Property tax changes will see 36% face higher tax

magicbastarder · 02-06-2021 2:01pm #1

The owners of mid-to-high value range residential properties which have seen above average price increases are most likely to face a higher local property tax bill under a revised structure for the tax.

The Cabinet has agreed to cut the rate at which the tax is charged and to broaden the bands in a move that will see the bills of more than 50 per cent of households remain the same.

https://www.irishtimes.com/news/politics/property-tax-changes-will-see-36-face-higher-tax-and-valuations-reviewed-every-four-years-1.4581976

i've no moral issue at all with paying property tax, but do the government not realise the optics of doing this when property values are completely divorced from what they should be, is lunacy?
my property tax will probably come close to doubling (we bought soon after the bottom, so we were lucky, so don't cry for me argentina)

also, no house has sold along our road in several years; i've no way of knowing what the market value of the house is.

randd1 · 02-06-2021 2:12pm

magicbastarder wrote: »

https://www.irishtimes.com/news/politics/property-tax-changes-will-see-36-face-higher-tax-and-valuations-reviewed-every-four-years-1.4581976

i've no moral issue at all with paying property tax, but do the government not realise the optics of doing this when property values are completely divorced from what they should be, is lunacy?
my property tax will probably come close to doubling (we bought soon after the bottom, so we were lucky, so don't cry for me argentina)

also, no house has sold along our road in several years; i've no way of knowing what the market value of the house is.

Any property tax should be done purely on square meters taken up by each floor and the whole front/back garden, on a scale based on combined household income.

magicbastarder · 02-06-2021 2:13pm

those living out in the country with houses far bigger than a similarly valued house in dublin will riot if they do that
(note: i am not actually disagreeing nor agreeing with you there)

CageWager · 02-06-2021 2:18pm

Im perfectly comfortable with people paying tax on assets they own (myself included) that have seen massive inflation through their lifetime. Tax wealth, not income.

magicbastarder · 02-06-2021 2:22pm

i'd agree with you there, with the caveat that people are being asked to pay tax based on the artificial value of their house caused by a failure of governance.
i don't *want* my house to be worth what the market value would claim it is.

[Deleted User] · 02-06-2021 2:25pm

CageWager wrote: »

Im perfectly comfortable with people paying tax on assets they own (myself included) that have seen massive inflation through their lifetime. Tax wealth, not income.

Absolutely. It’s something that most people are comfortable with. It’s a progressive tax on wealth. It’s the type of thing that is a no-brainer for a country ran on social democratic principles. The same would apply on charging for water based on usage.

ixoy · 02-06-2021 2:25pm

I'd be curious to see what they use to value the properties. People who bought in the last few years will most likely have used the valuation map of their area, rather than the sell price (even if it's meant to be the latter) so it'll depend on how much prices have increased. The bands having gone up 60% should cover a lot of the increase though, at least in the last five years.

suicide_circus · 02-06-2021 2:28pm

CageWager wrote: »

Im perfectly comfortable with people paying tax on assets they own (myself included) that have seen massive inflation through their lifetime. Tax wealth, not income.

So a millionaire playboy living in rented penthouse pays no property tax but a couple on or below the average industrial wage who scrimped and saved to buy a modest semi d to raise their kids in do....

Perhaps the couple should divest themselves of this "wealth" and allow the state to house them.

conorhal · 02-06-2021 2:32pm

Food.
Water.
Shelter.

The three basics a person needs to live, taxing such is criminal.

It benefits me naught that my home has shot up in value, this is merely a product of the government's broken housing policy and them telling me that I have to pay more because my home is worth more adds insult to injury.

machiavellianme · 02-06-2021 2:38pm

magicbastarder wrote: »

those living out in the country with houses far bigger than a similarly valued house in dublin will riot if they do that
(note: i am not actually disagreeing nor agreeing with you there)

Yet they are the very folk who benefit most through subsidised services (Esb connection, fiber connection etc costs more to rural locations than urban). Modest 3 bed, Ber G rated houses in Dublin built around a century ago with a newspaper sized garden go for 800k+ but my siblings have built A rated 4000 Square feet mansions on 2 acres for 150k (ish) by doing a lot of work themselves. It seems perverse that they pay nothing at present and even after the changes will be just 10% of the typical city property.

Donald Trump · 02-06-2021 3:01pm

machiavellianme wrote: »

Yet they are the very folk who benefit most through subsidised services (Esb connection, fiber connection etc costs more to rural locations than urban). Modest 3 bed, Ber G rated houses in Dublin built around a century ago with a newspaper sized garden go for 800k+ but my siblings have built A rated 4000 Square feet mansions on 2 acres for 150k (ish) by doing a lot of work themselves. It seems perverse that they pay nothing at present and even after the changes will be just 10% of the typical city property.

Who pays nothing at present?

Who paid your siblings' contribution to the local authority when they built their house? That is usually tens of thousands.

Also, the houseowner is responsible for paying for ESB connections etc. Or at least used to be. It was fairly common years ago that a person would get some money back when someone connected onto their "extension".

Immortal Starlight · 02-06-2021 3:05pm

I agree with Mary Lou 100% on this. It most definitely should be abolished.

Donald Trump · 02-06-2021 3:07pm

Property tax should be greatly increased. Perhaps with some tax credits available up to a limit.

It would cool down rent seekers distorting the market

(economic rent seekers)

CageWager · 02-06-2021 3:08pm

suicide_circus wrote: »

So a millionaire playboy living in rented penthouse pays no property tax but a couple on or below the average industrial wage who scrimped and saved to buy a modest semi d to raise their kids in do....

Perhaps the couple should divest themselves of this "wealth" and allow the state to house them.

Do you think the millionaire playboy became a millionaire playboy without paying significant wealth taxes? Capital gains, inheritance tax etc.

timmyntc · 02-06-2021 3:12pm

If LPT is supposed to fund services provided by the local authority, then it should be paid based on all adults in the property.
If you are renting, you still pay. Because you benefit from the services since you are the one living there.
It should be a flat rate, because everyone benefits from the same services from the LA unless I am mistaken?

Taxing based on house valuation is mad - plenty of houses bought 60 years ago are worth a mint now, but its not like the owners see any of that increase in value. Its all tied up in the house.

Beasty · 02-06-2021 3:15pm

Maybe a better title would be

"Property tax changes will see 64% not facing face higher tax"

And to be clear, that's what happens with indirect/value based taxes. They go up over time. Given the economic crisis we are possibly staring into, we need to start making changes to the tax and welfare systems. Neither of those are vote-grabbers, but alas if ignored we are simply storing up bigger issues for our children and grandchildren (and probably ourselves)

blanch152 · 02-06-2021 3:20pm

conorhal wrote: »

Food.
Water.
Shelter.

The three basics a person needs to live, taxing such is criminal.

It benefits me naught that my home has shot up in value, this is merely a product of the government's broken housing policy and them telling me that I have to pay more because my home is worth more adds insult to injury.

You must be glad you live in Ireland and fully support the current government, because everywhere else in the world has taxes on these.

magicbastarder · 02-06-2021 3:21pm

Beasty wrote: »

Maybe a better title would be

"Property tax changes will see 64% not facing face higher tax"

yeah, i just grabbed the headline from the IT article.

though i suspect nearly everyone will face higher taxes, i'd say most people have just been rolling over the same valuation from when LPT was introduced so are years out of date.

anyway, i'll stand by my point - pegging payments based on values in a clearly highly dysfunctional market seems utterly tone deaf.
it means that if some theoretical government did fix the housing market, LPT take will plummet even though the country will actually be better off.

Topgear on Dave · 02-06-2021 3:28pm

magicbastarder wrote: »

anyway, i'll stand by my point - pegging payments based on values in a clearly highly dysfunctional market seems utterly tone deaf.
it means that if some theoretical government did fix the housing market, LPT take will plummet even though the country will actually be better off.

The market is only really dysfunctional if you are trying to rent a place or are a FTB. That's why it us so difficult to fix, only a small part of the population is affected. High prices, or objecting to planning or renters moving into an area suits lots of people.

Now more people get to feel the burn.

Gregor Samsa · 02-06-2021 3:32pm

magicbastarder wrote: »

though i suspect nearly everyone will face higher taxes, i'd say most people have just been rolling over the same valuation from when LPT was introduced so are years out of date.

Well, that clearly can't happen if they estimate that 64% won't be facing higher taxes - the estimates (if they're worth anything at all) will take re-valuation of undervalued houses in to account.

My house (4 bed semi, but not in Dublin) was in the 200,001–250,000 bracket before, so €405.

It'll be in the 200,000-262,500 bracket now, so €225.

Even if I had previously undervalued my house by 50 grand, I would have been paying €315. I'd have to over-value it by 40 grand now to hit €315.

magicbastarder · 02-06-2021 3:33pm

Topgear on Dave wrote: »

Now more people get to feel the burn.

i don't think that's a solution in and of itself!

suicide_circus · 02-06-2021 3:34pm

CageWager wrote: »

Do you think the millionaire playboy became a millionaire playboy without paying significant wealth taxes? Capital gains, inheritance tax etc.

No of course not. I'm not actually opposed to property tax at all - so long as you receive services in return - but when you base that tax on something as fickle as house prices, you start to lose people. Jimmy and Fiona buy a house in 2010, it's now costs double what they paid for it, Jimmy and Fiona havent had a payrise in that time and still dont own the house outright as two thirds of the mortgage is outstanding. This "wealth" they have is entirely dependant on them selling their home and having to go and buy another one.

Mimon · 02-06-2021 3:41pm

Agree with it in principal but can anyone explain why it is paid using already taxed income?

So I am paying a tax with money that I've already payed tax on. Bonkers.

Wibbs · 02-06-2021 3:42pm

suicide_circus wrote: »

No of course not. I'm not actually opposed to property tax at all - so long as you receive services in return - but when you base that tax on something as fickle as house prices, you start to lose people. Jimmy and Fiona buy a house in 2010, it's now costs double what they paid for it, Jimmy and Fiona havent had a payrise in that time and still dont own the house outright as two thirds of the mortgage is outstanding. This "wealth" they have is entirely dependant on them selling their home and having to go and buy another one.

This. The taxpayer has no control over it. If I want to pay less income tax I can choose to earn less. If I want to pay less car tax I can choose to get a smaller engine, go hybrid/electric. Now the usual response to this is to downsize, but a home isn't a car or consumer object to nearly the same degree. Basing a tax on an extremely fickle market and external forces is wrong in my humble. And no just because other nations tax something doesn't mean we should automatically follow them. That's not an argument.

accensi0n · 02-06-2021 3:49pm

Mimon wrote: »

Agree with it in principal but can anyone explain why it is paid using already taxed income?

So I am paying a tax with money that I've already payed tax on. Bonkers.

Isn't it just standard? CPT, VAT etc. paid after you've already paid income tax.

machiavellianme · 02-06-2021 3:49pm

Donald Trump wrote: »

Who pays nothing at present?

Who paid your siblings' contribution to the local authority when they built their house? That is usually tens of thousands.

Also, the houseowner is responsible for paying for ESB connections etc. Or at least used to be. It was fairly common years ago that a person would get some money back when someone connected onto their "extension".

Paying for the various connections is based on standard charges, capped and not reflective of actual costs.
Anyone who bought a new house since 2013 pays nothing at present. I've no idea what "contribution" you speak of. Are you implying some sort of brown envelope?

conorhal · 02-06-2021 3:56pm

blanch152 wrote: »

You must be glad you live in Ireland and fully support the current government, because everywhere else in the world has taxes on these.

Yes, following lemming off a cliff is always the smart move.

Government makes homes unaffordable to ordinary people.
Taxes the bollix off the deminishing numbers that can afford a roof over their head.

"can I have some more taxes plz!, No, not for vuture funds and the corportations, just for me!" -Stupid people.

osarusan · 02-06-2021 3:59pm

Mimon wrote: »

Agree with it in principal but can anyone explain why it is paid using already taxed income?

So I am paying a tax with money that I've already payed tax on. Bonkers.

That applies to any other tax as well though doesn't it?
Any shopping you do, bills you pay, all come with tax and are paid for by income you've already been taxed on.
Or is property tax different somehow?

I agree with the general argument here that it's not fair that people are considered to have 'wealth' purely because they bought (with mortgage) a property that has increased in value since they bought it.

And even more unfair that the increase is magnified by total incompetence in the housing policy of successive governments.

CageWager · 02-06-2021 4:05pm

suicide_circus wrote: »

No of course not. I'm not actually opposed to property tax at all - so long as you receive services in return - but when you base that tax on something as fickle as house prices, you start to lose people. Jimmy and Fiona buy a house in 2010, it's now costs double what they paid for it, Jimmy and Fiona havent had a payrise in that time and still dont own the house outright as two thirds of the mortgage is outstanding. This "wealth" they have is entirely dependant on them selling their home and having to go and buy another one.

That's a fair point - we should tax equity in a home rather than total price.

This. The taxpayer has no control over it. If I want to pay less income tax I can choose to earn less. If I want to pay less car tax I can choose to get a smaller engine, go hybrid/electric. Now the usual response to this is to downsize, but a home isn't a car or consumer object to nearly the same degree. Basing a tax on an extremely fickle market and external forces is wrong in my humble. And no just because other nations tax something doesn't mean we should automatically follow them. That's not an argument.

I think the nub of the issue is that in Ireland we tend to have the worst of both worlds. I would be an advocate of high wealth taxes and low income/sales taxes. Unfortunately the government here want to slap on a wealth tax without lowering income taxes or VAT because we are massive overspenders.. but that's another issue altogether.

magicbastarder · 02-06-2021 4:09pm

I think it'd be fairer (spitballing here) to create say ten bands, and place houses into those bands based on historical value data, so you pay tax relative to average house values, not based on an illusory figure which goes up and down. E.g. 'your house is the third ten percent band so you pay €600'

NIMAN · 02-06-2021 4:22pm

From what I can see, those of us who have a house worth less than 900k are paying the same?

If you own a house worth more, stop your crying moneybags!

Property tax changes will see 36% face higher tax

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