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More landlords to sell up over taxes and cost of letting property

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Comments

  • #2
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    It's silly scaremongering because if the houses are not being sold to other investors, they will be used as PPR's, I.e. It's a zero sum transaction that doesn't add or subtract from the national housing stock.


  • #3
    Atlantic Dawn
    Registered Users Posts: 81,073 ✭✭✭✭Atlantic Dawn
    M


    Good news for the economy.


  • #4
    riclad
    Registered Users Posts: 8,184 ✭✭✭riclad


    There are many investors who bought between 2000 and 2007,
    at a high price ,
    The rental income hardly covers the mortgage and they have to pay taxes and property tax.
    The profit they make is small or they make no profit .
    They will sell up as soon as they can ,when the bank allows them to.
    Government policy seems to be to increase costs on landlord,s .
    Even as the shortage of rental property is increasing rents ,
    and making ireland a bad place for companys to invest in.
    Governments seem to see landlords as just another easy target to collect extra taxes, from.


  • #5
    4ensic15
    Banned (with Prison Access) Posts: 4,691 ✭✭✭4ensic15


    gaius c wrote: »
    It's silly scaremongering because if the houses are not being sold to other investors, they will be used as PPR's, I.e. It's a zero sum transaction that doesn't add or subtract from the national housing stock.

    No it isn't. There are numerous houses in flats on sale in DAFT. Most will be converted to single dwellings. In many cases it will be 20 tenants out, family of 4 in. Many FTBs will live in a 1 bed apt and buy a 3 bed house. The former residents of the 3 bed house need 2 1 bed apts in lieu.
    Landlords exiting lowers supply.


  • #6
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    gaius c wrote: »
    It's silly scaremongering because if the houses are not being sold to other investors, they will be used as PPR's, I.e. It's a zero sum transaction that doesn't add or subtract from the national housing stock.

    Ok so a family buy a house that was formally in flats. Thats X amount of flats off the market.


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  • #7
    Reagan Clever Pecan
    Posts: 0 ✭ Reagan Clever Pecan


    gaius c wrote: »
    It's silly scaremongering because if the houses are not being sold to other investors, they will be used as PPR's, I.e. It's a zero sum transaction that doesn't add or subtract from the national housing stock.

    A good percentage of the houses will also be houseshares. So a 3 bedroom house with 3 people is bought by a person who intends to live a alone (2 less bed spaces) or a couple so one less bed space or a 4bdrm house bought by a couple so 2 people living in the house rather than 4 etc.


  • #8
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    4ensic15 wrote: »
    No it isn't. There are numerous houses in flats on sale in DAFT. Most will be converted to single dwellings. In many cases it will be 20 tenants out, family of 4 in. Many FTBs will live in a 1 bed apt and buy a 3 bed house. The former residents of the 3 bed house need 2 1 bed apts in lieu.
    Landlords exiting lowers supply.

    A house suitable for a family of 4 houses 20???

    Have you any more makey uppy anecdotes that actually weaken the argument you are trying to make?


  • #9
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    Magnolia Enough Typographer wrote: »
    A good percentage of the houses will also be houseshares. So a 3 bedroom house with 3 people is bought by a person who intends to live a alone (2 less bed spaces) or a couple so one less bed space or a 4bdrm house bought by a couple so 2 people living in the house rather than 4 etc.

    There's a nuance that Marian Finnegan didn't bother trying to make. Her tone appears to imply that the housing units vanish. It's scaremongering and deserves to be called as such.

    The opposite could also be the case. 2 bed property occupied by two adults is sold to a family of 4. And I can verify that one because I'm the landlord who sold it.

    Also a mate of mine living in Kimmage has finally moved out of the suburban house he occupied all by himself (he was on good money and couldn't be bothered replacing housemates who left and the landlord never stuck up the rent). Now that is up for sale and will almost certainly have higher occupancy once it's sold.


  • #10
    listermint
    Registered Users Posts: 33,575 ✭✭✭✭listermint


    4ensic15 wrote: »
    No it isn't. There are numerous houses in flats on sale in DAFT. Most will be converted to single dwellings. In many cases it will be 20 tenants out, family of 4 in. Many FTBs will live in a 1 bed apt and buy a 3 bed house. The former residents of the 3 bed house need 2 1 bed apts in lieu.
    Landlords exiting lowers supply.

    I mean, Where did you even come up with this nonsense ??


    How many 10-20 dwelling apartments have been converted into single family housing!?

    How many 3-4 apartments have been converted into single family housing.


    Just made up!


  • #11
    listermint
    Registered Users Posts: 33,575 ✭✭✭✭listermint


    Magnolia Enough Typographer wrote: »
    A good percentage of the houses will also be houseshares. So a 3 bedroom house with 3 people is bought by a person who intends to live a alone (2 less bed spaces) or a couple so one less bed space or a 4bdrm house bought by a couple so 2 people living in the house rather than 4 etc.

    or a family of 4 rather than 4 individuals ...


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  • #12
    lima
    Registered Users Posts: 1,239 ✭✭✭lima


    4ensic15 wrote: »
    No it isn't. There are numerous houses in flats on sale in DAFT. Most will be converted to single dwellings. In many cases it will be 20 tenants out, family of 4 in. Many FTBs will live in a 1 bed apt and buy a 3 bed house. The former residents of the 3 bed house need 2 1 bed apts in lieu.
    Landlords exiting lowers supply.

    That's a super-weak argument with complete speculation.

    I moved out of a rented 1br apt and into a purchased 2br apt. I bought off a bust landlord, so took that off the rental market but gave my rental back to the rental market. Now there's one less landlord and one more FTB owner. Proper order.


  • #13
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    listermint wrote: »
    I mean, Where did you even come up with this nonsense ??


    How many 10-20 dwelling apartments have been converted into single family housing!?

    How many 3-4 apartments have been converted into single family housing.


    Just made up!

    Good article in the times today it might just help you understand. But it doesn't really matter if you believe or not its happening and the rental prices are proof it.

    http://www.irishtimes.com/news/social-affairs/rental-crisis-why-landlords-are-struggling-to-make-money-1.2430983


  • #14
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    handlemaster wrote: »
    Good article in the times today it might just help you understand. But it doesn't really matter if you believe or not its happening and the rental prices are proof it.

    http://www.irishtimes.com/news/social-affairs/rental-crisis-why-landlords-are-struggling-to-make-money-1.2430983

    Which is a serious goalpost shift from the scaremongering link you posted in the OP.


  • #15
    vandriver
    Registered Users Posts: 3,458 ✭✭✭vandriver


    handlemaster wrote: »
    Good article in the times today it might just help you understand. But it doesn't really matter if you believe or not its happening and the rental prices are proof it.

    http://www.irishtimes.com/news/social-affairs/rental-crisis-why-landlords-are-struggling-to-make-money-1.2430983

    Its a self serving and deliberately selective article which the journalist seems to have regurgitated word for word from the Landlord's Associations Fintan McNamara.
    It confuses cash flow with profit.(Hint :you pay tax on the profit).
    Also,the tax figure quoted seems too high.


  • #16
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    gaius c wrote: »
    Which is a serious goalpost shift from the scaremongering link you posted in the OP.

    Same point in both articles


  • #17
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    vandriver wrote: »
    Its a self serving and deliberately selective article which the journalist seems to have regurgitated word for word from the Landlord's Associations Fintan McNamara.
    It confuses cash flow with profit.(Hint :you pay tax on the profit).
    Also,the tax figure quoted seems too high.


    If it were only true. Landlord doesnt have to make a profit to pay tax.


  • #18
    vandriver
    Registered Users Posts: 3,458 ✭✭✭vandriver


    handlemaster wrote: »
    If it were only true. Landlord doesnt have to make a profit to pay tax.
    An actual loss,as opposed to negative cash flow?


  • #19
    handlemaster
    Registered Users Posts: 6,003 ✭✭✭handlemaster


    vandriver wrote: »
    An actual loss,as opposed to negative cash flow?

    Tax is due on rent received regardless if you are making a profit or not


  • #20
    vandriver
    Registered Users Posts: 3,458 ✭✭✭vandriver


    handlemaster wrote: »
    Tax is due on rent received regardless if you are making a profit or not

    How are you defining 'making a profit'?


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


    vandriver wrote: »
    Its a self serving and deliberately selective article which the journalist seems to have regurgitated word for word from the Landlord's Associations Fintan McNamara.
    It confuses cash flow with profit.(Hint :you pay tax on the profit).
    Also,the tax figure quoted seems too high.

    It also doesn't mention tax relief for expenses and mortgage interest.

    Seriously, the whole media appears as a completely vested interest!


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  • #22
    Reagan Clever Pecan
    Posts: 0 ✭ Reagan Clever Pecan


    vandriver wrote: »
    How are you defining 'making a profit'?

    I don't think the term making a profit is open to interpretation. It's a pretty straight forward concept.

    If after paying the mortgage and all other costs associated with the rental property including tax on the rent and he has made money then he is making a profit.

    A LL should really only be paying tax on the actual profit if there is any. So rent minus 100% of the yearly mortgage (interest and capital) along with all other expenses.


  • #23
    Gumbo
    Moderators, Society & Culture Moderators Posts: 38,354 Mod ✭✭✭✭Gumbo


    Magnolia Enough Typographer wrote: »

    A LL should really only be paying tax on the actual profit if there is any. So rent minus 100% of the yearly mortgage (interest and capital) along with all other expenses.

    Should, but that's not the case in reality. You pay tax on all rent received (less relief and expenses).

    So while you may on paper be getting in more than the outgoing a, you will still pay above and beyond on tax.

    With regards to the 3-4 flat structures being converted to single dwellings, very popular in Dublin city now with buildings that cannot meet the housing standards and regulations for fire safety. We have seen a lot of planning and commencement notices for these types of works.


  • #24
    dubrov
    Registered Users Posts: 3,542 ✭✭✭dubrov


    The normal definition of profit normally includes capital gains.
    Otherwise a landlord could divert all taxable income to capital re-payments and completely avoid tax.


  • #25
    vandriver
    Registered Users Posts: 3,458 ✭✭✭vandriver


    Magnolia Enough Typographer wrote: »
    I don't think the term making a profit is open to interpretation. It's a pretty straight forward concept.

    If after paying the mortgage and all other costs associated with the rental property including tax on the rent and he has made money then he is making a profit.

    A LL should really only be paying tax on the actual profit if there is any. So rent minus 100% of the yearly mortgage (interest and capital) along with all other expenses.

    Obviously its not as straightforward as you seem to think!
    Only the interest element of the mortgage is a cost.


  • #26
    khamilto
    Closed Accounts Posts: 221 ✭✭khamilto


    Magnolia Enough Typographer wrote: »
    I don't think the term making a profit is open to interpretation. It's a pretty straight forward concept.

    If after paying the mortgage and all other costs associated with the rental property including tax on the rent and he has made money then he is making a profit.

    A LL should really only be paying tax on the actual profit if there is any. So rent minus 100% of the yearly mortgage (interest and capital) along with all other expenses.

    It's ironic that you stay it isn't open to interpretation and is pretty straight forward, and then show that you have no idea what profit actually means and how it's generally construed and constructed in business.

    It also isn't a pretty straight forward concept, there has long been a movement arguing that asset appreciation should be taxed when it occurs, not when the appreciation is realised via disposal of it. Almost every other form of income is taxed immediately.


  • #27
    Gumbo
    Moderators, Society & Culture Moderators Posts: 38,354 Mod ✭✭✭✭Gumbo


    vandriver wrote: »
    Obviously its not as straightforward as you seem to think!
    Only the interest element of the mortgage is a cost.

    Only 75% of the interest portion is an allowable cost ;)


  • #28
    vandriver
    Registered Users Posts: 3,458 ✭✭✭vandriver


    kceire wrote: »
    Only 75% of the interest portion is an allowable cost ;)
    Which is why I didn't mention allowable. Mine was a more general comment on how to arrive at a profit figure.


  • #29
    wenbo
    Registered Users Posts: 15 ✭wenbo


    Change "If after paying the mortgage" to "If after paying the mortgage INTEREST"
    Magnolia Enough Typographer wrote: »
    I don't think the term making a profit is open to interpretation. It's a pretty straight forward concept.

    If after paying the mortgage and all other costs associated with the rental property including tax on the rent and he has made money then he is making a profit.

    A LL should really only be paying tax on the actual profit if there is any. So rent minus 100% of the yearly mortgage (interest and capital) along with all other expenses.


  • #30
    Reagan Clever Pecan
    Posts: 0 ✭ Reagan Clever Pecan


    kceire wrote: »
    Should, but that's not the case in reality. You pay tax on all rent received (less relief and expenses).

    So while you may on paper be getting in more than the outgoing a, you will still pay above and beyond on tax.

    With regards to the 3-4 flat structures being converted to single dwellings, very popular in Dublin city now with buildings that cannot meet the housing standards and regulations for fire safety. We have seen a lot of planning and commencement notices for these types of works.
    vandriver wrote: »
    Obviously its not as straightforward as you seem to think!
    Only the interest element of the mortgage is a cost.
    wenbo wrote: »
    Change "If after paying the mortgage" to "If after paying the mortgage INTEREST"

    I think you have all misunderstood the point I was making

    I know only 75% of mortgage interest is allowed as an expense. The point I was making that in order to make the system fair a LL should be allowed to deduct his entire mortgage payment from the rent (along with other allowed expenses) in order to arrive at his taxable rental income.

    You should only be paying tax on profit, gross rental income less a few small expenses is not profit as there is a mortgage being paid also.
    vandriver wrote: »
    Which is why I didn't mention allowable. Mine was a more general comment on how to arrive at a profit figure.

    If you are making more money from renting you house than its costing you to rent it then you are making a profit and tax should (in a fair system) only be paid on the actual profit. i.e. the money the LL is actually earning and is put away in a savings account not paid out on a mortgage or other expenses.


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  • #31
    gaius c
    Registered Users Posts: 3,528 ✭✭✭gaius c


    Magnolia Enough Typographer wrote: »
    I know only 75% of mortgage interest is allowed as an expense. The point I was making that in order to make the system fair a LL should be allowed to deduct his entire mortgage payment from the rent (along with other allowed expenses) in order to arrive at his taxable rental income.

    You should only be paying tax on profit, gross rental income less a few small expenses is not profit as there is a mortgage being paid also.

    Are you having a laugh? Capital repayments should never be an allowable business expense.

    You're confusing cash flow with profit while also ignoring that the landlord is increasing equity.


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