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Spare a thought for the leafy suburbs...

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  • 01-04-2015 10:52am
    #1
    jon1981
    Registered Users Posts: 4,359 ✭✭✭


    http://www.irishtimes.com/news/politics/td-says-dublin-s-leafy-suburbs-will-struggle-with-property-tax-1.2161168

    Ok, I'm finding it difficult to empathise here. The property tax exemption kicked in for anyone that bought before Dec 2013, they knew (like I did) that they were exempt for a number of years, not for life. If you could afford to buy during that time in a leafy part of Foxrock or whatever I don't see the issue here?

    It's not like this article is talking to people that happened to be sitting on a house that has increased in value, these are people that are recent buyers that could afford a high priced home, so what's the problem?


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    #2
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    jon1981 wrote: »
    It's not like this article is talking to people that happened to be sitting on a house that has increased in value, these are people that are recent buyers that could afford a high priced home, so what's the problem?
    Well it's talking to both. If the value of your property has increased, you will begin paying higher property taxes from 2017.

    But that's how property taxes work. That in fact, is the entire point. I fail to see why anyone needs to be protected from it because their property has increased in value.


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    #3
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    seamus wrote: »
    Well it's talking to both. If the value of your property has increased, you will begin paying higher property taxes from 2017.

    But that's how property taxes work. That in fact, is the entire point. I fail to see why anyone needs to be protected from it because their property has increased in value.

    Ah I missed that, I thought they were referring to the freeze on paying tax for new buyers up to Dec 2013 i.e. the exemption. It's a tricky one, it's not like you can leverage the additional value in you home to cover the increase but on the flip side it's assumed these people can afford it due to where they live.


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    #4
    Tabnabs
    Moderators, Recreation & Hobbies Moderators, Sports Moderators Posts: 15,691 Mod ✭✭✭✭Tabnabs


    Like stamp duty when first introduced, it is a short term vision to increase the state coffers. But when properties increase in value (on paper) then the tax increases at a similar rate. But when is the last time the average PAYE home-owner got a pay rise?
    Ms Mitchell-O’Connor said the tax was set at €675 for a property worth between €350,000 and €400,000 but such properties in her constituency could be worth more than €500,000 by late 2016.

    “This would mean the yearly property tax would almost double to €1,035 in 2017,” she said.

    If that comes to pass, you'll see a whole new Irish Water scale of protesting. Many of these properties are owned by retired people who have limited means to afford any increase and who are the most vocal and largest voting block in the country.

    The tax bands don't make sense in the context of a boom and bust Irish property cycle, which we seem to love rapidly inflated property prices.


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    #5
    Larbre34
    Registered Users Posts: 23,796 ✭✭✭✭Larbre34


    Mary Mitchell O'Connor no doubt has all of her constituents in mind.

    My mother is on a widows pension in a home with a market value of about €600k. She paid the first two years of LPT out of savings, but even with the Council reducing the rate, the property price increase could leave her with a bill of €956,even before the review - a bill she cannot afford. I advised her to defer some or all of it, or that I would pick up half of it, but she is of that generation that would not hear of it.

    €1000 odd for an elderly woman on her own, to supplement the rest of the Country is just not acceptable. I'll be telling all candidates next year that my vote depends on them making the LPT much fairer.


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    #6
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    I agree, this has holes all over it. Retired people, jobless people...etc. They need to link this to your income earnings in someway. You cannot recognise the house value increase, which is largely the problem for people are retired with little savings or unemployed.

    The problem here is the complex tax rules that would need be put in place. I wonder how many tax decisions are based on not having the proper IT systems in place to introduce the complex rules to cover various scenarios.


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    #7
    mickman
    Closed Accounts Posts: 4,661 ✭✭✭mickman


    Larbre34 wrote: »
    Mary Mitchell O'Connor no doubt has all of her constituents in mind.

    My mother is on a widows pension in a home with a market value of about €600k. She paid the first two years of LPT out of savings, but even with the Council reducing the rate, the property price increase could leave her with a bill of €956,even before the review - a bill she cannot afford. I advised her to defer some or all of it, or that I would pick up half of it, but she is of that generation that would not hear of it.

    €1000 odd for an elderly woman on her own, to supplement the rest of the Country is just not acceptable. I'll be telling all candidates next year that my vote depends on them making the LPT much fairer.

    house is worth 600k ? Sell it and buy a small apartment


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    #8
    McGrath5
    Registered Users Posts: 2,323 ✭✭✭McGrath5


    Larbre34 wrote: »
    Mary Mitchell O'Connor no doubt has all of her constituents in mind.

    My mother is on a widows pension in a home with a market value of about €600k. She paid the first two years of LPT out of savings, but even with the Council reducing the rate, the property price increase could leave her with a bill of €956,even before the review - a bill she cannot afford. I advised her to defer some or all of it, or that I would pick up half of it, but she is of that generation that would not hear of it.

    €1000 odd for an elderly woman on her own, to supplement the rest of the Country is just not acceptable. I'll be telling all candidates next year that my vote depends on them making the LPT much fairer.

    Is there a reason why your mother will not downsize?


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    #9
    IlmoNT4
    Registered Users Posts: 332 ✭✭IlmoNT4


    The implementation of the LPT has been very short sighted. If it is allowed to continue we will as a country be faced with many examples of people who have worked their entire lives, who own their own homes but will be unable to afford to live in those homes during retirement because of LPT. Irrespective of the value of the house, or where it is located, it is right and fair that anyone who has worked and paid off a mortgage should have their home in their retirement without excessive taxation.

    The way this Government is going, they better introduce assisted suicide for anyone on the age of their retirement as very few of us will be able to afford to live considering LPT, water charges, higher penalization taxation on private pensions, DIRT on savings and of course abolition of the state pension, along with all benefits afforded to pensioners which is on its way.


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    #10
    Larbre34
    Registered Users Posts: 23,796 ✭✭✭✭Larbre34


    mickman wrote: »
    house is worth 600k ? Sell it and buy a small apartment

    Tell you what, I'll let you pop around and mention to her that purely because she is being treated so unfairly by the Government, she should give up her home of 48 years, where she lived her life with her now departed husband and raised her kids and that has the garden that keeps her so active and gives her so much pleasure.

    Less cretinous responses please.


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    #11
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    mickman wrote: »
    house is worth 600k ? Sell it and buy a small apartment



    TaxMan: I'm sorry you can't pay this tax we have just introduced
    Owner: What solution have you got?
    Taxman: Sell your home and go somewhere cheaper
    Owner: Sells home, moves
    ...
    10 years later
    ....

    Owner: Is in new home and taxes are going up
    TaxMan: I'm sorry you can't pay the increase in the tax
    Owner: What solution have you got?
    Taxman: Sell your home and go somewhere cheaper
    Owner: Sells home

    Really? Not really a solution now is it?


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    #12
    ted1
    Registered Users Posts: 23,259 ✭✭✭✭ted1


    jon1981 wrote: »
    http://www.irishtimes.com/news/politics/td-says-dublin-s-leafy-suburbs-will-struggle-with-property-tax-1.2161168

    Ok, I'm finding it difficult to empathise here. The property tax exemption kicked in for anyone that bought before Dec 2013, they knew (like I did) that they were exempt for a number of years, not for life. If you could afford to buy during that time in a leafy part of Foxrock or whatever I don't see the issue here?

    It's not like this article is talking to people that happened to be sitting on a house that has increased in value, these are people that are recent buyers that could afford a high priced home, so what's the problem?
    It's a tax in a asset with variable prices. In the Buisness work assets are taxed at the lower of purchase price or NET reliasable value. So property tax should follow these guidelines.


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    #13
    Mrs OBumble
    Registered Users Posts: 25,669 ✭✭✭✭Mrs OBumble


    jon1981 wrote: »
    I agree, this has holes all over it. Retired people, jobless people...etc. They need to link this to your income earnings in someway. You cannot recognise the house value increase, which is largely the problem for people are retired with little savings or unemployed.

    Totally disagree.

    The whole point of a wealth tax is that you are taxed on assets, not on income.

    The way to keep it fair is to keep it proportional overall: if everyone's house raises in value by 20%, then no one's bill rises (unless more tax is needed overall). But if my house-value rises by 20% and yours lowers by 10%, then my LTP increases and yours lowers, even though the overall tax-take stays the same.

    If an older person has a house that's worth 3x the average house value in the country, but no pension provision apart from state-benefits, then they have seriously stuffed up their affairs. LPT (which can be deferred) is the least of their worries - What will they to do when the roof, wiring or plumbing needs to be totally replaced? How will they afford to get it painted?


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    #14
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    Mrs OBumble wrote: »
    What will they to do when the roof, wiring or plumbing needs to be totally replaced? How will they afford to get it painted?


    This is a known quantity and something people will have provisioned for.

    Mrs OBumble wrote: »
    The whole point of a wealth tax is that you are taxed on assets, not on income. if an older person has a house that's worth 3x the average house value in the country, but no pension provision apart from state-benefits, then they have seriously stuffed up their affairs.

    That's all well and good for me and you that have the time (while still earning) to provision for this when retired...it's a bit late for people all ready retired and living of state benefits to expect them to adjust as easily, no? So the solution is hard luck? This tax is new, people need to given time to adjust.

    Question, can an elderly person sitting on a 600k home defer all property tax until their death when the house is inherited? If so, that's reasonable.


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    #15
    Michael D Not Higgins
    Moderators, Society & Culture Moderators Posts: 7,223 Mod ✭✭✭✭Michael D Not Higgins


    It's an interesting one. On the one hand, in the UK council tax is grouped into bands that don't change when the property value changes. They work out how much money the council needs for its budget and work out the maths to divide it across the bands (and adjusted for political reasons). This however isn't the case in Ireland as it's not funding the councils but the black hole in the government coffers. The other thing is there are exemptions and reductions available in the UK for low income groups, students, unoccupied houses, etc.


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    #16
    ted1
    Registered Users Posts: 23,259 ✭✭✭✭ted1


    Mrs OBumble wrote: »
    Totally disagree.

    The whole point of a wealth tax is that you are taxed on assets, not on income.

    The way to keep it fair is to keep it proportional overall: if everyone's house raises in value by 20%, then no one's bill rises (unless more tax is needed overall). But if my house-value rises by 20% and yours lowers by 10%, then my LTP increases and yours lowers, even though the overall tax-take stays the same.

    If an older person has a house that's worth 3x the average house value in the country, but no pension provision apart from state-benefits, then they have seriously stuffed up their affairs. LPT (which can be deferred) is the least of their worries - What will they to do when the roof, wiring or plumbing needs to be totally replaced? How will they afford to get it painted?

    So you think that someone who has lived there whole life in an area, who's family and support network all live locally should sell their house and move to a different county? So what if the house is 3 times the national average. It might still be the cheapest house in the local area.
    No one should be forced out of an area, based on property speculation.
    Until you sell your house it's only worth what you paid for it.


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    #17
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    Larbre34 wrote: »
    Tell you what, I'll let you pop around and mention to her that purely because she is being treated so unfairly by the Government, she should give up her home of 48 years, where she lived her life with her now departed husband and raised her kids and that has the garden that keeps her so active and gives her so much pleasure.

    Less cretinous responses please.


    Well she can't 'afford' the tax and is sitting on a huge asset. This is life. Deal with it.


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    #18
    IlmoNT4
    Registered Users Posts: 332 ✭✭IlmoNT4


    right on Larbre34...right on....

    My folks are in the same boat. I dont think its right that the Government keeps changing the goal posts on people that have already retired on state pensions...


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    #19
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    lima wrote: »
    Well she can't 'afford' the tax and is sitting on a huge asset. This is life. Deal with it.

    Would you have this opinion if you were in the same situation and suddenly a letter arrives in the door asking for money you don't have because of some half measure tax introduction?

    you'd just take it, sell up and go somewhere cheaper, yeah?


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    #20
    ted1
    Registered Users Posts: 23,259 ✭✭✭✭ted1


    lima wrote: »
    Well she can't 'afford' the tax and is sitting on a huge asset. This is life. Deal with it.
    As we have seen prices fall, so as I said earlier it's only speculation.
    Do you think that a person living in a house should be forced out because is property speculators ?
    What your saying is effectively a CPO should be applied.

    It needs to be changed to a council tax and made payable by the people residing in the house. And an equal price per person charged


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    #21
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    jon1981 wrote: »
    Would you have this opinion if you were in the same situation and suddenly a letter arrives in the door asking for money you don't have because of some half measure tax introduction?

    you'd just take it, sell up and go somewhere cheaper, yeah?

    Every citizen who has the means is responsible to pay their dues to the state, it's what happens in a modern country.


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    #22
    pwurple
    Closed Accounts Posts: 12,449 ✭✭✭✭pwurple


    Mrs OBumble wrote: »
    Totally disagree.

    The whole point of a wealth tax is that you are taxed on assets, not on income.

    The way to keep it fair is to keep it proportional overall: if everyone's house raises in value by 20%, then no one's bill rises (unless more tax is needed overall). But if my house-value rises by 20% and yours lowers by 10%, then my LTP increases and yours lowers, even though the overall tax-take stays the same.
    Agreed, it should not be income related.
    If an older person has a house that's worth 3x the average house value in the country, but no pension provision apart from state-benefits, then they have seriously stuffed up their affairs. LPT (which can be deferred) is the least of their worries - What will they to do when the roof, wiring or plumbing needs to be totally replaced? How will they afford to get it painted?

    This part makes no sense.

    Much of the value of property anywhere is based on location, usually with the properties that are close to amenities being the most expensive.
    Take this gem... 1 million euro, for a pokey terraced 3-bed.
    http://www.daft.ie/sales/2-phoenix-terrace-blackrock-dublin/1036827/


    "Downsizing" value-wise for people, would mean moving to probably a bigger house further out from the city, in an anonymous housing estate, far from their community and support networks. It would be more expensive to maintain, and have crappier transport links. How the fook does that make any sense for the elderly?


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    #23
    site designer
    Registered Users Posts: 66 ✭✭site designer


    lima wrote: »
    Well she can't 'afford' the tax and is sitting on a huge asset. This is life. Deal with it.


    The tax is theft, it is not based on income, based purely on your house worth. such rubbish. complete cash grab, she should of course fight it with the rest of the people unfairly expected to sell their hard earned assets to pay for extremely leftwing wasteful councils

    I'm she's paid way more than her fair share in tax


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    #24
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    lima wrote: »
    Every citizen who has the means is responsible to pay their dues to the state, it's what happens in a modern country.

    Not the question I asked.


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    #25
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    jon1981 wrote: »
    Not the question I asked.

    Deduce, mate.


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    #26
    Cuddlesworth
    Registered Users Posts: 13,980 ✭✭✭✭Cuddlesworth


    jon1981 wrote: »
    Would you have this opinion if you were in the same situation and suddenly a letter arrives in the door asking for money you don't have because of some half measure tax introduction?

    you'd just take it, sell up and go somewhere cheaper, yeah?

    She has a asset worth 600 thousand Euro. Your attempt to place a purely emotional emphasis on that asset does not remove the fact that it is a asset and will continue to be a asset. Your mother is not a pauper, she is worth more then most will earn in decades.

    All of the pro's far out-way the cons when taking into consideration property tax.


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    #27
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    So you'd be happy to sell up if you hadn't the means, you're in the minority.


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    #28
    jon1981
    Registered Users Posts: 4,359 ✭✭✭jon1981


    Cuddlesworth wrote: »
    She has a asset worth 600 thousand Euro. Your attempt to place a purely emotional emphasis on that asset does not remove the fact that it is a asset and will continue to be a asset. Your mother is not a pauper, she is worth more then most will earn in decades.

    All of the pro's far out-way the cons when taking into consideration property tax.

    To clarify, it's a different poster in this situation. My mothers home is worth a multiple less :D

    We talk about this asset, which is based on market valuations/speculation.. until it's converted to cold hard cash it has as much worth as the blank piece of A4 paper sitting on my desk. It's an asset, not income (referring to home occupiers only)

    I don't disagree with a taxation, but there needs to some limiting factors put in place, you cannot treat all people equally here. There is an element of begrudging coming through here from posters.


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    #29
    ted1
    Registered Users Posts: 23,259 ✭✭✭✭ted1


    lima wrote: »
    Well she can't 'afford' the tax and is sitting on a huge asset. This is life. Deal with it.

    She may also have a huge mortgage which might make the house a liability as oppose to asset.

    A high value house in no way reflects wealth.


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    #30
    seamus
    Registered Users Posts: 68,317 ✭✭✭✭seamus


    ted1 wrote: »
    She may also have a huge mortgage which might make the house a liability as oppose to asset.

    A high value house in no way reflects wealth.
    A pensioner with a huge mortgage?

    If someone has a huge mortgage and can't find the sheckles to pay their property tax, then property tax is the least of their worries.


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    #31
    Greyian
    Registered Users Posts: 956 ✭✭✭Greyian


    ted1 wrote: »
    She may also have a huge mortgage which might make the house a liability as oppose to asset.

    A high value house in no way reflects wealth.

    In which case she would qualify for a deferral, unless she has a very high income...in which case she should be able to afford the property tax.


This discussion has been closed.
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