tax on the declared rent. If you declare an absurdly low rent to avoid tax, then it sets a benchmark for all future rents tied to the property.

Revenue can also calculate any gift tax due on allowing people to stay in your house for "free". If you get your kid to "live" there on paper, then the Revenue can let the value accrue against their lifetime CAT allowance.

astrofool

https://www.boards.ie/discussion/comment/119481377#Comment_119481377

Even within what you said, there is lots of different ways around it, no one is going to support gift taxes for siblings/cousins/children staying in a property or setting a fake market rent for them, without going through handling holiday homes or people who genuinely have 2 properties they use.

It's a nice idea in theory, but the application of it would only lead to the very few paying it.

magicbastarder

it might not solve the problem, but it does seem to be possible for local authorities to CPO empty or derelict houses:

https://www.irishtimes.com/news/social-affairs/louth-council-acquires-35-vacant-houses-by-compulsory-purchase-1.3216231

IIRC there's some heistancy to do this at a government level lest it might be seen as interfering with the constitutional right to own a property (which is qualified); but you'd think the government would be gunning for this, because it'd actually be something that'd look like they were taking action.

even if the government set up a central fund (possibly after a referendum on the topic, and i suspect we know how that would go); for the local authorities to seize derelict property, just take any actions to make it safe, and sell it at auction. if the owner appears, they get whatever was earned at auction minus the council's costs.

there's a street i lived on in phibsboro with two adjoinng houses which have been derelict for over two decades; the council have had to step in several times to prevent them creating a danger to pedestrians passing, and it's an insult to common sense that they should not just assume ownership by now.

Donald Trump

https://www.boards.ie/discussion/comment/119481476#Comment_119481476

Nothing will every be 100% foolproof, but technically speaking, getting something free or at reduced rate like is considered a gift at the minute. The reason that people might get away with currently avoiding tax implications from it might simply be that there is not be a record of it. But that is people avoiding the tax rather than it not existing. For relations, there are also certain lifetime limits along with annual limits (I think 3k per year is the annual limit for regular gifts)

If registered as an official tenant to avoid a vacancy levy, then there would either have had to be tax paid on the rental income, or CAT for the gift. The important distinction is the record. With no vacancy levy, the person would not be registered.

GreeBo

https://www.boards.ie/discussion/comment/119480141#Comment_119480141

I'm not sure you understand how the economy works...you pay him for a service that you cant or choose not to provide for yourself.

What exactly is your problem with paying for the service you receive?

GreeBo

https://www.boards.ie/discussion/comment/119470937#Comment_119470937

What hole in taxation receipts does that cause our budget?

Donald Trump

https://www.boards.ie/discussion/comment/119481512#Comment_119481512

I agree that that should be considered. However, a higher priority issue would be for the Council to actively use their own properties that they already have. There is a Council owned house near me that has been lying empty for more than 15 years. They have another one about 2 miles away which has been vacant for the same time but the latter is not habitable and was empty for maybe 20 years before they bought it. Both had land attached to them and at the time the Council employees were effectively playing "speculator" with public money. The explanations at the time was that they would buy these random properties and have them to hedge against rises in value of other land they might later want to buy to use for themselves.

There are regular accounts of houses being boarded up for 6+months when a council tenant moves out.

Pussyhands

https://www.boards.ie/discussion/comment/119481573#Comment_119481573

Where did I say I have a problem with paying?

You seem to think that when I say landlords are getting very wealthy, and that they shouldn't be getting any more tax breaks that I am against landlords existing.

I'm fine with paying my rent. I have a problem with people making out like landlords are loss making and are only letting houses for the good of the renter.

astrofool

https://www.boards.ie/discussion/comment/119481541#Comment_119481541

When there's lots of ways to legitimately avoid (which is completely legal) a tax, a very few % will actually pay it, the enforcement of it alone would be almost impossible at any level that was of benefit to the exchequer. It's a slogan tax rather than one that would solve any problem.

Donald Trump

https://www.boards.ie/discussion/comment/119481799#Comment_119481799

What are you referring to there? CAT for gifts or a hypothetical vacancy tax which can be brought in and be adjusted over time

Ray Palmer

https://www.boards.ie/discussion/comment/119480531#Comment_119480531

Which you didn't do either