Proposals to reform Property Tax Thread

Cyrus · 11-01-2018 6:45pm

Idbatterim wrote: »

I was going to say until I read your last point, that that is exactly what we have! one small section being hammered, i.e. moderate to high earners, the rest of them are paying in f**ck all into the system to put it mildly... we cant have .18% charged on property, but we can have 250 times its multiple charged to people on relatively low incomes... :rolleyes: Wonder how the insane marginal tax rate came about, irish begrudgery I assume from the lower echelons jealous of Irelands very own wolf off wall streets on 40-50k etc :rolleyes:

poor old lucinda could hardly get a vote when she proposed a flat tax of 30% on income :rolleyes:

Idbatterim · 11-01-2018 7:05pm

they have ditched that policy, they put it politely, but said the Irish in general were too stupid to comprehend it and its implications and they are right...

Averagevegan · 11-01-2018 7:41pm

Idbatterim wrote: »

they have ditched that policy, they put it politely, but said the Irish in general were too stupid to comprehend it and its implications and they are right...

The Irish unstood that it would only apply to middle earning PAYE.

The bleating class would be exempted as they are cheap votes. The rich would keep their loop holes.

thereality · 11-01-2018 10:32pm

The_Conductor wrote: »

Playing devils advocate here. The OAP can already defer their LPT (and their Fair Deal payment etc). In addition- and despite much debate in recent years- we do not have the sheltered housing, retirement villages etc- which most other countries with aging populations are developing. Its all well or good telling the OAPs to downsize- but downsize to where and what? We are already discriminating in favour of FTBs for any new builds coming on stream. If we expand this discrimination- all its going to do- is increment prices by a commensurate amount.

It is case of demand and supply. What is the incentive of me to leave my cushy €1m house in Clontarf with a nominal LPT? However, if my LPT was closer to the effective property tax rate of NYC of around 0.75%, which is €7,500 per year. Do I have more of an incentive to downsize? Absolutely. I know estate agents who are seeing OAPs downsize to regular apartments with lifts etc. A property LPT might be a soft push to get more to downsize

It would probably be cheaper for DCC to build subsidised OAP housing to OAPs in former council housing to sell up and move into smaller housing. DCC built Father Scully house in Dublin 1 for €17m which has 99 apartments. Although building has gotten more expensive. They could more apartment blocks for OAPs, earn a rent from it to cover maintenance, debt borrowings etc. Plus have housing coming back onto the market

With property tax being so little, there is no incentive to downsize

elperello · 11-01-2018 10:40pm

More carrot and less stick.

The model is already here - http://mcauleyplace.ie/

"Build it and they will come"

(not the only solution but part of the solution)

Wanderer78 · 11-01-2018 10:42pm

elperello wrote: »

More carrot and less stick.

The model is already here - http://mcauleyplace.ie/

"Build it and they will come"

(not the only solution but part of the solution)

just like those ghost estates:D

Geuze · 11-01-2018 11:46pm

cornet wrote: »

““If we want to continue to have the level of local services we expect, such as fire and emergency services, well maintained streets, public parks, waste services, libraries, open spaces and leisure facilities, we have to be willing to contribute towards paying for them. We expect to raise in the region of €160 million through the Household Charge which will be used to directly support the continued delivery by local authorities of these vital services.”

We were told to expect improved local services. In rural Ireland this is certainly not the case. I see little or no transparency in how this tax is collected or spent.

The LPT replaced other income, it is not extra income for the LA.

So no extra services.

Spanish Eyes · 12-01-2018 5:41pm

There is an urban/rural divide here when it comes to LPT.

Those living in urban areas and servicing large mortgages and often high service charges pay more than their cousins down the country in the five bed hacienda with a double garage on an acre.

So let us take services for example. Urban areas have Public Transport (weak as it is), shops, hospitals, schools etc.

Rural areas have peace and quiet, lots of land, privacy, and all the rest of it, but they generally have septic tanks and water to pay for.

BUT in rural areas, every house on a boreen is serviced with ESB, Phone lines (broadband is coming!), and the roads are maintained.

It will always be them and us depending on what side you are on.

I dislike this tax as it is an urban tax for sure. And a proportion from urbanites subsidise our rural friends too. That is mad.

Anyway, it has to be reformed. How is a different matter.

Maybe sq m of the house, plus a charge for acreage, and to balance it, a premium in urban areas for access to services, public transport etc.

I am not sure, because cities should be accessible for a huge population, whereas rural dwellers have decided that's not for them.

The_Conductor · 12-01-2018 6:28pm

And some cognisance of a difference between leasehold and freehold property?

12-01-2018 6:49pm

It should be on the number of inhabitants rather than the value of the dwelling for the owner. It's not right that tenants don't pay. As for the rural/urban divide, there are plusses and minuses to both. Lack of public transport in country areas means necessity of owning a car. Private wells and septic tanks cost to run and maintain. Road maintenance tends be minimal, with landowners being responsible for hedge trimming.

beertons · 12-01-2018 7:11pm

I was always of the opinion that it should have been done by square foot. All of a sudden, our houses have risen in value, and they want us to increase our payments.

elperello · 12-01-2018 10:23pm

The Government should be on their knees every night saying a prayer of thanks that they have 97% compliance at current levels.
It's money for nothing and they need to find a formula to maintain it with increases at inflation rate only.

thereality · 12-01-2018 10:34pm

elperello wrote: »

The Government should be on their knees every night saying a prayer of thanks that they have 97% compliance at current levels.
It's money for nothing and they need to find a formula to maintain it with increases at inflation rate only.

I would hazard a guess why the LPT has such a high compliance rate is the 'no way, we won't pay' water brigade don't own a property. If LPT was paid by the occupant of the property, there would be uproar with LPT. A lot of the 'no way, we won't pay' brigade are not used to contributing to society

LPT is not money for nothing. That €400m or so not that would not be collected in LPT would have to sourced elsewhere via higher taxes.

LPT should not be linked with inflation. Government wages and infastructure spending is not linked to inflation. Why should a tax supporting them be linked to inflation?

California linked property tax to inflation and it is a disaster

elperello · 12-01-2018 10:43pm

thereality wrote: »

I would hazard a guess why the LPT has such a high compliance rate is the 'no way, we won't pay' water brigade don't own a property. If LPT was paid by the occupant of the property, there would be uproar with LPT. A lot of the 'no way, we won't pay' brigade are not used to contributing to society

LPT is not money for nothing. That €400m or so not that would not be collected in LPT would have to sourced elsewhere via higher taxes.

LPT should not be linked with inflation. Government wages and infastructure spending is not linked to inflation. Why should a tax supporting them be linked to inflation?

California linked property tax to inflation and it is a disaster

I meant that it is money for nothing in that they don't have to do anything to keep it rolling in. They have have got away with it and I suspect they know that.

Local Authority outgoings rise in line with inflation so if their income doesn't do likewise we will be back to square one with deficits all over the place in time.

13-01-2018 12:55am

beertons wrote: »

I was always of the opinion that it should have been done by square foot. All of a sudden, our houses have risen in value, and they want us to increase our payments.

Why should a bigger house cost more in property tax? Just because you want to slum it near a city is no reason why I should pay more for my far superior house compared to your urban hovel.

Zenify · 13-01-2018 11:24am

Not sure if this was already mentioned as I didn't read all thread. What would people think about linking the amount payable to the use of the home? Aka reduced rate if all the rooms are full. This would encourage proper use of housing and might help solve the current crises.

LirW · 13-01-2018 11:30am

I honestly see a problem in the enforcement of such an idea. Some houses have rooms only temporarily occupied because the children aren't home all the time (college for example), home offices, renting rooms in occupied houses out for a short period of time.
The proper assessment would be beyond difficult and leaves room to a) a lot of loopholes and b) people would probably fear some communistic scheme where they are basically "forced" to take people in by paying higher tax.

While the idea sounds good on paper, there are an awful lot of problems for people that can't move for certain reasons, like elderly that want to downsize but there's nothing to downsize to within their area.

Cyrus · 13-01-2018 12:01pm

Marina Fat Against wrote: »

Why should a bigger house cost more in property tax? Just because you want to slum it near a city is no reason why I should pay more for my far superior house compared to your urban hovel.

You are a gas man nox

Must be some pad you have

Had Helen turkington in have you ?

13-01-2018 12:19pm

Cyrus wrote: »

You are a gas man nox

Must be some pad you have

Had Helen turkington in have you ?

I was joking with my wording but in fairness I didn't really get that across in the post.

Urban areas are not slumming it at all obviously.

Zenify · 13-01-2018 12:26pm

LirW wrote: »

I honestly see a problem in the enforcement of such an idea. Some houses have rooms only temporarily occupied because the children aren't home all the time (college for example), home offices, renting rooms in occupied houses out for a short period of time.
The proper assessment would be beyond difficult and leaves room to a) a lot of loopholes and b) people would probably fear some communistic scheme where they are basically "forced" to take people in by paying higher tax.

While the idea sounds good on paper, there are an awful lot of problems for people that can't move for certain reasons, like elderly that want to downsize but there's nothing to downsize to within their area.

I completely understand that there would be a lot of variables which would complicate the idea. The concept would kill 2 birds with one stone. I just thought, at the very least it should be debated.

Cyrus · 13-01-2018 12:28pm

Marina Fat Against wrote: »

I was joking with my wording but in fairness I didn't really get that across in the post.

Urban areas are not slumming it at all obviously.

Half joking anyway

evosteo · 13-01-2018 12:35pm

Was the lpt not an emergency tax introduced during the recession due to stamp duty shortcomings? Yet if your lucky enough to purchase a house you pay still pay stamp duty and also have the pleasure of paying an annual charge. It should be phased out and stamp duty increased

thereality · 13-01-2018 12:37pm

elperello wrote: »

I meant that it is money for nothing in that they don't have to do anything to keep it rolling in.

What do you mean that they don't have to do anything to keep it coming in? You wanted a LA to hire a ton of staff to collect LPT, that revenue does with an ultra low collection rate? Or you wanted your LA to build a ton of random walls and other unnecessary things to justify the money?

Running a LA is expensive. Why do they need to something to please a few people?

elperello wrote: »

Local Authority outgoings rise in line with inflation so if their income doesn't do likewise we will be back to square one with deficits all over the place in time.

I don't think you have thought this true or possible even read my comment

What outgoing rise with inflation? Electricity and gas varies in price quite a lot. Construction costs have risen sharply in the last 5 year, while inflation has flatted lined. Wages in this country are not index linked

You are claiming their outgoings are linked to inflation, which they are not. To prevent deficits don't cap LPT to a inflation, that has little to do with costs. If a council has a deficit, would is preventing them hiking LPT to cover the deficit be inferior to hiking to a nominal inflation rate?

The_Conductor · 13-01-2018 12:53pm

evosteo wrote: »

Was the lpt not an emergency tax introduced during the recession due to stamp duty shortcomings? Yet if your lucky enough to purchase a house you pay still pay stamp duty and also have the pleasure of paying an annual charge. It should be phased out and stamp duty increased

Not exactly.
We had a property tax of sorts- which was repealed, I think in the late 70s.
We undertook- as part of our bailout terms- to introduce a property tax- as stamp duty was seen as cyclical and variable in nature- when you most need it- it tends to fall off a cliff.
The idea of the LPT- was to smooth out the the tax take related to the ownership of property- so it was predictable, and reliable in nature.

Currently- our LPT tax income- is over 200m a year higher than disbursements to local authorities.

First things first- we need to stop kidding people and rename the tax to accurately reflect- it is a property tax- its not a local authority, a local or a council tax- its simply, a property tax- the end.

Do we want to use it as a wealth tax (its current form- whether people want to admit it, or not)- or what form do we want the tax to take.

A property tax is uniquely successful in Ireland- because the population have an almost unique fascination with owning residential property. If we were to change the manner in which the tax is levied- it would be a matter of time- before we had to come back to reappraise how to levy a tax on the ownership of property.

A local property tax- should be a tax levied- locally- to reflect the cost of supplying services locally. A property tax- on the other hand- could well be a source of collection of central funds (as its impossible to hike headline tax rates here- given their artificial constructs as they are).

The more I think about it- I think we should levy two freestanding taxes- one a tax on residents of a property call it a 'local authority tax' to account for the actual costs associated with the supply of services/facilities and amenities in any given local authority area- the other, a property tax- divorced of any connection with the provision of services or the costs thereof- which would go towards central funds (and I would argue be used to increase the level at which the higher tax rate kicks in- as ours is at an artificially low level)- 100% definitely not used to increase expenditure- under any circumstances.

elperello · 13-01-2018 2:34pm

thereality wrote: »

What do you mean that they don't have to do anything to keep it coming in? You wanted a LA to hire a ton of staff to collect LPT, that revenue does with an ultra low collection rate? Or you wanted your LA to build a ton of random walls and other unnecessary things to justify the money?

Running a LA is expensive. Why do they need to something to please a few people?

I don't think you have thought this true or possible even read my comment

What outgoing rise with inflation? Electricity and gas varies in price quite a lot. Construction costs have risen sharply in the last 5 year, while inflation has flatted lined. Wages in this country are not index linked

You are claiming their outgoings are linked to inflation, which they are not. To prevent deficits don't cap LPT to a inflation, that has little to do with costs. If a council has a deficit, would is preventing them hiking LPT to cover the deficit be inferior to hiking to a nominal inflation rate?

Sorry for any confusion, I'll try to be clearer.

I mean that Revenue collect it with 97% compliance which is about as good as it gets. The money comes in and the LA's and Government spend it. Politically it is a success story.

I don't think there should be a change in collection methods.

If we allow the tax to remain linked to the price of property there will be peaks and troughs as the property market rises and falls. Ending up as you say with "building walls" to use up money when it is plentiful.

Running an LA is expensive as you say and all the more reason to establish a reliable steady source of income.

A link to inflation would need to be broader than consumer cost inflation taking into account all types of inflation.

It is a national property tax and I would prefer if the rates were not decided with an eye on the next election.

thereality · 13-01-2018 4:36pm

elperello wrote: »

Running an LA is expensive as you say and all the more reason to establish a reliable steady source of income.

What is stopping the Government hiking the LPT rate when the price of housing falls? If property price half tomorrow, double the tax rate and the collection of taxes remain the same. A simple solution to a simple problem

elperello wrote: »

A link to inflation would need to be broader than consumer cost inflation taking into account all types of inflation.

Index linking it is such a poor idea. We don't index taxes as we want the flexibility of hiking them.

There is real advantages to index linking.

salonfire · 13-01-2018 9:35pm

Marina Fat Against wrote: »

Why should a bigger house cost more in property tax? Just because you want to slum it near a city is no reason why I should pay more for my far superior house compared to your urban hovel.

You're so against urban life, but where did you go to university? Go if you need to go to the hospital, dentist, etc?

If rural life if so idyllic, why not stay there and live a subsistence life without the modern conveniences that comes with urban life?

elperello · 13-01-2018 10:20pm

thereality wrote: »

What is stopping the Government hiking the LPT rate when the price of housing falls? If property price half tomorrow, double the tax rate and the collection of taxes remain the same. A simple solution to a simple problem

Index linking it is such a poor idea. We don't index taxes as we want the flexibility of hiking them.

There is real advantages to index linking.

Nothing stopping them at all and it is appealing in it's simplicity. Problem is you are depending on a Government in the future to do the right thing. Disregard vested interests, ignore election implications etc.

I would prefer to put in place a system that works on "autopilot" so to speak. Just fix it so that the money rolls in with the minimum of controversy.

As I see it LPT is a kind of sleeping dog and if the Government start kicking it they may well get bitten.

The_Conductor · 13-01-2018 10:39pm

elperello wrote: »

Nothing stopping them at all and it is appealing in it's simplicity. Problem is you are depending on a Government in the future to do the right thing. Disregard vested interests, ignore election implications etc.

I would prefer to put in place a system that works on "autopilot" so to speak. Just fix it so that the money rolls in with the minimum of controversy.

As I see it LPT is a kind of sleeping dog and if the Government start kicking it they may well get bitten.

+1
There is a lot to be said for an auto-pilot approach to all of this.
Its akin to the RPZ- the rent control zones- they have a defined expiration date- it means politicians can simply point at it and decry that another government- or someone else- set it up in that manner (that they are complicit in running it- is neither here nor there- they have a scapegoat- and by god, they'll run with it).

Topgear on Dave · 14-01-2018 2:36pm

beertons wrote: »

I was always of the opinion that it should have been done by square foot. All of a sudden, our houses have risen in value, and they want us to increase our payments.

I actually like this part of it.

The voters should not be complaining about the rise in the tax, they should be complaining about the lack of accomodation available that causes those price rises.

Rents rise for all my friends but I dont think it matters to most actual home owning voters, they never notice.

If the property tax rises then everybody feels the burn and political pressure comes on to fix it.

Proposals to reform Property Tax Thread

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