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Property Market 2018

castle2012

With supply still very tight. A homeless problem. Rising employment. It sure looks like where set for more large rises. There's not much to suggest otherwise. Any thoughts?

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LirW

Isn't there council tax to pay for fixed term renters that stay more than 6 months?

Bob24

Cyrus wrote: »

https://www.uktaxcalculators.co.uk/
http://services.deloitte.ie/tc/Default.aspx

comparing a single person with no pension contribution, nothing fancy, you can double check them if you doubt them.

as to er social contributions you will note that i compared personal income tax and social contributions

Employer social contributions are not included in personal tax calculators as they are paid by the employer and not the employee (I.e. they come on top of your gross income but are still taxation on your labour). Not a valid comparison.

To talk about the tax system we know (the Irish one) and clarify for you, your Irish link would take into account employee PRSI and USC, but not employer PRSI.

That’s the problem, doing comparisons require detailed understanding of the tax systems not to overlook anything and people will just do a quick calculation to price their point with invalid or incomplete figures instead.

Serious comparisons only based on numbers and done by tax experts like the one I posted are telling the real unbiased story.

Cyrus

Bob24 wrote: »

Employer social contributions are not included in personal tax calculators as they are paid by the employer and not the employee (I.e. they come on top of your gross income but are still taxation on your labour). Not a valid comparison.

To talk about the tax system we know (the Irish one) and clarify for you, your Irish link would take into account employee PRSI and USC, but not employer PRSI.

i'm not sure if you think you are educating me here? you aren't.

What i said i was comparing was the effective tax rate on the individual, the individual doesn't care about what it costs an employer in social contributions as it doesn't impact their take home pay.

both link will give the tax home pay for a PAYE individual net of income tax and social contributions.

my comparison is valid.

your point about employer social contributions being relatively low is a fair one compared to some eu countries but is of course offset by the level of corporation tax that they pay.

draiochtanois

This post has been deleted.

Bob24

Cyrus wrote: »

What i said i was comparing was the effective tax rate on the individual, the individual doesn't care about what it costs an employer in social contributions as it doesn't impact their take home pay.

If you think your total salary cost for your employer doesn’t matter to you, you need to rethink.

Your labour cost obviously includes the full amount it costs your company to pay you and taxation on your labour includes both employer and employee taxation related to your wage.

To put it simply: if the government was to reduce your income tax and increase employer PRSI by my the same amount, your company would pay you less and your take him salary would be exactly the same.

So any serious conparison will include all taxation on labour no matter who pays it.

Cyrus

Bob24 wrote: »

If you think your total salary cost for your employer doesn’t matter to you, you need to rethink.

Your labour cost obviously includes the full amount it costs your company to pay you and taxation on your labour includes both employer and employee taxation related to your wage.

To put it simply: if the government was to reduce your income tax and increase employer PRSI by my the same amount, your company would pay you less and your take him salary would be exactly the same.

So any serious conparison will include all taxation on labour no matter who pays it.

any serious comparison?

you have gone off on your own tangent, its obvious with all the other posts about personal income tax that people are referring to an employees take home pay, not an employers cost to employ them.

and if the government reduced income tax and increased er prsi my salary would stay the same and my take home would increase, there is no provision in my employment contract for what you outlined.

Johngoose

If house prices spiral to ridiculous levels it’s a good thing,as they will crash again.

Carlos Orange

Johngoose wrote: »

If house prices spiral to ridiculous levels it’s a good thing,as they will crash again.

Can house prices spiral to ridiculous levels when the mortgage available is limited to 3-4 times salary?

Henbabani

Johngoose wrote: »

If house prices spiral to ridiculous levels it’s a good thing,as they will crash again.

definitely, as long as they go on 13-15% per year, we can be sure they will crash faster.
Moderation would be good for both sides, otherwise - crash.

Bob24

Cyrus wrote: »

and if the government reduced income tax and increased er prsi my salary would stay the same and my take home would increase, there is no provision in my employment contract for what you outlined.

Average wages in Ireland would drop to rebalance (ie new employees would get lower salaries and your pay raises wouldn’t cover inflation). Of course all taxation on labour should be included.

Now if people want to move to another European country and see how it goes they are free to do so. But most will realise the grass was actually not greener (in terms of taxation, there are other reasons to move to other European countries).

[Deleted User]

Bob24 wrote: »

Average wages in Ireland would drop to rebalance (ie new employees would get lower salaries and your pay raises wouldn’t cover inflation).

Or I suspect in small companies like the crew I work for we might move from having 30 engineers to having 28/29 as the costs rise.

[Deleted User]

Johngoose wrote: »

If house prices spiral to ridiculous levels it’s a good thing,as they will crash again.

I fail to see the good thing here.

Cyrus

Bob24 wrote: »

Average wages in Ireland would drop to rebalance (ie new employees would get lower salaries and your pay raises wouldn’t cover inflation). Of course all taxation on labour should be included.

Now if people want to move to another European country and see how it goes they are free to do so. But most we realise the grass was actually not greener.

you are making an assumption there, to present it as a fait accompli is wrong.

anyway, i agree with you on your second point, i have a decent job here and was offered the chance to move to London, i reckoned that i would need to earn 3 times as much to have a similar house in a similar area and maintain the familys lifestyle. So Ireland will do for me :pac:

Bob24

draiochtanois wrote: »

So I did ...

Guess what - the example they (and you cherry picked) is very slightly over where income in Ireland starts being taxed at our marginal rate.

€34,847 versus €34,550

And guess what values they use for "typical" salaries in a few other countries:

€46,693 Belgium
€47,042 Germany
€49,235 Netherlands

It becomes clear to me this paper was written to make Ireland look like it has low taxes on income

They’re taking the average worker, it is fair enough. If you have another study with a different methodology which shows Ireland has high taxation level on labour you can post it here. But I suspect depending on methodology Ireland will range between medium-low and very low level of labour taxation compared to other European countries, it will never be high as we are miles away from the likes of France and Belgium.

See another study here which also says Ireland’s labour tax burden isn’t high at all: https://taxfoundation.org/comparison-tax-burden-labor-oecd-2016/

But I guess the OECD which defined the methodology is biased and voluntarily cherry picked figures to misrepresent Ireland?

Bob24

And to add to my previous post And I’ll reiterate what I said before: on top of the fact that labour taxation is not that high, we have very low corporate tax so companies have more money here than elsewhere in Europe to pay a high gross salaries. These two taxes can’t be looked at in isolation as the exchequer has to get money somewhere (I.e. people who think there should be significant labour tax reduction have to acknowledge it means large increase of corporate tax which would obviously have consequences on our economy and thus on workers companies paying more corporate tax would likely mean less jobs and lower wages in Ireland ... not saying the way we balance our taxes between labour and corporate profits is not a valid discussion or have, but thinking we can significantly cut one area without accordingly increasing the other one is dreaming).

Marius34

Depends on what tax we speak, Ireland may look Low or High taxed country, but for average person with a payroll only, I'll say it’s relatively low.
If you get anything other than payroll it’s difficult to compare with other countries, because in Ireland it's all sums up as your income, meanwhile in most countries that's not a case.
That's why I would divide in separate segments to compare with other European countries:
Corporate tax - Low
Payroll tax - Very Low (for low wage) to Average/High (for Medium/High wage)
Self-Employed/Contractor - High
Additional income over wage - Very High.

Bubbaclaus

Bob24 wrote: »

And to add to my previous post And I’ll reiterate what I said before: on top of the fact that labour taxation is not that high, we have very low corporate tax so companies have more money here than elsewhere in Europe to pay a high gross salaries. These two taxes can’t be looked at in isolation as the exchequer has to get money somewhere (I.e. people who think there should be significant labour tax reduction have to acknowledge it means large increase of corporate tax which would obviously have consequences on our economy and thus on workers companies paying more corporate tax would likely mean less jobs and lower wages in Ireland ... not saying the way we balance our taxes between labour and corporate profits is not a valid discussion or have, but thinking we can significantly cut one area without accordingly increasing the other one is dreaming).

Ireland's labour taxes are the most progressive in the EU. That means the higher earners pay a ****load of tax and low earners pay nothing. Just because the overall tax take is considered "below average" on an overall basis doesn't mean our income taxes applied to individuals are low.

You are completely misinterpreting the data outlined in the study. Not sure whether you have an agenda or whether you have just innocently done it, but you need to take a step back and look at what is actually being shown.

Bob24

Bubbaclaus wrote: »

Ireland's labour taxes are the most progressive in the EU. That means the higher earners pay a ****load of tax and low earners pay nothing. Just because the overall tax take is considered "below average" on an overall basis doesn't mean our income taxes applied to individuals are low.

You are completely misinterpreting the data outlined in the study. Not sure whether you have an agenda or whether you have just innocently done it, but you need to take a step back and look at what is actually being shown.

As I have said before I do understand that taxation level relative to other countries varies greatly depending on income and I agree we need more tax brackets at the higher income levels so that the rate doesn’t reach 40% that quickly.

*but* I would completely disagree in saying “higher earners pay a ****load of tax” compared to other EU counties (depending in income range Irish workers are between very low and medium in terms of labour taxation, none are high). Those who are the most at a disadvantage are probably in the 50k-80k salary range (wild guess, not saying it is 100% correct and it really depends on which poultry you compare to) and they indeed possibly have a slightly above average labour taxation level compared to other EU countries. But they certainly don’t pay ”a ****load” and as per my post you quoted they should not forget that their gross salary would be lower if we didn’t have low corporate tax and exchequer money has to come from somewhere (and to be clear I include myself in that group and have worked elsewhere in Europe).

Just as an exemple of what people can overlook, in France the equivalent of employer PRSI is close to 50% of the employee’s salary and on average the equivalent of employee PRSI/USC is between 20 and 25%. Ireland is very, very, far from that so even if you pay 40% income tax on a large part of your salary while a French employee pays 30% because on that same share because they don't hit the French 41% bracket before routhly 72k of salary*, you labour in Ireland is still taxed much less than theirs if you take everything into account. Tax allowances and tax credits also have a large influence on total income tax paid and can vary greatly depending on countries.

I have an impression that those here saying that we have high labour taxation levels probably underestimate the impact of these different taxation mechanisms and just look at a few headline rates and tax brackets, and they certainly haven’t posted a single serious study/report here documented with numbers to back their statement.

Anyway at this stage it's going off topic and it might be time to agree to disagree.

Mickiemcfist

So ehh, that property eh!

Samuel T. Cogley

My tenants are moving out so I'm trying to convince the wife we should sell. Not keen on losing money on it but not sure how long we have before we'll see a correction. Anyone fancy getting the crystal ball out? D8 btw.

Bob24

Samuel T. Cogley wrote: »

My tenants are moving out so I'm trying to convince the wife we should sell. Not keen on losing money on it but not sure how long we have before we'll see a correction. Anyone fancy getting the crystal ball out? D8 btw.

Totally non-binding prediction from my crystal ball: we have 1 to 4 years of decent price increases to go with a reasonnable possibility for them to rise above previous 2007 peak prices in the next 2 years* (exact duration depending on if/when some kind of external factor or economic crises triggers a correction during that period). If the correction is triggered by an external/economic crisis (which my crystal ball says has 40% probability to happen within that timeframe), it will hit hard and unexpectedly and prices could fall fairly sharply, otherwise it will just be some kind of stabilisation at the end of that 4ish years period as we hit affordability limits.

I think if I was you and the long term plan wasn't to keep the property, I would seriously consider selling as well. Maybe it will seem like it was a bad idea in 4 years time as prices will have risen, but you could also end-up with a very troublesome tenant and/or price could drop at some point within that timeframe and you could miss the boat while seeing your rental income drop if the rental market is not as pressured anymore.

* and to be clear I hate to say this and am not cheering about it, but objectively the probability of it happening is increasing

Bob24

Samuel T. Cogley wrote: »

My tenants are moving out so I'm trying to convince the wife we should sell. Not keen on losing money on it but not sure how long we have before we'll see a correction. Anyone fancy getting the crystal ball out? D8 btw.

If we are playing that game, what does your own crystal ball say btw? ;-)

Samuel T. Cogley

Bob24 wrote: »

If we are playing that game, what does your own crystal ball say btw? ;-)

Mine says take 250K and run They're not quite there yet. The wife see's it as losing 45K - we paid 295. I see it as getting out while the goings good. This is only a one bed and we overpaid even at the height of the boom.

Bob24

Samuel T. Cogley wrote: »

Mine says take 250K and run They're not quite there yet. The wife see's it as losing 45K - we paid 295. I see it as getting out while the goings good. This is only a one bed and we overpaid even at the height of the boom.

I understand you. The amounts involved are much smaller in my case but I recently signed contracts to sell a rental property I have abroad and in spite of the slight loss I’m making I’m happy to be able to forget about it and move on as there were many issues with the place and the rental market in that city has become pretty bad since I bought and never quite recovered.

Johngoose

Samuel T. Cogley wrote: »

Mine says take 250K and run They're not quite there yet. The wife see's it as losing 45K - we paid 295. I see it as getting out while the goings good. This is only a one bed and we overpaid even at the height of the boom.

If I were you I’d wait a year and sell this time next year. Very easy to get a tenant in at the moment

Bubbaclaus

Samuel T. Cogley wrote: »

My tenants are moving out so I'm trying to convince the wife we should sell. Not keen on losing money on it but not sure how long we have before we'll see a correction. Anyone fancy getting the crystal ball out? D8 btw.

What's the rent? I'll take it

Samuel T. Cogley

Bubbaclaus wrote: »

What's the rent? I'll take it

Rent controlled

I'm afraid it's not going to be available for a while and because it's rent controlled I've a few people already looking at it. Sorry Bubbaclaus.

Bob24

Samuel T. Cogley wrote: »

Rent controlled I'm afraid it's not going to be available for a while and because it's rent controlled I've a few people already looking at it. Sorry Bubbaclaus.

Out of curiosity if you rent it again will you bother advertising it or you will just go with people who have heard about it in your own circle or have been referred to you? (I'm not looking for a place :-) - just wondering how landlords usually do it as I will leave my well below market rate apartment soon and I know people who would be interested in taking it over - don't know of there is any point mentioning them to the landlord).

Bob24

Johngoose wrote: »

If I were you I’d wait a year and sell this time next year. Very easy to get a tenant in at the moment

I'd agree waiting another year is very likely to lead to a higher selling price and pretty low risk in terms of a correction/crash happening by then.

The reason I was saying in my previous post I would consider selling now is that since the tenant is leaving there is an opportunity window, and if starting a new tenancy there is a risk of ending-up with bad tenant which causes problems and/or refuses to leave when they get a notice prior to the sale. Maybe not a huge risk, but not insignificant and could be very annoying if it happens.

But if there is a known and safe tenant lined-up, I would indeed wait another year.

[Deleted User]

Samuel T. Cogley wrote: »

Mine says take 250K and run They're not quite there yet. The wife see's it as losing 45K - we paid 295. I see it as getting out while the goings good. This is only a one bed and we overpaid even at the height of the boom.

If you overpaid at the height of the boom at 295 surely you won't get 250k now?