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Is nobody concerned at all about the amount that the government gets from their rent?

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  • Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    I'm off to find a spell checker.


  • Registered Users Posts: 8,184 ✭✭✭riclad


    My friend is a landlord, she pays maybe 5 per cent tax , she claims for 75 per cent interest on her morgage, service charge,s 1000, expense,s
    etc her loan is 160k, she rents in a rural area.
    She makes only a small profit after paying all expenses,s on the apartment.
    Another person i know has the money to buy a house,
    his accountant said you,ll have to get a mortgage ,otherwise you,ll
    pay high tax and make a tiny profit on it.
    He wanted to buy a house for 140k and rent it out.
    At the age of 60 he probably would not get a 25 year loan from a bank.


  • Registered Users Posts: 337 ✭✭Senature


    If you look at how the calcualtion is done you'll get it. It's not done the way you're suggesting.

    I did the two side by side in aonther thread the net result is within a few % of each other but they're not identical, furthermore one is the right way to do the claculation and the other, taxing the profit, is not. You start off by taking the tax against the gross and working from there, not deducting the expenses from the gross.
    From revenue.ie

    How do you calculate your taxable income?

    You must work out how much tax you owe on your 'net rental income'.

    You need to deduct allowable expenses and any allowances from your rental source or sources. This will calculate if you have profit or a loss.

    The net rental income is the total profits less the total losses.


  • Closed Accounts Posts: 7,070 ✭✭✭Franz Von Peppercorn


    The tax is on INCOME, you then DEDUCT the expenses to allow for RELIEF. It's an INCOME tax the clue is in the name.

    It’s a tax on profits after expenses. The clue is not in the name, which is misleading because a fair chunk of income tax in the PAYE sector is taxed at 100% of income. Business revenue isn’t.

    If you see your rent take as business revenue do you think that you pay 50% on the revenue? No. Of course not.


  • Registered Users Posts: 4,993 ✭✭✭c.p.w.g.w


    Well if the government introduced a scheme were landlord didn't need to pay tax on the first 8 grand per property I'd reckon your'd see rents around the country drop.


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  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    Senature wrote: »
    From revenue.ie

    How do you calculate your taxable income?

    You must work out how much tax you owe on your 'net rental income'.

    You need to deduct allowable expenses and any allowances from your rental source or sources. This will calculate if you have profit or a loss.

    The net rental income is the total profits less the total losses.




    This is very basic stuff. So many small landlords here don't understand it. They are getting muddled in their thinking & as a result they seem to feel that the whole tax system is stacked against them.


    If it were a partnership owning the property you'd do profit & loss accounts. The end result will be the same doing profit & loss or calculating it on your personal tax return.


    I think by declaring your profit & loss on your tax return the way revenue want you to could leave a landlord feeling like expenses are coming out of their own pocket.


    I honestly believe many landlords here would benefit with a visit to a business manager, accountant etc to explain it properly. Just for their mental well being if nothing else. I have been involved in many different business over the decades, including commercial & residential property. I have never seen any other business where the business people complain so much & I genuinely believe it's because they don't understand their business model or their investment.You need to be able to see the big picture. Borrowing to buy a property is a long term investment. You should not expect to see big returns till you own the property outright or at least till near the end of the mortgage.



    We throw money into our pension week after week without expecting a weekly return till it matures. Why should an investment property be any different? If an investment property pays for itself over a 20 or 30 year mortgage then you have gotten an investment worth maybe half a million without putting a penny into it. Please someone tell me another investment that costs you nothing for 20 or 30 years yet is worth half a million at the end.



    You should only look for short term gains on property if you are paying cash mortgage free. Even then thinking short term is risky. Prices might be stagnant or drop short term & this makes it risky


  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    c.p.w.g.w wrote: »
    Well if the government introduced a scheme were landlord didn't need to pay tax on the first 8 grand per property I'd reckon your'd see rents around the country drop.




    I doubt it. Judging by posters on this thread & other threads they would feel keeping the rent higher to claw back for how hard done by they are. They'd be thinking about the time someone did 5K worth of damage to their property, or 10K or even 45K. I can't imagine too many small landlords thinking it sensible to reduce the rent. professional landlords defiantly wouldn't drop their rents. Landlords with only one property are only a tiny part of the market


  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    You spent that expense, that money is gone. The way you make it sound is landlords are writing off their tax bill and profiting. Spending 2k to reduce your tax bill by 400 is still a loss of 1600.


    The mind boggles.


    When you invest in your property you either increase it's value or protect it's value by spending this money on the property.



    If you buy a brand new house fully fitted & didn't spend a penny on it over 30 years what sort of property would you have? Would it have burnt down die to bad electrics etc?



    Spending money on the upkeep of the building is investing in your property.



    This is the same in any business. You need to put money in regularly to keep it up to date. This money doesn't come out of your pocket. It comes out of the income/rent & is tax deductible.



    I have a shower repair business. My expenses are tax deductible. I offset Insurance, accountant. Van upkeep, website costs etc against tax. That doesn't make me sound like
    are writing off their tax bill and profiting.
    . It makes me sound like I am running a legitimate business claiming legitimate business expenses.



    It's the same for you as a landlord. Like it or not you are running a business & offsetting legitimate expenses. There is nothing wrong with that & you shouldn't feel guilty about doing so


  • Registered Users Posts: 3,929 ✭✭✭Monokne


    noodler wrote: »
    Don't believe this for a second.

    No offence.

    Landlords would have zero incentive to reduce the rent in the current Market under that scenario.

    How wonderfully arrogant of you.

    I currently rent my property to a couple for €100 less than they were willing to pay, because I liked the people which is more important to me than profiting given I own a business I never wanted and can't rid myself of, and I believed allowing them a few bob off the rent (they're both in reasonably low income jobs) would engender good will in the relationship and make it a lot easier to deal with issues when they arose. Whether that's the reason or not, we've gotten along well and they're heading into their third year shortly. From my vantage point, dealing with reasonable folk and having secured income rather than potentially dealing with fussy people and having to worry about preparing the place for rent is great.

    Perhaps think before you categorise everyone in a given group as the same next time?


  • Moderators, Society & Culture Moderators Posts: 17,642 Mod ✭✭✭✭Graham


    Sleeper12 wrote: »
    Landlords with only one property are only a tiny part of the market

    Somewhere around two thirds of all landlords own a single property.


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  • Registered Users Posts: 1,238 ✭✭✭The Student


    Sleeper12 wrote: »
    This is very basic stuff. So many small landlords here don't understand it. They are getting muddled in their thinking & as a result they seem to feel that the whole tax system is stacked against them.


    If it were a partnership owning the property you'd do profit & loss accounts. The end result will be the same doing profit & loss or calculating it on your personal tax return.


    I think by declaring your profit & loss on your tax return the way revenue want you to could leave a landlord feeling like expenses are coming out of their own pocket.


    I honestly believe many landlords here would benefit with a visit to a business manager, accountant etc to explain it properly. Just for their mental well being if nothing else. I have been involved in many different business over the decades, including commercial & residential property. I have never seen any other business where the business people complain so much & I genuinely believe it's because they don't understand their business model or their investment.You need to be able to see the big picture. Borrowing to buy a property is a long term investment. You should not expect to see big returns till you own the property outright or at least till near the end of the mortgage.



    We throw money into our pension week after week without expecting a weekly return till it matures. Why should an investment property be any different? If an investment property pays for itself over a 20 or 30 year mortgage then you have gotten an investment worth maybe half a million without putting a penny into it. Please someone tell me another investment that costs you nothing for 20 or 30 years yet is worth half a million at the end.



    You should only look for short term gains on property if you are paying cash mortgage free. Even then thinking short term is risky. Prices might be stagnant or drop short term & this makes it risky

    Can you name a business that must continue providing a service knowing full well they will not be paid for it even if they go to the rtb and get a judgement?


  • Registered Users Posts: 5,875 ✭✭✭Edgware


    Once you have a good tenant that you know is long term its easy make little arrangements that benefit both parties.


  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    Graham wrote:
    Somewhere around two thirds of all landlords own a single property.

    You misunderstood my point the amount of property owned by single owners is tiny compared to the overall amount of rental property


  • Closed Accounts Posts: 7,070 ✭✭✭Franz Von Peppercorn


    Monokne wrote: »
    How wonderfully arrogant of you.

    I currently rent my property to a couple for €100 less than they were willing to pay, because I liked the people which is more important to me than profiting given I own a business I never wanted and can't rid myself of, and I believed allowing them a few bob off the rent (they're both in reasonably low income jobs) would engender good will in the relationship and make it a lot easier to deal with issues when they arose. Whether that's the reason or not, we've gotten along well and they're heading into their third year shortly. From my vantage point, dealing with reasonable folk and having secured income rather than potentially dealing with fussy people and having to worry about preparing the place for rent is great.

    Perhaps think before you categorise everyone in a given group as the same next time?

    That’s just sound business sense. A discount for loyalty and good practice.

    However rental prices are going up because most landlords are pushing them up, which they can do because supply is limited.


  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    Can you name a business that must continue providing a service knowing full well they will not be paid for it even if they go to the rtb and get a judgement?


    This in the business world is known as slippage. It is part & parcel of every business. I don't believe for a second that any landlord entered into the rental business without researching it. Things happen. Rentals get damaged & people overhold. It's part of the rental business.

    Plumber on a plumbing group I'm part of replaced a boiler & made upgrades to the tune of close to 4000 euros. Job finished and owner won't pay. Not because they aren't happy but because they want it for free. Now in reality the plumber should have gotten half upfront so it's at least partly his own fault but he is out of pocket almost 4000 euros.

    I fit a shower a few months ago in rented accommodation. Landlord thought that she wanted it for free. Wouldn't answer my calls, texts or emails. Luckily for me the tenants let me in a few weeks later and I retrieved the shower itself but overall I'm out of pocket 450 euros.

    Every business has slippage. Shoplifting in shops, warehouse staff stealing, staff giving out too much change by mistake, fare doing a runner on the taxi driver. Every single business has slippage. Why some landlords think its only them is beyond me.

    You do not have to charge the highest rent in the area but at the same time charging way below market rates reduces the amount of money you have in reserve for slippage.


  • Registered Users Posts: 1,556 ✭✭✭UpTheSlashers


    IT just struck me about all the anti landlord stuff going around.
    Nobody is at all p1ssed at the government for the sheer amount they take from the rent you pay to your landlord.
    Over 50%.
    Imagine if the government were to forego that tax in return for the landlord reducing the rent.

    But think about it folks. Over 50% of what you are paying is going to the government, so they are actually more to blame for your high rent thatn your landlord is.

    If they really want to reduce rents, they should think about using a carrot approach and fessing up to how much they are contributing to high rent.

    Stick approaches have failed miserably and always will.

    If your landlord wants to get €50 more from your rent he has to charge you €100.

    Now imagine this. You are paying €14000 rent now. The government forego enough tax to make it cost neutral to your landlord to reduce your rent to €12000.

    The landlord still makes the same after tax profit. You are €2000 better off.
    The government is €2000 better off for rent allowance tenants and the worse off for working tenants.
    The stick just isn't working. All it is doing is convincing landlords to quit. And convincing potential new entrants to stay away.

    There would be many ways of achieving this, but buy in from Leo is required. He holds all the power to reduce rents, but he wont budge. Too easy to rake it in and make people who cant work it out for themselves think that the landlords are the bad guys here.

    So how many properties are you renting out? Just trying to get an idea of how much tax you feel you should be entitled to dodge.


  • Registered Users Posts: 1,238 ✭✭✭The Student


    Sleeper12 wrote: »
    This in the business world is known as slippage. It is part & parcel of every business. I don't believe for a second that any landlord entered into the rental business without researching it. Things happen. Rentals get damaged & people overhold. It's part of the rental business.

    Plumber on a plumbing group I'm part of replaced a boiler & made upgrades to the tune of close to 4000 euros. Job finished and owner won't pay. Not because they aren't happy but because they want it for free. Now in reality the plumber should have gotten half upfront so it's at least partly his own fault but he is out of pocket almost 4000 euros.

    I fit a shower a few months ago in rented accommodation. Landlord thought that she wanted it for free. Wouldn't answer my calls, texts or emails. Luckily for me the tenants let me in a few weeks later and I retrieved the shower itself but overall I'm out of pocket 450 euros.

    Every business has slippage. Shoplifting in shops, warehouse staff stealing, staff giving out too much change by mistake, fare doing a runner on the taxi driver. Every single business has slippage. Why some landlords think its only them is beyond me.

    You do not have to charge the highest rent in the area but at the same time charging way below market rates reduces the amount of money you have in reserve for slippage.

    Yes but in other business you can minimize your losses like your example being a landlord you cant.


  • Registered Users Posts: 3,841 ✭✭✭Jet Black


    Sleeper12 wrote: »
    Plumber on a plumbing group I'm part of replaced a boiler & made upgrades to the tune of close to 4000 euros. Job finished and owner won't pay. Not because they aren't happy but because they want it for free. Now in reality the plumber should have gotten half upfront so it's at least partly his own fault but he is out of pocket almost 4000 euros.

    Calling bs on this, never seen a tradesman do this in my life. He must be loaded paying for everything out of his own pocket then waiting until the end to collect.


  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    Jet Black wrote:
    Calling bs on this, never seen a tradesman do this in my life. He must be loaded paying for everything out of his own pocket then waiting until the end to collect.

    Well you'd be wrong. Genuine case & it happens to a smaller scale all the time.

    Plumber had his van broken into last January as he worked in a hotel. 60,000 euro worth of equipment stolen from the van. You can't get insurance for equipment in a tradesmans van. He has to suck up a 60k loss. It happens in every business. It's horrible when it happens but it's part of running a business


  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    Jet Black wrote: »
    Calling bs on this, never seen a tradesman do this in my life. He must be loaded paying for everything out of his own pocket then waiting until the end to collect.


    Sorry my mistake 3K


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  • Registered Users Posts: 10,684 ✭✭✭✭Samuel T. Cogley


    I think if the amount a LL was only going to get stung for was 3K there'd be very little complaint.


  • Registered Users Posts: 7,719 ✭✭✭Grumpypants


    A more apt comparison would be a restaurant that serves a customer who eats his dinner and refuses to pay.

    Then the restaurant is forced to give him a dinner every night for 18 months for free, while he smashes the place up, and if they kick him out he can sue them for thousands.

    Regular experience for landlords.


  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    I think if the amount a LL was only going to get stung for was 3K there'd be very little complaint.


    The return on the rental is greater than anything a plumber could hope for.

    It's all relevant really

    I'll leave it there. Op thought that more than half of his rent was going in tax. He now knows that's not true as landlords only pay tax on the profits & not on the whole of the rent.


  • Registered Users Posts: 3,623 ✭✭✭Fol20


    Sleeper12 wrote: »
    This in the business world is known as slippage. It is part & parcel of every business. I don't believe for a second that any landlord entered into the rental business without researching it. Things happen. Rentals get damaged & people overhold. It's part of the rental business.

    Plumber on a plumbing group I'm part of replaced a boiler & made upgrades to the tune of close to 4000 euros. Job finished and owner won't pay. Not because they aren't happy but because they want it for free. Now in reality the plumber should have gotten half upfront so it's at least partly his own fault but he is out of pocket almost 4000 euros.

    I fit a shower a few months ago in rented accommodation. Landlord thought that she wanted it for free. Wouldn't answer my calls, texts or emails. Luckily for me the tenants let me in a few weeks later and I retrieved the shower itself but overall I'm out of pocket 450 euros.

    Every business has slippage. Shoplifting in shops, warehouse staff stealing, staff giving out too much change by mistake, fare doing a runner on the taxi driver. Every single business has slippage. Why some landlords think its only them is beyond me.

    You do not have to charge the highest rent in the area but at the same time charging way below market rates reduces the amount of money you have in reserve for slippage.

    Normally on invoices, trademan would have a mark saying something along the lines of the materials are owned by them until the bill is paid. Your plumber friend, is he trying to take them back out of the property or will he bring the ll to small claims court. I’m just interested to see what they normally do in that as I absolutely hate when anyone doesn’t abide by whatever they agree to


  • Registered Users Posts: 3,623 ✭✭✭Fol20


    Jet Black wrote: »
    Calling bs on this, never seen a tradesman do this in my life. He must be loaded paying for everything out of his own pocket then waiting until the end to collect.

    This can and does happen. This is what I do with all of my tradesman even if larger bills however I have built up a relationship over the years and they are ok with it. Normally if it’s a new relationship for those types of amounts they would expect a decent amount up front to mitigate risk. Normally half of their bills are for labour as well so they don’t need to float the entire bill


  • Registered Users Posts: 1,061 ✭✭✭DubCount


    Sleeper12 wrote: »
    This in the business world is known as slippage. It is part & parcel of every business. I don't believe for a second that any landlord entered into the rental business without researching it. Things happen. Rentals get damaged & people overhold. It's part of the rental business.

    Plumber on a plumbing group I'm part of replaced a boiler & made upgrades to the tune of close to 4000 euros. Job finished and owner won't pay. Not because they aren't happy but because they want it for free. Now in reality the plumber should have gotten half upfront so it's at least partly his own fault but he is out of pocket almost 4000 euros.

    I fit a shower a few months ago in rented accommodation. Landlord thought that she wanted it for free. Wouldn't answer my calls, texts or emails. Luckily for me the tenants let me in a few weeks later and I retrieved the shower itself but overall I'm out of pocket 450 euros.

    Every business has slippage. Shoplifting in shops, warehouse staff stealing, staff giving out too much change by mistake, fare doing a runner on the taxi driver. Every single business has slippage. Why some landlords think its only them is beyond me.

    You do not have to charge the highest rent in the area but at the same time charging way below market rates reduces the amount of money you have in reserve for slippage.

    I assume the plumber will not be going back to do more plumbing work for the same client after getting stung the first time. Bad debts are part of every business, but no business continues providing goods or a service when they know they cant get paid.

    The plumber can also go directly to court to seek to get payment, and does not have to waste time and money in a talking shop like the RTB.

    Finally, the non-paying client of the plumber does not have the opportunity to do significant damage to the plumbers assets after they receive the free service.


  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    Fol20 wrote:
    Normally on invoices, trademan would have a mark saying something along the lines of the materials are owned by them until the bill is paid. Your plumber friend, is he trying to take them back out of the property or will he bring the ll to small claims court. I’m just interested to see what they normally do in that as I absolutely hate when anyone doesn’t abide by whatever they agree to


    He's not a friend. Just a plumber in a plumbing Facebook group. I've never met him. That post was from December 2017. He's no closer to getting paid now than then so I've been told.

    Here's the thing. Small claims court is for the customer to bring the tradesman. Sadly it doesn't work the other way around. The tradesman can't bring the client to the Small claims court for non payment. Tradesmen can't use the small claims court. It's too expensive for the tradesman to bring a civil case against the client. As a landlord I know that you understand the frustration of a situation like this.

    He's not the only plumber owed money on the group. The small guys try to get half up front before starting a job to limit how much they can be ripped off for. The more professional companies can't be seen to ask for money up front and just take a chance. This is one of the reasons why the bigger companies charge more. Bigger risk.


  • Registered Users Posts: 16,815 ✭✭✭✭Sleeper12


    DubCount wrote:
    I assume the plumber will not be going back to do more plumbing work for the same client after getting stung the first time. Bad debts are part of every business, but no business continues providing goods or a service when they know they cant get paid.

    Totally agree
    DubCount wrote:
    The plumber can also go directly to court to seek to get payment, and does not have to waste time and money in a talking shop like the RTB.

    I understand that
    DubCount wrote:
    Finally, the non-paying client of the plumber does not have the opportunity to do significant damage to the plumbers assets after they receive the free service.


    That is true

    All of these risks are known to the landlord before he/she buys the property. It is terrible that these things can happen my point is that it is part of the business and part of the risk.

    The industry needs major changes. Unfortunately we won't get any favourable changes with the housing shortage & homeless crisis. The government can't be see to make it easier to make someone homeless.

    When we do sort out the homeless and housing crisis we can campaign for changes. A big thing would be a database to check landlords and tenants past history. To hell with GDPR, this needs to happen. With no homeless problem or housing shortage it would be reasonable to introduce laws to make it easier & quicker to evict problem tenants. Higher standards in the quality of the rental needs to be brought in too. I rent out retail units. 35 year lease. It's industry standard to put in the lease that the unit has to be painted at least every 5 years. If I can insist on this as a minimum standard for a commercial unit then we should have similar standard in residential units. You wouldn't believe how bad some rentals are. You wouldn't put your dog in them let alone a human.

    There will be no changes to benefit the landlord with the housing shortage plane & simple. We have to wait for the government to get its act together and sort out the housing.


  • Registered Users Posts: 3,623 ✭✭✭Fol20


    Sleeper12 wrote: »
    Totally agree



    I understand that




    That is true

    All of these risks are known to the landlord before he/she buys the property. It is terrible that these things can happen my point is that it is part of the business and part of the risk.

    The industry needs major changes. Unfortunately we won't get any favourable changes with the housing shortage & homeless crisis. The government can't be see to make it easier to make someone homeless.

    When we do sort out the homeless and housing crisis we can campaign for changes. A big thing would be a database to check landlords and tenants past history. To hell with GDPR, this needs to happen. With no homeless problem or housing shortage it would be reasonable to introduce laws to make it easier & quicker to evict problem tenants. Higher standards in the quality of the rental needs to be brought in too. I rent out retail units. 35 year lease. It's industry standard to put in the lease that the unit has to be painted at least every 5 years. If I can insist on this as a minimum standard for a commercial unit then we should have similar standard in residential units. You wouldn't believe how bad some rentals are. You wouldn't put your dog in them let alone a human.

    There will be no changes to benefit the landlord with the housing shortage plane & simple. We have to wait for the government to get its act together and sort out the housing.

    The more negative impacts that are enforced on ll, the more ll will get out the market. So even small stuff like painting a house shouldn’t be forced on a ll. If the tenant doesn’t like the condition of the place, they can move somewhere else or if we go the European model, they can paint the room black for all I care as long as it’s back to it’s original condition once they leave or I have a real way of getting the money off them if it is not the same. If you are a landlord why do you accept they won’t do anything for us yet you want to endure more “pain”/ hassle in further anti ll legislation? The paint on a wall is literally like a first world problem and would be at the bottom of a minimum standard. It’s aestetics that serve no function but to look nice and clean. If you wanted to, you could have an unpainted grey wall which would be equally as good


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  • Registered Users Posts: 6,001 ✭✭✭handlemaster


    Victor wrote: »
    Nobody is at all p1ssed at the government for the sheer amount they take from the rent you pay to your landlord.
    Over 50%.
    If the government is getting that much, you must be earning an awful lot. Even if you took no capital allowances, and no pension or health insurance credits, you would have to be earning at least a million a year to pay 50% tax. May I interest you in the tiniest of violins?

    http://services.deloitte.ie/tc/Results.aspxGross Nett Tax Effective tax rate
    €10,000 €10,000 €- 0%
    €30,000 €25,388 €4,612 15%
    €100,000 €61,199 €38,801 39%
    €300,000 €157,199 €142,801 48%
    €1,000,000 €493,199 €506,801 51%
    €3,000,000 €1,453,199 €1,546,801 52%
    I often think a lot of the housing crisis could be solved if tax on rental income was reduced to a flat rate in line with VAT. It gives the landlords more room to compete in times of over supply and an incentive for others to enter the rental market in times of under supply.
    So, you want better off people with investments to pay less tax than less well off people trying to put food on the table?


    Another way to look at it is.Does the government want all pensioners to be solely reliant on the state to.survive or would it be best that people during their working years invest so that they have some income in their old age ? All the while paying extra taxes for those investment s ?


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