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

The point of this thread is to tax vacant properties with a high tax to force them to be brought into use. A non PPR not rented out or a property not rented out is not earning an income so should not be liable to "income tax" it is not earning an income. The clue is in the name income tax.

An investment when it earns a gain (not income) is subject to capital gains tax again the clue is in the name capital gain. Any property not returning an income should only be taxed at the same property tax level other surrounding properties should be charged it is not consuming any more or any less than surrounding properties in terms of amenities.

What about RZLT? Sure zoned undeveloped land is not earning an income so why should it be subject to an ongoing tax?

Tax is used to incentivise and disincentivise behaviours that are good and bad for society at large. Hoarding property and not putting it to use is bad for society as a whole. No different to hoarding development land

I expect you will find these properties will no longer be vacant and will not see them either on the rental market or for sale.

Despite what people think you can't control the market, a market is a living organism. Why do you think the govt are considering tax breaks for developers? Whether people want to accept it or not we need private investment and we can't force it in we need to incentivise it otherwise the capital will go elsewhere.

I note you omitted to comment on the part of my post that referenced tax breaks although you want to use tax to achieve desired goals.

That in itself suggests you want to punish those who have achieved a second property rather than encourage/incentivise their use.

I didn't address it because it's nonsense.

If you leave a property idle you get €0. If you rent it you pay at worst 52% of income in tax so you still get 48% of rent that you would never have if you didn't let out the property.

People keeping property vacant need no more incentive to rent, they need disincentive to keep vacant. The incentive is already there and it's works for all of those who do rent out houses. The remainder need a deterrent. That's the reality of it.

Make it all tax free and the same argument will be made again but with the numbers changed.

"Why aren't they renting out at 60%? 80? 100? 150%?" The reality is we make it too easy in this country to hoard land and hoard property. In most grown up countries there are penalties for having non-PPR homes left vacant, but not here because something something communism.

I think in time we will see a much heavier property tax, more like the Council Tax in the UK. That would make it very expensive to keep a second home empty.

Dereliction tax should be even higher.

Dereliction creates an absolute eyesore, potentially unsanitary conditions for the local population, on top of removing facility of property or services.

Derelict resi and commerical property should be sold at auction or passed to the council after 3 years of entering dereliction status.

Average rents nationwide as of qtr 4 2024

Limerick City the 2nd most expensive in the country rising just shy of 20% in 2024 standing at €2271 per month

Stamp Duties Consolidation Act, 1999, Section 2, the liability for stamp duty is on the person executing the instrument.

"2. Charging of, liability for, and recovery of stamp duty. (1) Except where express provision to the contrary is made by this or any other Act, the person who executes the instrument is liable for the stamp duty chargeable on the instrument."

I suggest you look at the source for yourself: Stamp Duties Consolidation Act, 1999.

What is a non-PPR, non-holiday home, not rented out property if not an investment? Because its very clearly not being lived in and used as actual housing.

We're the only country in Europe with deemed disposal in place, so its absolutely "heavy" as far as comparative tax regimes go. If you're unable to pay the deemed disposal due after 8 years then you are absolutely forced to sell the investment to pay it.

If you're suggesting ETFs and non-PPR properties should be taxed the same, would you not then agree its only fair to apply deemed disposal to any capital gains on property once every 8 years the same as ETFs? Even if that does mean the property is forced to be sold to pay the tax due.

The difference between an occupied PPR and a non-occupied house is not down to their local services consumption, its due to one of those needing to be discouraged if not in use during the worst housing crisis in the history of the state.

We currently have 160,000 vacant homes and 15,000 homeless Irish people, including over 5,000 homeless children. Theres no world where thats remotely morally, or even logically, defensible.

And nobody here is even suggesting confiscating of the vacant homes, just a financial incentive to encourage them being rented out - at significant profit - to the owner. An enouragement of capitalism in action. Actual communism would involve the houses being seized forcefully with no compensation to the owner, rather different an outcome.

In terms of houses being let out... the marginal rate of tax, needs serious reduction…its absolutely obscene...

I can never fathom why people always want to try the stick rather than the carrot

In all fairness, current policy is a Bugs Bunny paradise and it's not working.

If the carrots are not working, it's time to bring in the stick

As for troublesome tenants, this is a no brainier to fix, private landlords don't want them and tenants don't want them as neighbours and paying the risk premium for a landlord getting landed with one

Clear enforceable rules in relation to troublesome tenants and landlords is a no brainier for a much improved rental market

For example a property may have been inherited and the owners don't want the hassle of renting out the property. A parent could have purchased a property so their son or daughter either will use it when attending college or there can be a multitude of reasons why people purchase property with no intention of it being a traditional investment property.

With ETF's you have a single tax liability every 8 yrs under the Deemed disposal rule and the liability is due on the gain in your investment value. So in essence you have one tax charge.

With property you have at least two if not three separate taxes. The first tax you have is your property tax, the second is your capital gain tax when you sell the property and the third is income tax if you rent out the property.

If you adopt the deemed disposal methodology to the property then you remove the capital gains tax liability (as that is effectively what the Deemed disposal charge is, it is a capital gain tax). So if we extend this further who determines the value of the property for "Deemed disposal value" what happens if there is a property crash, if there is a property crash who has the funds to purchase the property?

So if you want to treat all investments the same then you either change one of the above to the same as the other. It has been said that tax policy is used to achieve Govt policy then forcing people to invest and then think you can dictate the terms of the business then this wont work. Ironically enough Dr Lorcan Sirr the Economics professor was on TV yesterday and he even admitted that the RPZ are impacting on the investment of properties. He himself said we need supply to address this issue and imposing constraints on the sector is actually having the exact opposite effect they were intended to have.

I find it funny your use of the term a "financial incentive to encourage owners to rent out at significant profit to the owners" imposing a tax is not an incentive it is a disincentive. Again I ask the question if it is as you describe "significant profit" then why do we have any vacant properties as business logic would suggest this is a business "no brainer!"

Maybe the incentives are not enough? Are all the owners of the vacant properties wrong? Could all of their decisions be flawed?

A will finish on a question "who's responsibility is it to deal with the housing crisis?"

For example a property may have been inherited and the owners don't want the hassle of renting out the property. A parent could have purchased a property so their son or daughter either will use it when attending college or there can be a multitude of reasons why people purchase property with no intention of it being a traditional investment property

If you inherit a house and then have nobody living in it you absolutely should be taxed punitively on it.

Mad that people think it's okay to leave an inherited house empty because you don't want the hassle of renting it out. Sell it so somebody can make it their own home again!

I know people who bought property in Dublin so their children could live there during college, and they all rented the property before and after their children used it. The entire point of buying a property for your child at college is a financial one - so the same financially minded people would never leave a property idle when it could be earning money through rent.