Good news for tenants in budget 2018

KevinCavan · 08-10-2018 4:38pm #1

https://www.google.com/amp/s/amp.irishexaminer.com/breakingnews/ireland/budget-2019-landlords-set-for-tax-breaks-worth-millions-874302.html

Pelvis · 08-10-2018 4:39pm

Excellent discussion. A+

lawred2 · 08-10-2018 4:39pm

ah ffs

lawred2 · 08-10-2018 4:40pm

FG in full on giveaway mode

Gumbo · 08-10-2018 4:56pm

Already get 100% relief if you have a social tenant.

08-10-2018 4:59pm

If it brings more rentals it may do some good.

KevinCavan · 08-10-2018 5:08pm

Terrible worry that landlords will leave the market, with rents at an all time high. Thank God the landlords will have an extra few Bob now.

AlmightyCushion · 08-10-2018 5:19pm

They should use the money funding this to build more houses/apartments instead.

Tar.Aldarion · 08-10-2018 5:22pm

At this stage it should be illegal to be in government and rent out properties at the same time, haha.

Sleeper12 · 08-10-2018 5:28pm

Nothing for landlords without a mortgage by the looks of it

lawred2 · 08-10-2018 5:31pm

Sleeper12 wrote: »

Nothing for landlords without a mortgage by the looks of it

The ones enjoying the highest rents in the history of the state?

What would you like to do for them?

Sleeper12 · 08-10-2018 5:34pm

lawred2 wrote:

The ones enjoying the highest rents in the history of the state?

And the ones with mortgages have the lowest interest rates, not just in the history of the state but history.

Tar.Aldarion · 08-10-2018 5:47pm

Sleeper12 wrote: »

And the ones with mortgages have the lowest interest rates, not just in the history of the state but history.

How do you mean, Ireland's mortgage rates are high compared to the eu average.

https://www.google.ie/amp/s/www.irishtimes.com/business/economy/mortgage-rates-in-ireland-are-highest-in-europe-1.3564370?mode=amp

I guess there is nothing for them because they presumably own st least two properties and to incestivise new investment properties

Grumpypants · 08-10-2018 5:47pm

It is good news for tenants, 300 million for affordable housing, 154 euro top up to HAP tenants, and an incentive to keep the tenant in place when you sell a property.

Not much for landlords which makes the headline saying landlords set for a bonus of millions a bit confusing.

Eric Cartman · 08-10-2018 5:49pm

increase in HAP = increase in rents to get above the price so you have an easy out to not take those tenants.

great about the tax breaks for landlords, well overdue but it didn't need to be shored up on the other side with any kind of spending increase. We should be spending less and taxing less.

beauf · 08-10-2018 5:55pm

Tar.Aldarion wrote: »

...

I guess there is nothing for them because they presumably own st least two properties and to incestivise new investment properties

Who mainly invests with new properties to the rental market.
So they can set a new rent with no prior cap to anything they like.

...?

Sleeper12 · 08-10-2018 6:02pm

Tar.Aldarion wrote:

How do you mean, Ireland's mortgage rates are high compared to the eu average.

Irish interest rates are at an all time low. Other countries being lower doesn't take away from the fact ours are historically low. I paid 15 & 20 percent just over 20 years ago.

Grumpypants · 08-10-2018 6:04pm

Sleeper12 wrote: »

Irish interest rates are at an all time low. Other countries being lower doesn't take away from the fact ours are historically low. I paid 15 & 20 percent just over 20 years ago.

Trackers were 1%. That was the lowest. You would be doing well to get under 3% for a buy to let now.

Sleeper12 · 08-10-2018 6:09pm

Grumpypants wrote:

Trackers were 1%. That was the lowest. You would be doing well to get under 3% for a buy to let now.

You'd be doing well to get a tracker now. They were a bad idea from the lenders point of view.
People on non tracker in Ireland are subsidising trackers. This is why our rates are more expensive than the rest of the EU.
3 percent for a buy to let is still historically low.

GGTrek · 08-10-2018 6:27pm

For me there is very little incentive at all in this budget for landlords who want to sell. It would have been very simple by applying the same rules that revenue applies to sole traders: https://www.revenue.ie/en/starting-a-business/claiming-a-deduction-for-expenses/index.aspx
Treat landlords as a business like they do in other countries and allow proper deduction of business expenses, it is the business of managing and letting real estate which is an actively managed business (not the lie of passive income like revenue treats it in Ireland). The 4% cgt relief will be good for my tenants when I sell since the buyer of my biggest property will probably have a strong incentive to keep my good tenants and I am happy for them.

There is still a massive overhaul to the regulatory system that is necessary together with the tax treatment overhaul: top priority would be clamping down the absurd Irish RTB appeal system by putting solid fees as % of damages granted on adjudication in order to appeal like they do in other countries that allow appeals (US for example, while in the UK it is extremely difficult to appeal like in most jurisdictions in Europe). This will get rid of the vast amount of players that are abusing the system with the help of the likes of Threshold or all the other dysfunctional tenants'NGOs who have to justify their public funding, shorten timeframes and lower massively the risks of renting property in Ireland.

To be honest with these measures the govvie is just tinkering on the sidelines as usual and the chance of a serious reform as quickly outlined above are tiny because it has a real financial and (especially) political cost: dealing with the free for all brigade supported by the sold out lefty media.

handlemaster · 08-10-2018 6:49pm

KevinCavan wrote: »

Terrible worry that landlords will leave the market, with rents at an all time high. Thank God the landlords will have an extra few Bob now.

If you understood the issue you wouldnt be saying that

Grumpypants · 08-10-2018 6:51pm

Sleeper12 wrote: »

You'd be doing well to get a tracker now. They were a bad idea from the lenders point of view.
People on non tracker in Ireland are subsidising trackers. This is why our rates are more expensive than the rest of the EU.
3 percent for a buy to let is still historically low.

The historical low was the tracker. We aren't at a historical low point now.

Sleeper12 · 08-10-2018 7:06pm

Grumpypants wrote: »

The historical low was the tracker. We aren't at a historical low point now.

Thats not true at all. Trackers were a mistake. There are no trackers on offer anymore. It's not that they have increased. They have been removed from the market. We have historically low interest rates now. People paying old trackers still have the loss making historically low rates. They haven't increased. Non tracker mortgages are subsidizing them

Very few if any landlords bought a buy to let with a mortgage since 2008. Any that did were pretty foolish imo.

Here is a list of the historic mortgage rates in Ireland going back over the past 30 years. They make interesting- if scary reading. What would happen if interest rates ever got as high as 16.25% again – (that’s what they were sometime in 1982).
Irish Mortgage Interest Rates since 1975
The highest rate reached in each year is shown below – based on the average rates of “representative building societies” from the Central Bank via the CSO
1975 11.25%
1976 12.5%
1977 13.95%
1978 14.15%
1979 14.15%
1980 14.15%
1981 16.25%
1982 16.25%
1983 13.0%
1984 11.75%
1985 13%
1986 12.5%
1987 12.5%
1988 9.25%
1989 11.4%
1990 12.37%
1991 11.95%
1992 13.99%
1993 13.99%
1994 7.49%
1995 7.00%
1996 6.75%
1997 6.90%
1998 5.85%
1999 5.60%
2000 6.09%
2001 6.09%
2002 4.70%
2003 4.20%
2004 3.49%
2005 3.65%
2006 4.86%
2007 5.46%
2008 5.86%
2009 4.16%
2010 4.02%
2011 4.42%
2012 4.33%
2013 4.38%
2014 4.2%
2015 4.14%
2016 3.63%
2017 3.41%
ref : www.cso.ie/

http://www.moneyguideireland.com/history-of-mortgage-rates-in-ireland.html

Sleeper12 · 08-10-2018 7:17pm

Grumpypants wrote:

The historical low was the tracker. We aren't at a historical low point now.

Average rates for the first 6 months of 2018 is 3.21 percent. That's down again on last year's 3.41 percent historically low

Grumpypants · 08-10-2018 7:52pm

Sleeper12 wrote: »

Average rates for the first 6 months of 2018 is 3.21 percent. That's down again on last year's 3.41 percent historically low

3% is higher than 1%. It's not really something that is up for debate.

Pkiernan · 08-10-2018 7:57pm

lawred2 wrote: »

The ones enjoying the highest rents in the history of the state?

What would you like to do for them?

Itd be nice to get a fraction of the protection that rogue tenants enjoy.

Sleeper12 · 08-10-2018 8:04pm

Grumpypants wrote:

3% is higher than 1%. It's not really something that is up for debate.

Variable rates have never been 1 percent & you know it.
Please provide a link where the cso shows 1 percent. Or is it just in your imagination?

ted1 · 08-10-2018 8:15pm

lawred2 wrote: »

The ones enjoying the highest rents in the history of the state?

What would you like to do for them?

They are paying the highest tax too.

lawred2 · 08-10-2018 8:17pm

ted1 wrote: »

They are paying the highest tax too.

You mean income tax like every other citizen in receipt of income pays?

What would you like to do?

Make a special subclass of income tax?

Samuel T. Cogley · 08-10-2018 8:21pm

KevinCavan wrote: »

Terrible worry that landlords will leave the market, with rents at an all time high. Thank God the landlords will have an extra few Bob now.

You could double the rent I'm making and it still wouldn't offset the huge risk. It's not money that needs to be thrown at the problem it's proper legilsation dealing with the issues causing LL's to exit the market.

This is an attempt to bring in 'new blood' into the market. Good on the government, hopefully it'll offset and stagnation in apartment prices once AirBnB get's clamped down on. Another year's growth and I can get out if I don't let it to the council.

Samuel T. Cogley · 08-10-2018 8:23pm

lawred2 wrote: »

The ones enjoying the highest rents in the history of the state?

What would you like to do for them?

Sort out the ridiculously pro-tenant legislative mess we're in.

lawred2 · 08-10-2018 8:24pm

Samuel T. Cogley wrote: »

Sort out the ridiculously pro-tenant legislative mess we're in.

What keeps you in the business?

Samuel T. Cogley · 08-10-2018 8:26pm

lawred2 wrote: »

Make a special subclass of income tax?

If that what it takes to keep people in the market, that's what they'll have to do. As I've said before you can produce more middle class earners with very little problem. They're not expected to take the risk of working for two years unpaid, they're also easily replaced. We've seen now that landlords aren't an endless resource.

quadrifoglio verde · 08-10-2018 8:26pm

lawred2 wrote: »

What keeps you in the business?

Negative equity by the sound of things

Samuel T. Cogley · 08-10-2018 8:27pm

lawred2 wrote: »

What keeps you in the business?

Equity or lack there of at the moment. However if the legislation were to change I'd keep it on as an investment even if rents were to reduce by 50% (a sensible level). Instead, I'll sell when the time is right, pay down the mortgage and start properly paying into a pension.

KevinCavan · 08-10-2018 8:30pm

handlemaster wrote: »

If you understood the issue you wouldnt be saying that

If I owned five houses and was getting two grand a month for each of them is it?

Grumpypants · 08-10-2018 8:30pm

Sleeper12 wrote: »

Variable rates have never been 1 percent & you know it.
Please provide a link where the cso shows 1 percent. Or is it just in your imagination?

Where have i said anything about variable rates? I said trackers were the lowest point if you look at mortgage interest rates on a historical scale.

That's the cheapest it's ever been. Mortgage products are more expensive now.

Samuel T. Cogley · 08-10-2018 8:31pm

KevinCavan wrote: »

If I owned five houses and was getting two grand a month for each of them is it?

The vast majority of LL's own two or less properties, mortgaged. The profit is tied up in equity. The risks invoved is that if the tenants stops paying it can bust the LL from a cash-flow point of view.

KevinCavan · 08-10-2018 8:36pm

Pkiernan wrote: »

Itd be nice to get a fraction of the protection that rogue tenants enjoy.

Hard to see too many rogue tenants now with letting agencies looking for work references, previous landlords references and asking what a couple’s combined monthly salary is. Also factor in that you could have seven or eight couples/ sets of tenants to chose from on any open visit to a rental property.

Sleeper12 · 08-10-2018 8:39pm

Grumpypants wrote:

Where have i said anything about variable rates? I said trackers were the lowest point if you look at mortgage interest rates on a historical scale.

No country in the world uses tracker rates to measure what the average interest rate is. No country in the world uses special packages or deals to work out average interest rates.

Grumpypants wrote:

That's the cheapest it's ever been. Mortgage products are more expensive now.

Trackers are still the same rate. They haven't increased. This is why the banks are losing money on trackers. They can't put them up. Some trackers are actually only a half percent. Historically low as I have said several times now.

Samuel T. Cogley · 08-10-2018 8:41pm

KevinCavan wrote: »

Hard to see too many rogue tenants now with letting agencies looking for work references, previous landlords references and asking what a couple’s combined monthly salary is. Also factor in that you could have seven or eight couples/ sets of tenants to chose from on any open visit to a rental property.

Work referecnce/salary cert - no issues why would an employer not give one
LL reference - not worth the paper it's written on
Bank statements - worth it as you can cross reference rent actually being paid.
Gut instinct - worth it weight in gold.

Even after all that it's perfectrly possible for tenants to just decide they're not paying.

Sleeper12 · 08-10-2018 8:45pm

Samuel T. Cogley wrote:

Work referecnce/salary cert - no issues why would an employer not give one LL reference - not worth the paper it's written on Bank statements - worth it as you can cross reference rent actually being paid. Gut instinct - worth it weight in gold.

Samuel T. Cogley wrote:

Even after all that it's perfectrly possible for tenants to just decide they're not paying.

Totally agree.

Landlords should be getting at least two months deposit now and for any landlords not charging market rates at least three months deposit. It's still not bullet proof but at least you are better protected

Grumpypants · 08-10-2018 8:45pm

Sleeper12 wrote: »

No country in the world uses tracker rates to measure what the average interest rate is. No country in the world uses special packages or deals to work out average interest rates.

Trackers are still the same rate. They haven't increased. This is why the banks are losing money on trackers. They can't put them up. Some trackers are actually only a half percent. Historically low as I have said several times now.

You can't get a mortgage today that is cheaper than when trackers were on offer. Therefore today is not the historically lowest point. The trackers were. So you were wrong just move on.

Fol20 · 08-10-2018 8:48pm

Topgear on Dave wrote: »

If it brings more rentals it may do some good.

It won’t. The 100pc interest was already being phased in anyway. They have just pushed it forward 2 years. The rest of the deals are meh and won’t increase the rental stock. Anyone that was considering getting out of the market will still move out of it. What they are offering is terrible and it was easy to offer the 100pc. It’s false title as well.

They should have allowed LPT as an expendable item. They already said in principle it should be but still don’t allow it after several years

Fol20 · 08-10-2018 8:49pm

lawred2 wrote: »

FG in full on giveaway mode

How is this a give away budget. Ll have got nothing in over 5 years and the title is false as well

Fol20 · 08-10-2018 8:50pm

AlmightyCushion wrote: »

They should use the money funding this to build more houses/apartments instead.

So what. Build more social housing yet at the same time ll are getting out of the market. They may balance themselves out or more than likely have a deficit with rental supply

Fol20 · 08-10-2018 8:51pm

KevinCavan wrote: »

Terrible worry that landlords will leave the market, with rents at an all time high. Thank God the landlords will have an extra few Bob now.

If the market is so fruitful, why do you think ll are leaving the market?

beauf · 08-10-2018 8:53pm

Should be no problem with supply then.

People will pile into such an attractive no lose scenario.

Fol20 · 08-10-2018 8:53pm

lawred2 wrote: »

The ones enjoying the highest rents in the history of the state?

What would you like to do for them?

How about allow LPT as an expense.
How about flat rate fees for phone bills and petrol?

Sleeper12 · 08-10-2018 8:59pm

Grumpypants wrote:

You can't get a mortgage today that is cheaper than when trackers were on offer. Therefore today is not the historically lowest point. The trackers were. So you were wrong just move on.

You really don't understand interest rates at all do you?

Tracker mortgages weren't interest rates. They were a product. A very bad one as it turns out so the product has been withdrawn from the market. The trackers still in existence are still the same rate. They haven't been increased. Its not that the tracker rate increased. Its that the product has been withdrawn. The trackers still running are costing non tracker mortgages at least an extra one percent. The reason Irish interest rates are higher than the rest of the EU, though still historically low, is because everyone on a variable rate is subsidising trackers.

Just because you feel interest rates aren't historically low doesn't make it so. Fortunately we rely on the CSO for our statistics and not Joe Soap Grumpypants.

dubrov · 08-10-2018 9:10pm

Sleeper12 wrote:

The trackers still running are costing non tracker mortgages at least an extra one percent.

Have you got a source for that. Last time I checked a couple of years ago, BoI had a cost of funding less than their outstanding trackers. I'd say it's even lower now.

Good news for tenants in budget 2018

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