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2021 Irish Property Market chat - *mod warnings post 1*

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  • Registered Users, Registered Users 2 Posts: 7,612 ✭✭✭fliball123


    schmittel wrote: »
    Tourism is not really supposed to be a big driver of domestic rents.

    No but currently are properties that were used for short term rent now being used for long term. I could be wrong but wasnt there an increase in rentals available once the likes of AirBnb was no longer possible?


  • Registered Users, Subscribers, Registered Users 2 Posts: 6,698 ✭✭✭hometruths


    fliball123 wrote: »
    No but currently are properties that were used for short term rent now being used for long term. I could be wrong but wasnt there an increase in rentals available once the likes of AirBnb was no longer possible?

    Yep, you're right - I just meant that if tourism is being relied upon to keep rents stable, it is weak fundamentals.

    Landlords offering STLs for tourism in RPZs is illegal. If this was actually enforced we could see rents drop very quickly.


  • Registered Users, Registered Users 2 Posts: 7,612 ✭✭✭fliball123


    schmittel wrote: »
    Yep, you're right - I just meant that if tourism is being relied upon to keep rents stable, it is weak fundamentals.

    Landlords offering STLs for tourism in RPZs is illegal. If this was actually enforced we could see rents drop very quickly.

    Ah no just countering props idea that we could see a 50% drop in rent in 2 years.


  • Administrators Posts: 55,127 Admin ✭✭✭✭✭awec


    I think a good way to prove that is to see how many times the CEO's of Apple, Microsoft, Google, Facebook etc. have visited their European headquarters in Ireland over the past several years.

    What a bizarre statement.


  • Registered Users, Registered Users 2 Posts: 1,045 ✭✭✭MacronvFrugals


    Construction sites to re-open on March 5, says Housing Minister


    Construction sites will be allowed to re-open on March 5, Housing Minister Darragh O’Brien has said.

    He said the closure of sites means the delay of the delivery of between 700 and 800 homes per month and he wants sites open again as soon as it is safe to do so.

    He said the decision to close sites was not to do with a concern of the safety of sites, but more to do with the wider national effort to limit social contacts.

    “We are working towards March 5, in terms opening up of the construction site sector, as it can be done safely. The provision of homes and housing is crucially important, essential, in my view,” he said.


    This should help not further constrict supply


    https://www.irishexaminer.com/news/politics/arid-40222511.html


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  • Registered Users, Registered Users 2 Posts: 4,909 ✭✭✭Villa05


    Today, Monday the 8th of Jan- they have announced a blanket payment of EUR203 a week (aka unemployment rate) for all those who retire at 65 but aren't eligible for the COAP or the NCOAP until age 66- without any necessity to pretend they are seeking employment etc. This new arrangement is to be implemented immediately. The Minister (Heather Humphreys) sees it as extremely progressive. Hmmm- lets see.

    Its not just housing though- its across the board- we may have one of the great redistributive tax systems- however, its at the cost of a squeezed middle who are well capable of working far more productively, but who don't, because our penal rate of taxes and charges kicks in at an abnormally low level of circa 35k. We need to incentivise this group- its hard to motivate people when a majority of their marginal income is going straight to the government.

    Miss the frequency of your postings of wisdom, but understand why

    If we standardised tax breaks on pensions and the other stuff at the 20 % rate or even lower and used the savings to widen the tax bands, would that have much of an impact
    The other concern is that the more money we put in people's pockets the more the construction/property sector hovers up so it becomes a 0 sum game at best. It actually becomes negative as the higher prices mean more people will need subsidised accommodation.

    How do we stop property being a leech on the economy?


  • Registered Users, Registered Users 2 Posts: 339 ✭✭IAmTheReign


    The article is very good. The writer points was that when you include corporation tax, the taxes on their workers salaries, VAT on their local purchases etc., that 40% of government revenues are dependent upon multinationals in Ireland and that the Government should be keeping a closer eye on the upcoming global tax changes and Biden, UK and EU looking to take these taxes and jobs back to their own countries.

    You can read one article in the Sunday Times free by signing up.

    Link to Sunday Times article here: https://www.thetimes.co.uk/article/cormac-lucey-white-house-has-its-finger-on-the-trigger-and-is-targeting-our-corporation-tax-take-vx7rh0zvr

    Fair enough if you include the income tax from the people working for them and the tax take on their spending I could see how you might get to 40%, but that's not what the poster I replied to was saying. He said specifically that Ireland was totally reliant on corporation tax which is obviously not true.


  • Registered Users, Registered Users 2 Posts: 339 ✭✭IAmTheReign


    schmittel wrote: »
    Yep, you're right - I just meant that if tourism is being relied upon to keep rents stable, it is weak fundamentals.

    Landlords offering STLs for tourism in RPZs is illegal. If this was actually enforced we could see rents drop very quickly.

    It is being enforced. there was an article posted on here the other day saying that 70% of suspected airbnb properties are now being used for long term rentals.


  • Registered Users, Registered Users 2 Posts: 1,045 ✭✭✭MacronvFrugals


    Its worth pointing out without social transfers our poverty rate would be 42%


    https://www.irishexaminer.com/news/spotlight/arid-40213142.html


  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


    markodaly wrote: »
    Strong mutterings that we will have some sort of tax-based claw back this year in the budget, given that we are spending way above what was forecast last year.

    To put simply, Ireland and Europe and a lot of the world to be fair are floating in money, to keep the show on the road during the pandemic. If we get out of it by the end of the year, the waterfall of new money will dry up and the bills will have to be paid, which means tax rises, unemployment and longer-term issues of debt.

    No one really knows how all this is going to play out. But we could be in for a bit of a contraction over the next year or two.


    I, for one, will be going on a big spending spree as soon as this whole virus thing is over.
    But if taxes go up, i will batten down the hatches, and spend nothing while I prepare to have even more of my hard earned money taken out of my pocket over the next few years.

    They need to stick to their plan of not gouging people and then people will start spending. Start gouging them and it will have the opposite effect.


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  • Registered Users, Registered Users 2 Posts: 4,909 ✭✭✭Villa05


    fliball123 wrote:
    Could this be a game changer for the rental market? Just listening to P.Kenny talking about it on newstalk right now. 25% below market and long term contracts and only for people working.

    From my time when I was renting, a good tenant could nearly always find a good landlord and together both would be happy with a significant discount on market rates.

    I like the focus on people working for this scheme, but considering rents were 40% above 2007 peaks recently. I think we could do better or make this an income generator for the state to fund expansion

    schmittel wrote:
    Yep, you're right - I just meant that if tourism is being relied upon to keep rents stable, it is weak fundamentals.

    Fair enough if you include the income tax from the people working for them and the tax take on their spending I could see how you might get to 40%, but that's not what the poster I replied to was saying. He said specifically that Ireland was totally reliant on corporation tax which is obviously not true.

    We were not totally reliant on construction taxes in the noughties. Its the recurring spending that is implemented from these taxes that is the issue


  • Registered Users, Registered Users 2 Posts: 2,203 ✭✭✭PropQueries


    Its worth pointing out without social transfers our poverty rate would be 42%


    https://www.irishexaminer.com/news/spotlight/arid-40213142.html


    And it's basically down to a dysfunctional housing policy. The only cost that materially impacts on the lower and middle income groups is housing. Every other cost is relatively meaningless.

    And if the older middle class groups really want to delve into "social transfers", I think they should be very wary in case the younger generation (who are now getting older and more politically and economically astute by the day), start looking into these pensions that us older groups in both the private and public sector believe we're "entitled" to.


  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


    Villa05 wrote: »
    Tax is dodged by reits here, I'd doubt it very much if that is the case in Germany

    What are the "populist" policies in the Irish housing market. I'm struggling to pinpoint one. Is it rent controls
    Its quiet clear to most here that the private sector is dictating policy and their agenda is profit for them and risk to the state

    No country should be any way reliant on construction. It is a sector that is byproduct of the economy not a driver of it

    How difficult is it to plan for a supply demand balance when you have over 20 years notice of a person being born and at an age when they might have a housing need or 30 years when they might buy.
    We know from income data that 50% of the population will struggle to buy/rent then we need to have alternatives to the private sector for that.

    We are not trying to reinvent the wheel here


    I rented in Germany for a few years.
    Try staying in a rental and not paying your rent over there.
    You wouldnt get away with it like in Ireland.
    Less risk than for the property owner in Ireland.
    In Ireland risk is a big part of the rent.


  • Registered Users, Registered Users 2 Posts: 5,367 ✭✭✭JimmyVik


    Some good points. But I think peoples opinions on the possible savings achievable on social welfare spending were debunked by the actual Government figures on the 2019 c. €20 billion "social welfare" spend. Even if they cut dole down to zero, it would have a minimal impact on Government revenues while also increasing spending on crime, homelessness, anti-social behaviour etc. i.e. no net benefit to government revenues outside of making the lives of the bottom 1% more miserable than they already are and also making the lives of the middle class more miserable by having to live with this extra crime etc. IMO

    Link to the breakdown of the 2019 "social welfare" spending here: https://whereyourmoneygoes.gov.ie/en/socialprotection/2019/




    I have an idea.
    Id like to take a break and go on the dole for a few years.
    Sick of paying tax through every orifice for the last 25 years.
    But no, im not allowed to get the dole if I quit. Im like the slave that is getting the blood rung out of him to feed the people who do nothing.Let someone on the dole take my job, please. Let them pay the tax and i'll gladly swap that job for their dole at this point. Too much tax, from all directions.


  • Registered Users, Registered Users 2 Posts: 439 ✭✭TobyHolmes


    Its worth pointing out without social transfers our poverty rate would be 42%


    https://www.irishexaminer.com/news/spotlight/arid-40213142.html


    so ireland is basically a liberal welfare state with archaic housing policies.


    im all for tax money being used wisely towards such programs to help those in need - however questions need to be asked (and answered) when people earning good income salaries cant even get on the property ladder due to lack of supply driving prices up.



    For example - to deal with supply why cant people get planning permission for alternative housing such as shipping containers or log cabins etc. as a main residence if they own the land.



    because the state doesnt want that? why not?



    there is no creative thinking at all.


  • Registered Users, Registered Users 2 Posts: 2,203 ✭✭✭PropQueries


    JimmyVik wrote: »
    I rented in Germany for a few years.
    Try staying in a rental and not paying your rent over there.
    You wouldnt get away with it like in Ireland.
    Less risk for the property owner in Ireland.
    In Ireland risk is a big part of the rent.


    What are the mechanisms available to landlords over there if a tenant doesn't pay their rent?


  • Registered Users, Registered Users 2 Posts: 1,173 ✭✭✭Marius34


    What are the mechanisms available to landlords over there if a tenant doesn't pay their rent?

    Loss 3 months rent worth deposit for the start.


  • Registered Users, Subscribers, Registered Users 2 Posts: 6,698 ✭✭✭hometruths


    JimmyVik wrote: »
    I rented in Germany for a few years.
    Try staying in a rental and not paying your rent over there.
    You wouldnt get away with it like in Ireland.
    Less risk for the property owner in Ireland.
    In Ireland risk is a big part of the rent.

    Which is exactly why we see a large number of vacant properties. For many the risk/reward of a tenant is not worth it, even with high rents.

    In a rising market, they are better off keep it vacant, get income from STLs if they wish.

    Even if they don't go down the STL route and forego the income, if the market is rising 2-3% per annum they are still doing ok compared to having the money sitting in the bank.

    Factor in that many of these properties have CGT exemptions on them and it is a no brainer.

    Of course it is only a no brainer as long as the market is rising. If market starts to turn and CGT benefits are diminishing, the no brainer choice becomes do you put it on the market for sale or for rent?


  • Registered Users, Registered Users 2 Posts: 2,203 ✭✭✭PropQueries


    JimmyVik wrote: »
    I have an idea.
    Id like to take a break and go on the dole for a few years.
    Sick of paying tax through every orifice for the last 25 years.
    But no, im not allowed to get the dole if I quit. Im like the slave that is getting the blood rung out of him to feed the people who do nothing.Let someone on the dole take my job, please. Let them pay the tax and i'll gladly swap that job for their dole at this point. Too much tax, from all directions.


    Good luck on paying for rent (yes they do pay some no matter how small), food, electricity, gas, broadband, mobile phone, clothing, footwear, car, petrol, insurance, travel once a year to a wedding etc. on €203 a week.

    Just out of curiosity. For the posters who seem to truly believe that giving up their job and being on the dole would make them better off, have they looked at their ESB/Gas bill after Christmas?


  • Registered Users, Registered Users 2 Posts: 2,000 ✭✭✭Hubertj


    schmittel wrote: »
    Which is exactly why we see a large number of vacant properties. For many the risk/reward of a tenant is not worth it, even with high rents.

    In a rising market, they are better off keep it vacant, get income from STLs if they wish.

    Even if they don't go down the STL route and forego the income, if the market is rising 2-3% per annum they are still doing ok compared to having the money sitting in the bank.

    Factor in that many of these properties have CGT exemptions on them and it is a no brainer.

    Of course it is only a no brainer as long as the market is rising. If market starts to turn and CGT benefits are diminishing, the no brainer choice becomes do you put it on the market for sale or for rent?

    I think risk is definitely a big factor. Links to a point I made this morning about RTB and enforcement of regulations. If landlord and tenant had more faith in system it would help overall.
    If someone does sell their investment property where do they put their money though? In bank at 0 or negative? Sell and Sit on cash for 12-18 month then buy again?
    Or invest elsewhere?


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  • Registered Users, Registered Users 2 Posts: 21,192 ✭✭✭✭cnocbui


    Leo Varadkar last November called for “a grown-up conversation on increasing Employers' and Employees' PRSI to fund a reformed social insurance system, including income-linked unemployment benefits.”

    ...

    There’s only property, pensions and inheritance taxes left to tax IMO

    ...

    Link to RTÉ article on Leo calling for a grown-up conversation on PRSI hikes here: https://www.rte.ie/news/2020/1123/1180017-low-pay-prsi/

    Ireland already has the highest inheritance taxes in the world. Make them even higher, why not, comrade.


    ...

    We are already signed up to continuous increases in carbon taxes- alongside a new road tax that is divorced from the notion of crucifying older cars while not making new cars pay their shares.

    Income taxes may not increase- however, we urgently need a new band- and a broadening of the base to bring more people into the tax bands- including a tally of *all* income (the whole notion of exempt income, be it social welfare disbursements, subsidised housing or whatever- it all needs to be tallied and taxed). Until such time as the notion of a free-hand-out gets hit on the head for once and for all, we're going to be sunk.

    Residential property tax- is a joker- its set at such an implausibly low level on the one hand, and the size of a dwelling has no input into the tax on the other hand. It makes perfect sense to thoroughly reform this- however, the whole notion of people living in rural mansions versus shoebox apartments in Dublin- also needs to be addressed in this one.

    Its not just housing though- its across the board- we may have one of the great redistributive tax systems- however, its at the cost of a squeezed middle who are well capable of working far more productively, but who don't, because our penal rate of taxes and charges kicks in at an abnormally low level of circa 35k. We need to incentivise this group- its hard to motivate people when a majority of their marginal income is going straight to the government.

    ...

    A lot of the discussions and changes that have to happen- are going to be terribly unpopular, and our gormless politicians have shown that they don't have the gonads to look beyond the media and the court of public opinion. Frankly- its a foregone conclusion that they are going to fail on this.

    While I agree with you about the necessity to broaden the tax base, I vehemently disagree about raising property taxes. My local council is so well funded that in my village, they spent an absolute fortune ripping up perfectly good concrete sidewalks and replacing them with pavers. There is no way in hell I see any need to raise property taxes by 400-500%. In other countries, property taxes such as you propose come with the provision of rubbish collection services and the like. They are not justified here.

    I'd like to have a grown up conversation with Varadkar. This country already places a heavy tax burden on income tax payers, and not much on corporations. It's tax burden that is important, not whether the tax is called carbon, PRSI, Income, Inheritance, TV Licence, Insurance surcharge or whatever.

    Irish governments only have one sort of grown-up conversation they want to have and that is how much more they can take, it's never about reforming the costs, it's always stuff like increasing staffing levels of Revenue so they can take more, never reducing staffing levels of the public service so they don't need to take more. It's never about government doing stuff to reduce the utterly ridiculous expensiveness of Irish society and it's disfunctions. The legal system; the cost of insurance - these are in the remit of the government to make vastly less costly, but don't - myriad other costs that the government imposes via requirements, such as BER certificates and a disfunctional 19th century property register system. Western Australia fixed that one about 30 years ago. In WA you can go cradle to grave without needing to hire a lawyer. Property transactions can be swift and an absolute breeze and low-cost, since you don't need a f'n lawyer!

    This government stops people from buying cheaper generic meds from elsewhere in the EU and the government, or pharmacists, conspire to ensure they are effectively unavailable here. The health system is deliberatly configured to be slow, inefficient and costly - not being able to see a specialist without a referral, for example.

    The Public Service is so fu*king bloated that they pay people to feel up incoming parcels in case someone tries to buy functional herbal medicines that are legal world-wide - then pays them to write you a snarky supercillious letter telling you you youv'e been a naughty girl/boy and not to do it again. So long as my taxes are paying for that sort of sh​it you can keep your not needed tax increases.

    Meanwhile, my son has had an application for an Irish passport pending for 16 f'n months!!!!!! Greater efficiency is needed, not more money.

    Ireland has the second highest paid public servants in the EU, and too many of them, that's what needs fixing, not more gouging to pay for them.


  • Registered Users, Subscribers, Registered Users 2 Posts: 6,698 ✭✭✭hometruths


    Hubertj wrote: »
    I think risk is definitely a big factor. Links to a point I made this morning about RTB and enforcement of regulations. If landlord and tenant had more faith in system it would help overall.
    If someone does sell their investment property where do they put their money though? In bank at 0 or negative? Sell and Sit on cash for 12-18 month then buy again?
    Or invest elsewhere?

    That's the big question? What do they do with the money? I suspect many at that stage would decide the risk/reward of rental income becomes worth it to offset risk of falling capital values.

    They may even follow the funds example and enter into a long term council lease. That's what I'd do.

    For others who decide that the risk/reward of rental income is not worth it, even in a falling market. then presumably cash or other asset classes are preferable - a basket of investment trusts, long term hold, low income, low hassle.


  • Registered Users, Registered Users 2 Posts: 311 ✭✭SmokyMo


    Dole - welfare is a grain in sand.. just over 1B. Peasants are worrying about the crumbs of kings table.
    https://whereyourmoneygoes.gov.ie/en/socialprotection/2019/


  • Registered Users, Registered Users 2 Posts: 20,967 ✭✭✭✭Cyrus


    SmokyMo wrote: »
    Dole - welfare is a grain in sand.. just over 1B. Peasants are worrying about the crumbs of kings table.
    https://whereyourmoneygoes.gov.ie/en/socialprotection/2019/

    where do you get 1bn?


  • Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    Villa05 wrote: »
    How do we stop property being a leech on the economy?

    Two separate taxes, one on property residents (a la the UK poll tax) and a separate free standing tax on property ownership. Let residents pay for services, facilities and amenities in their immediate local authority areas, based on the size and utility worth of the property (such as the number of bedrooms and the square footage of the property)- while property owners are taxed purely on the value of the property.

    In one foul swoop (well two, but you know what I mean)- you get the residents of various local authority areas to fund the activities of *their* local authorities- while you raise funds for the central exchequer based on the value of the property (and no other consideration).

    All residents and all property owners are autoenrolled (Revenue are good at this) and anyone who pleads penury can apply to the local authority for a rebate- but no rebates on the value of the property.

    Applies across the board- REITS etc- no exceptions for anyone.

    ?


  • Registered Users, Subscribers, Registered Users 2 Posts: 6,698 ✭✭✭hometruths


    All residents and all property owners are autoenrolled (Revenue are good at this) and anyone who pleads penury can apply to the local authority for a rebate- but no rebates on the value of the property.

    Indeed. Often amazed that Revenue seem to be able to enforce things very easily that councils and other public bodies say are impossible!


  • Registered Users, Registered Users 2 Posts: 3,619 ✭✭✭Timing belt


    Villa05 wrote: »
    How do we stop property being a leech on the economy?

    Increase supply and limit market manipulation from everyone government/landlords/tenants & mortgage arrears.

    What is it the worst that happens if we end up with to much supply.... surely it is better than a lack of supply as it gives options as long as it’s not controlled by a monopoly.


  • Moderators, Society & Culture Moderators Posts: 32,286 Mod ✭✭✭✭The_Conductor


    SmokyMo wrote: »
    Dole - welfare is a grain in sand.. just over 1B. Peasants are worrying about the crumbs of kings table.
    https://whereyourmoneygoes.gov.ie/en/socialprotection/2019/

    Strip pensions and children's payments (childrens benefit etc) out of the equation- and you still have a cool 10billion to go through to identify cuts.

    Norway and other Nordic countries can afford generous social welfare systems- hell Norway holds over 200k per head of population in its sovereign wealth fund- Ireland, on the other hand- owes 54k per head of population (and rising).

    If/when interest rates ever increase- we are so screwed. Even in this era of low interest rates- we still paid roughly 5.5 billion in interest on sovereign debt in 2020...........

    We need to strip billions out of our expenditure, and identify new methods of taxing the Irish populace (and close loopholes that the wealthy like to exploit- including the 180 day rule etc).


  • Registered Users, Registered Users 2 Posts: 2,203 ✭✭✭PropQueries


    Strip pensions and children's payments (childrens benefit etc) out of the equation- and you still have a cool 10billion to go through to identify cuts.

    Norway and other Nordic countries can afford generous social welfare systems- hell Norway holds over 200k per head of population in its sovereign wealth fund- Ireland, on the other hand- owes 54k per head of population (and rising).

    If/when interest rates ever increase- we are so screwed. Even in this era of low interest rates- we still paid roughly 5.5 billion in interest on sovereign debt in 2020...........

    We need to strip billions out of our expenditure, and identify new methods of taxing the Irish populace (and close loopholes that the wealthy like to exploit- including the 180 day rule etc).


    I think that's already beginning to happen. It was reported in the FT today: USA "30-year bond yield rises to 2% on expectations that government support will fuel price rises".

    How long more will investors be willing to lend to Ireland at 0%?


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  • Registered Users, Registered Users 2 Posts: 4,909 ✭✭✭Villa05


    schmittel wrote:
    They may even follow the funds example and enter into a long term council lease. That's what I'd do.
    Is that realistic though
    One dodges tax
    The other may pay more than half in tax

    What, if any, other prioduct/service has this level of tax inequality


This discussion has been closed.
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