Irish Property Market chat II - *read mod note post #1 before posting*

interesting to see the famous brennan brothers have decided that now is the right time to pull the plug and get out of the irish hotel business

RTÉ’s At Your Service experts Francis Brennan and brother John put Kenmare hotels on market for €20.5m

https://m.independent.ie/irish-news/rtes-at-your-service-experts-francis-brennan-and-brother-john-put-kenmare-hotels-on-market-for-205m/a1830068034.html

But, again, even in countries with exemptions for low earners higher property taxes have been empirically proven to result in more downsizing. So your theory is completely wrong.

Some sort of income tax link is the only way higher property taxes are going to be electorally possible in Ireland, unfortunately. No party is going to bring in a measure which hits struggling households.

Stamp duty is over 8% for non-resident buyers in the UK and it hasn't deterred foreign buyers in London. Its too easily written off as a once-off charge to properly discourage buying properties as long term investments. Over a 10-30 year period it averages to a negligible total cost to the investment. A yearly property tax does far more to discourage this because it hits every year, and rises as the value of the property does too - so it has a much bigger impact on the investment value.

The three countries in the Europe where high salaries are as readily available as Ireland are Germany, Switzerland, UK. All have materially lower effective tax rates than Ireland at that level. It’s consistently cited as a barrier to inward investment. The reason we have so many high earners coming in is corporation tax levels, any suggestion it’s due to low income taxes is clearly a lie. Not seeing where you’re getting your figures for France.

How a tax could encourage downsizing when you exempt the vast majority of people from it literally make no sense. Unless your thresholds are too high, I suspect less than 1% of older people declare taxable income in excess of €100k per year.

Id support higher property taxes fully refundable against income tax which would give you the foreign investor deterrence you crave. It would also actively promote downsizing as low income high wealth households (typically older) would be forced to take action.

Putting in an exemption for sub €100k income means it will raise basically 0 revenue so you’re just piling it on to foreign investors (fine, behaviour deterrent which is what you want) but also high income earners who already prop the country up as is.

You will find countless independent research stating Ireland has THE most progressive income tax structure in the EU.

Your desire to limit foreign investment is sensible, but how you’ve proposed it be structured is quite clearly bonkers.

and yet prices are still dropping, continued interest rate rises are gradually having an affect

Rates impact everything. Rising rates are going to cause recession, as intended, which will massively impact not only purchases, but also the amount of people being forced or choosing to sell.

Property markets have been increasingly driven by investors over the last decade. The higher rates go, the less reason there is for them to go near property. We are already beginning to see a run into more safe returns offered by higher rates. Stupidly low rates caused property price expansion across the globe, and the reverse will cause the unravelling.

Forget about the supply narrative being told across developed Countries, as thats exactly what it is.

People trying to capitalise on high house prices - once assets start falling and the peak is passed it is time to sell quick.

Remaining small landlords in particular will be selling much faster when its reported on that prices are infact falling. Most small landlords do it as a retirement income, so when the asset starts depreciating its time to liquidate

I'd check the numbers for yourself on CSO. A lot bigger drop than 0.8%. There was a 0.9% drop in last month alone in Dublin

Hadn't realized the minor decrease in prices is the steepest fall in 10 years!

You claimed, and I quote, "A person earning 300k in Ireland will more income tax than almost any non-Scandinavian country in Europe" This is demonstrably completely false - I named four non Scandinavian countries in my reply, and they're not the only ones. Even in your examples, someone in Germany earning €300k has an effective tax rate of 44%. In the UK 44%. They're not exactly low tax paradises compared to Ireland's 47% now are they? Particularly with their significantly lower average incomes on top...

You also claimed "Ireland is already bleeding high income earners for everything" - which is again statistically completely false. Trying to walk it back by now claiming our positive inward migration rate for high earners is down to X or Y doesn't change the fact your initial statement was completely false.

Higher property taxes encouraging downsizing doesn't need to make sense to you, its, again, completely statistically proven.

Ireland having the most progressive income tax structure in the EU is not remotely the same as Ireland having the highest income taxes for high earners in the EU, which is what you were initially claiming.

Why are you making up completely incorrect factual statements repeatedly? If you're going to make posts about a subject and attempt to sound authoritative the least you could do is do some basic research.

I get it, you don't want to pay property taxes, but the least you could do is actually make coherent, fact based, arguments against them instead of spouting gibberish.

Pretty much every single thing you’ve said there is completely false.

‘I named 4 countries with higher taxes’. You named 2 with higher. 1 with the same. 1 of the ones with higher taxes you seem to have quoted wrong versus anything I can see online. France appears to have marginally lower taxes on 300k income than Ireland from what I can see. So as far as I can see out of the 40 odd non-scandavian countries, you have named 1 with higher taxes than Ireland at that income level. So yes, Ireland is a high income tax country for high earners.

’Ireland is bleeding high income earners dry’. This isn’t a factual statement, it’s an assessment that I suspect 99% of people would agree with. It is also consistent with us having the most progressive tax system in the EU. I.E. we relatively bleed more from high income earners vs low income earners compared to any other EU country.

’Property taxes encourage downsizing’ - duh, but not when you literally exempt 95%+ of potential down-sizers from the tax entirely through an absurdly high exemption income level.

’you don’t want to pay property taxes’ - I said in multiple posts said I fully support higher property taxes and believe mine to be comically low. I pay more income tax in a single working day than I do in a year on my €1m+ house. I would happily see a tripling or more of property taxes and more rigorous enforcement of values. What I said was I don’t believe in your bizarre idea of property taxes that goes to 3% of value in high income households who already pay large swathes of tax, and exempt owners of €10m houses assuming their income is now below €100k. This would be an even further narrowing of Ireland tax base when we need to be widening it. Property taxes are currently one of the few taxes that could meaningfully and stably collect income from a huge tax base and you are proposing exempting 90% odd of households entirely.

The structure of your proposal is so beyond idiotic it’s hard to fathom but as with anyone driven by an extreme idealogy there’s no point arguing further. Thankfully we have smarter people in power so it’s not something we need to worry about.

This is what happens when politicians( elected leaders ) literally tell people to not leave their homes if they are evicted.

You couldnt make it up. Simon Harris, keeping the peace with logical suggestions. Should be fired.

There won’t be a recession. and if there is, the money taps will come on again…..

The new vs existing properties is continuing to look interesting. Likely that new houses that are executing now were price agreed 12 months prior and so will continue to drive upward growth in the index as the houses that were "agreed" in the past quarter get delivered at year end. https://www.cso.ie/en/releasesandpublications/ep/p-rppi/residentialpropertypriceindexmarch2023/newandexistingdwellings/

The government secret sauce of the 50k "vacant" grant and 70k "derelict" grant will also come through in the next few months. I'm far from a property "bull" but I find it difficult to envisage any significant declines between now and year end (<5% on existing property). That said, if the banks stop keeping fixed rates "low" and actually start to bleed in the interest rate rises that could change things more.

TLDR - who knows!

I struggle to believe you did any sort of research if you're still trying to maintain Ireland is a uniquely high tax country, and still making more verifiably statistically false claims. The evidence is all over the internet, but heres a very easily digestible chart to sum it up for you in one image I guess if thats whats required:

And heres an equally easy to digest map of the top marginal tax rates in Europe for you, since that was your initial talking point:

https://en.wikipedia.org/wiki/Tax_rates_in_Europe#/media/File:Top_Marginal_Tax_Rates_In_Europe.webp

You stated "Ireland is already bleeding high income earners for everything" not "’Ireland is bleeding high income earners dry" as you're now claiming. These are two completely different statements. Trying to say they're the same really shows the dishonesty of your argument when you're caught out on another factually incorrect claim.

You might claim its an extreme ideology, but I can guarantee you we'll have hugely increased property taxes, with carve outs for lower earners, in Ireland within 10 years. Its already being discussed favourably in both FF & FG internal policy discussions as being an easy, politically popular, revenue raiser. That also has hugely beneficial effects on things like reducing foreign investors squeezing Irish buyers out of the housing market.