# Discussion:Property over a million but low income..!?



## Rogerio (7 Mar 2013)

Hi...can anyone advise on the situation where a widow is now sole owner of a property worth about one million, possibly slightly more - lives in it alone - owns no other properties and is earning about 25k per year, with very little savings. 

I have read lots of articles in print and online but they all assume that individuals in expensive properties have lots of disposable income. Properties over the million threshold will have a tax of minimum 1.7 grand... that's a hell of alot for someone earning the above salary. Is she supposed to sell her house which has been a family home for past 20+ years or go to bank to seek a loan in order to pay the tax? It's ridiculous.

Thanks for any replies..


----------



## peteb (7 Mar 2013)

It's a tax based on the value of a home. So regardless of any assumption of income why shouldnt she have to pay it? It's back to the argument of city dwellers paying more than country dwellers for the property tax which are equal in size.

She would just have to make provision for it like anyone else would - like people in similar positions with any property.   Assuming she has no mortgage then she should have no issue paying it.  

Sorry if it seems a bit harsh.  But that's life.........and taxes!


----------



## oldnick (7 Mar 2013)

You're absolutely right Rogerio. Morally.

And so is peteb. Legally. Though  I'm unsure  how peteb says that an impoverished widow should have no issue paying two grand extra p.a. !


----------



## dub_nerd (7 Mar 2013)

She might qualify for a full or partial deferral:

http://www.*****************.com/deferral-of-the-property-tax.html

The tax would have to be paid of the house is sold or left as an inheritance. In effect, it's a kind of equity withdrawal to pay the property tax. It incurs annual interest on the deferral amount.


----------



## peteb (7 Mar 2013)

oldnick said:


> You're absolutely right Rogerio. Morally.
> 
> And so is peteb. Legally. Though I'm unsure how peteb says that an impoverished widow should have no issue paying two grand extra p.a. !


 
I think that if she's one person living in a house that's worth a million, even in the current market its going to be a sizeable property.  She can obviously afford to maintain it so whats the problem?  Given its going to be at least 5 bedrooms if she has income issues rent out a room.  Or trade down if a property that size isn't required.

If i can't afford to tax my car i take it off the road or I get a smaller one I can't afford.  Similar principal.


----------



## oldnick (7 Mar 2013)

PeteB. 

Old widow spending her last years in the home that she's spent over 20 years in. Memories and all that sentimental rubbish, what a load of tosh eh? 
Let's slap a new tax on her and if she can't afford it then she just has to leave her home and go elsewhere. It's just the same as changing a car.


----------



## seantheman (8 Mar 2013)

oldnick said:


> Old widow spending her last years in the home that she's spent over 20 years in.


 
Didn't see the word "Old" mentioned anywhere in the OP, in fact it was mentioned that she earned €25K per year so i assume probably not a pensioner. If she cant afford payments, I would advise downsizing or getting a partial deferral and let the balance of LPT accumulate to property. 
Any chance that the LPT itself could be regarded as 
"An unexpected and unavoidable significant financial expense" as set out in condition 7 below and thus entitle her to possible full deferral?



*Condition 7: 
*A person who suffers both an unexpected and unavoidable significant financial loss or
expense, as a result of which he or she is unable to pay the LPT without causing excessive
financial hardship, may apply for full or partial deferral. Claims for this type of deferral will
require full disclosure of the person’s financial circumstances and any other information
required by Revenue in accordance with the detailed guidelines published at​​*www.revenue.ie*​*
*​*
*. Following an examination of the information provided, Revenue will
determine whether deferral should be granted.
To claim deferral under any of these conditions enter the relevant condition number on your Return. You
must also submit all supporting documentation, as required by the relevant Revenue guidelines.​​


----------



## Bronte (8 Mar 2013)

cashier said:


> A million is a lot for a house these days. I think if the house had been in the family for generations there would definitely be an emotional attachment and it would be much harder to part with, however, if she has only has been living there 20 odd years or more I don't think that level of attachment would be built up. Unless she can get help from family members or defer the payments she won't have much choice but to sell it.


 
Where are all these million euro houses that are in families for generations?

The tax can be deferred, or the people who will eventually inherit can help with the tax?

It must be quite difficult to live on 25K in a large house, what with maintenance and heating etc.  I live in a relatively large house myself and the repairs and heating are horrendous.  Once the kids are done for I'm downsizing.


----------



## Odea (8 Mar 2013)

I disagree. I live in a large house with very little income coming in, even less than 25k. I have paid for this house. It is in an area where I always wanted to live. It took me three moves to get here. I have looked after this house over the years doing most of the upkeep myself. I love my house. I tailor my cloth to within an inch of it's life. I don't smoke and I am a modest drinker. So now I have to sell or rent out rooms to stay in my own home?


----------



## Bronte (8 Mar 2013)

Odea said:


> So now I have to sell or rent out rooms to stay in my own home?


 

Based on that Odea it doesn't seem right.  I'm trying to understand the next tax.  I think the last time they introduced a property tax, if you were under a certain income you were exempt. 

If you don't rent a room or sell what are your options?


----------



## peteb (8 Mar 2013)

oldnick said:


> PeteB.
> 
> Old widow spending her last years in the home that she's spent over 20 years in. Memories and all that sentimental rubbish, what a load of tosh eh?
> Let's slap a new tax on her and if she can't afford it then she just has to leave her home and go elsewhere. It's just the same as changing a car.


 
Not a load of tosh.  But is a tax.  I own a car.  It used to cost me €400 to tax, now it costs €700.  Because the cost of road tax went up.  What do I do? I either suck it up and pay the additional tax by tightening my belt.  Or increase my income by using my depreciating assett to deliver pizza to get the extra money.  
Or i downsize my vehicle because I cannot afford the motor tax nor do I wish to put myself out with the pizza delivery hassle!  

Just a simple example.  But these days if you can't afford sentimentality, you can't afford it. 

As I said earlier and Bronte re-iterated, I'm sure there is high running costs associated with the property.


----------



## Odea (8 Mar 2013)

In the mid 90's I paid my local property tax. I think the tax was around for about 3 years if my memory serves me well. I think I paid £2000 x 3 or thereabouts. I had the money then. I paid every penny of my mortgage plus all the interest. I don't owe anyone any money.
I paid my household charge. I drive a modest 1.4 car that is 8 years old. I do not compare my home with my car. I can afford to pay the increased car taxes, just about. These amounts come from savings. I can buy a new fridge if my existing one gives up the ghost. This money comes from my savings. However I know that I will get about 10 years from a fridge. I have a worn carpet on my stairs. I won't replace this, I will live with it. I recently had my carpet "turned". I browse the yellow stickers in Tesco to make a saving. If I go on holiday I check the SuperValu deals or the Pigsback deals or the GrabOne deals. I watch the Ryanair prices to save a €10 here and there. I have downgraded my health insurance policy. I log on to Pumps.ie to see where the cheapest petrol is.
I will have to pay €1700 per annum in Property Taxes. This is a large sum of money and it is relentless. Year after year with regular increases as my home increases in value or the government decides to increase the percentage.
I can afford modest price increases. I can live with those. It is the stuff coming up in the rear view mirror that is the problem.
PeteB maybe I should sell my house and you can buy it. You seem to be flying high...for the moment.


----------



## Palerider (8 Mar 2013)

There is an inequity here, many of the older generation have paid off their homes completely. In many many cases there is no correlation between property value and income within that house from whatever source.

I saved hard and cut corners to have my mortgage paid off in my middle 40's, I had not planned on moving and I resent this tax.

Am I alone in thinking that the first political party to tell the electorate that they are doing away with property taxes gets a landslide vote and if I am half right would that group really care if they are called the monster raving looney party.


----------



## Harry31 (8 Mar 2013)

While I would sympathise to a certain extent with this lady, the bottom line is if I can't afford something I can't have it!  It may seem unfair, but that's the way it is.  Personally, if I had a big house & was having a hard time to make ends meet, I'd sell & get somewhere smaller - would make sense to me.


----------



## Bronte (8 Mar 2013)

Odea said:


> I have a worn carpet on my stairs. I won't replace this, I will live with it. I recently had my carpet "turned". I browse the yellow stickers in Tesco to make a saving. If I go on holiday I check the SuperValu deals or the Pigsback deals or the GrabOne deals. I watch the Ryanair prices to save a €10 here and there. I have downgraded my health insurance policy. I log on to Pumps.ie to see where the cheapest petrol is.
> 
> . It is the stuff coming up in the rear view mirror that is the problem.
> .


 
Odea, it does seem the tax is unfair from your point of view.  Can you defer it and what do you think of the deferal option.

If you don't mind me asking and you don't have to reply, why are you living so frugly, almost painfully, when you could downsize and live a financially easier life?  Is it the way you are, is it you love where you live, is it your home is your castle, is it something to pass on to your children, is it to fund your nursing home bills?


----------



## peteb (8 Mar 2013)

Odea said:


> In the mid 90's I paid my local property tax. I think the tax was around for about 3 years if my memory serves me well. I think I paid £2000 x 3 or thereabouts. I had the money then. I paid every penny of my mortgage plus all the interest. I don't owe anyone any money.
> I paid my household charge. I drive a modest 1.4 car that is 8 years old. I do not compare my home with my car. I can afford to pay the increased car taxes, just about. These amounts come from savings. I can buy a new fridge if my existing one gives up the ghost. This money comes from my savings. However I know that I will get about 10 years from a fridge. I have a worn carpet on my stairs. I won't replace this, I will live with it. I recently had my carpet "turned". I browse the yellow stickers in Tesco to make a saving. If I go on holiday I check the SuperValu deals or the Pigsback deals or the GrabOne deals. I watch the Ryanair prices to save a €10 here and there. I have downgraded my health insurance policy. I log on to Pumps.ie to see where the cheapest petrol is.
> I will have to pay €1700 per annum in Property Taxes. This is a large sum of money and it is relentless. Year after year with regular increases as my home increases in value or the government decides to increase the percentage.
> I can afford modest price increases. I can live with those. It is the stuff coming up in the rear view mirror that is the problem.
> PeteB maybe I should sell my house and you can buy it. You seem to be flying high...for the moment.


 
No.  I can't afford your house.  But i have lived in my modest 3 bed house in negative equity for the last 7 years and would have no issues abandoning ship and downsizing if required. 

However at this stage if you have problems with the property tax, what do you intend to do when you have to pay for water next year?  Cloth has has to be cut to measure.


----------



## peteb (8 Mar 2013)

Just for the record please don't take my attitude as being accepting that one should have to pay a property tax.  I don't necessarily agree with it.  But it is a tax and have no other option.


----------



## oldnick (8 Mar 2013)

No, your attitude comes across to me as... 

The law's the law  old people. If the govnt imposes a new tax that  means you have to move out of your home then you just have to do it.

It doesn't matter if you've been there for twenty or fifty  years , or were even born in it -out you go, regardless of the savings that you make in order to stay in it.


----------



## dereko1969 (8 Mar 2013)

No, you pay it, take a deferral or sell. Three choices.


----------



## peteb (8 Mar 2013)

Well what would you suggest oldnick? ?Its a tax.  It has to be paid.  How someone chooses to finance that is their own issue.  

There's no point in saying I have a nice big house but I can't afford to heat it or maintain it.  But to hell it with it, I am just going to stick with it because i've been here for a while, despite the fact when my income reduces further in the future with age and further taxes come I will in an even worse position.  

I think a €25k income with a €1,700 tax you just have to set the money aside per month.  People in apartment copmplexs paying management fees have to do it all the time.  Surely it's just a a matter of budgeting.  OP also stated there was savings too.


----------



## dereko1969 (8 Mar 2013)

cashier said:


> I think in fairness to the OP* this tax was sprung out of no where within the last couple of years*, Irish people have gotton used to not having water, sewage or property charges. In the UK, USA etc Property/Council taxes are part of the course. In the UK there are exemptions for those on low incomes/Benefits, some people pay partial council tax depending on their income.
> 
> it is harsh in Ireland that there are no discounts for those on lower incomes.


 
How can something that was agreed to 3 years ago as part of the bail-out be regarded as being sprung on people?

You do realise that the whole point of the tax is to broaden the tax base, so that we're not as reliant as we were on the transactional stamp duty? 

How can a tax base be broadened whilst exempting people from it?


----------



## Woodie (8 Mar 2013)

The point that the OP makes is quite valid but equally valid  is the fact local services have to be paid for.  The major problem is one of fairness, the huge amount of secondary taxation introduced in the last years and about to be introduced is really hurting many people.  The fair tax would be a local income tax where everyone paid according to means.  
One of the few benefits of Ireland left was that, effectively you could live in your own home with a frugal  lifestyle and not have a tax.   We / The Govt are now having to introduce this tax out of necessity and not fairness.   We are becoming a very brutal and mean minded society reading the posts here.  This issue of fairness constantly arises in the UK when Council Tax is levied (including council tenants) and can be many times more than the Irish model.  So as the model stands now expect it to get more difficult and more expensive - unless we want to have a revolution and finally take those to account that put us in this place. Guillotine anyone?


----------



## oldnick (8 Mar 2013)

dereko - you ask "_how can the tax base be broadened whilst exempting some people from it ?"_

This thread may give the impression that it's only impecunious old widows dwelling in million plus mansions that are affected.

There are in many parts of Dublin, not only southside,  with "standard" properties valued at 500-700k. Nothing grand. Yet the owners,whether single old people or struggling couples with three kids will now pay several hundred euros every year.

Their counterparts almost anywhere else will pay maybe 100/200 euros.

This new tax is not broadening the tax base -it is concentrating it mainly on a locational basis.

Sorry, have gone off main thrust of thread which is unfairness on poor old people -though it is indeed unfair for them if they happen to live in much of Dublin


----------



## Odea (8 Mar 2013)

peteb said:


> People in apartment copmplexs paying management fees have to do it all the time.


 
But they knew there would be management fees when they purchased their apartment. Just like when you posted earlier that your car tax is €700 per annum. I wouldn't know what make of car has that sort of car tax.


----------



## Gervan (8 Mar 2013)

Selling this million-plus house is presented as an option. But is it? Are there buyers out there? And could it be sold before May 1st? 
It seems to me we are being forced to pay this new tax, with no options, in preference to paying for food or heating. Is that the kind of society we are going to be comfortable with?


----------



## peteb (8 Mar 2013)

No car does.  It was just a simplistic example.   With the management fees exaxmple, most start off in year 1 at a cheap price of €750 and quickly rise in the first five years when costs rise.  The tax just has to be factored in to your day-to-day costs.


----------



## T McGibney (8 Mar 2013)

Odea said:


> Just like when you posted earlier that your car tax is €700 per annum. I wouldn't know what make of car has that sort of car tax.



My car tax is €673 this year, for a 1.9 litre diesel car.


----------



## dub_nerd (8 Mar 2013)

Gervan said:


> Selling this million-plus house is presented as an option. But is it? Are there buyers out there? And could it be sold before May 1st?
> It seems to me we are being forced to pay this new tax, with no options, in preference to paying for food or heating. Is that the kind of society we are going to be comfortable with?


 
If there are no buyers out there, then the market value isn't a million euro, and the tax should be less. It's up to the person to value their own house. I think there is going to be quite a problem with valuations in this fairly  rarefied segment of the market. Who really knows what market values are?

Although I foresee problems elsewhere too. I know a person who lives in an area with a high average value, but the house has not been maintained or upgraded over the years like others have, has the smallest north facing garden on the street, and is mid-terrace. There has been a variation of almost 100 percent in the last two years between the cheapest and most expensive of the very small number of properties sold on the street. This person has no plans to sell and I'd certainly be advising them to come in with a low valuation and challenge Revenue to prove them wrong.


----------



## Odea (9 Mar 2013)

peteb said:


> No car does. It was just a simplistic example. With the management fees exaxmple, most start off in year 1 at a cheap price of €750 and quickly rise in the first five years when costs rise. The tax just has to be factored in to your day-to-day costs.


 
I have no problem with increases in ESB, Gas, Petrol, car tax bills etc. I can fund these out of my savings. I am talking about a new tax here that is going to hit me for €1700 per annum. Next year and the year after and the year after.

It decimates the savings I make by shopping around for my annual car insurance, house insurance, Health Insurance, shopping in Lidl, buying the Dulux rather than the Farrow and Ball paints etc etc  I reckon I save about €500 per annum on being careful about my spending. This tax blows these savings out of the water.


----------



## Bronte (11 Mar 2013)

Odea said:


> , buying the Dulux rather than the Farrow and Ball paints .


 
I have to ask Odea, what on earth is Farrow and Ball paint and why is it better than Dulux.  I thought Dulux was one of the best paints.


----------



## peteb (11 Mar 2013)

Odea said:


> I have no problem with increases in ESB, Gas, Petrol, car tax bills etc. I can fund these out of my savings. I am talking about a new tax here that is going to hit me for €1700 per annum. Next year and the year after and the year after.
> 
> It decimates the savings I make by shopping around for my annual car insurance, house insurance, Health Insurance, shopping in Lidl, buying the Dulux rather than the Farrow and Ball paints etc etc I reckon I save about €500 per annum on being careful about my spending. This tax blows these savings out of the water.


 
I shop around for everything, also buy in Lidl.  My financial situation isn't the best but I have to pay the tax as well but on a lower scale.  

The fact you are even speaking of avoiding Farrow and Ball paints says that you think you should be maintaining a certain standard of maintenance because of the type of property.


----------



## Odea (11 Mar 2013)

Bronte said:


> If you don't mind me asking and you don't have to reply, why are you living so frugly, almost painfully, when you could downsize and live a financially easier life?


 
You are making assumptions again Bronte. It is prudent to make financial savings where one can. I was happy to use a 20% off voucher that djcoors posted in the Homes and Gardens section for Woodies this weekend past. I am happy to take Ciarans advice on the Best Buys section and transfer my savings as needs be. I have benefited from snowyb's helpful advice on health insurance. I get great enjoyment from shopping around and I would be aware of the price of most things. A saving made here and there gives me satisfaction when I splurge on other things that I enjoy doing. 
This morning I shopped around online for my Home Insurance that is coming due and I have made a saving of €65. Next stage is to see if my existing insurers will match the savings. 
I don't live a painful frugal life to use your wording. I have a pretty good and enjoyable lifestyle. As you seem to be tracking all my posts I am not sure if you are trolling me or cannot understand that people lead different lifestyles and have different opinions to your own.


----------



## Odea (11 Mar 2013)

Bronte said:


> I have to ask Odea, what on earth is Farrow and Ball paint and why is it better than Dulux. I thought Dulux was one of the best paints.


Brontes's world again.


----------



## AlbacoreA (11 Mar 2013)

Downsizing isn't possible for everyone. For many it would mean moving far from jobs, family support, schools and perhaps medical facilities. Even then many circumstances might have changed, and they might find it impossible to get a mortgage, and for others they'd lose a tracker. That's assuming they'd find a buyer. 

Downsizing is not that simple for the majority of people.


----------



## SoylentGreen (11 Mar 2013)

peteb said:


> The fact you are even speaking of avoiding Farrow and Ball paints says that you think you should be maintaining a certain standard of maintenance because of the type of property.


 
But if that was the case then Odea would not be shopping around as he does. Paying his insurance on renewal without checking what the competitors are doing. Shopping for his groceries in M&S. He is saying the opposite.


----------



## SoylentGreen (11 Mar 2013)

AlbacoreA said:


> Downsizing isn't possible for everyone. For many it would mean moving far from jobs, family support, schools and perhaps medical facilities. Even then many circumstances might have changed, and they might find it impossible to get a mortgage, and for others they'd lose a tracker. That's assuming they'd find a buyer.
> 
> Downsizing is not that simple for the majority of people.


 
There seems to be an opinion here that if you live in a house with high property tax and on a small income that you have done something wrong and should sell. Why are people being punished for making themselves a comfortable life for themselves?
Get rid of your SKY package and pay a new and unfair tax instead?
Cancel your VHI and pay a tax instead?
Switch off your heating and pay a tax instead?
Don't buy Farrow and Ball paint, buy Woodies paint and gives us your savings made.
This tax is unfair. It should be based on the size of the property and one's ability to pay (income).


----------



## mandelbrot (11 Mar 2013)

SoylentGreen said:


> This tax is unfair. It should be based on the size of the property and one's ability to pay (income).


 
We already have taxes on income, plenty of them.

What do you mean it should be based on size? Do you think that size is a fairer basis than value?? (If so I don't suppose that's because you live in one of the major urban areas?!)


----------



## Bronco Lane (11 Mar 2013)

mandelbrot said:


> What do you mean it should be based on size? Do you think that size is a fairer basis than value??


 
It should be based on size of property and ones ability to pay.
The cost of blocks and wood and tiles and pipes and foundations etc are the same countrywide. So the folks in Leitrim and Clare and Wexford are paying the same to build a house in their locations as the people in Dublin and Cork. If they can afford to pay for a large house in the country then they should also be willing to pay the same tax on it.


----------



## orka (11 Mar 2013)

Woodie said:


> The fair tax would be a local income tax where everyone paid according to means.


Value of home is part of someone's means.  Someone with an income of 25K and a 1M unmortgaged house is better off than someone on an income of 25K and a 200K unmortgaged house.
My mother-in-law is in a similar position - pretty expensive house but very low income so she's going to defer the tax.  It will roll up but she doesn't care - it will only affect things when the house is sold, probably after she dies.  The only people who 'lose' are those inheriting and they don't care either.  There was a man on Joe Duffy last week yakking about how this sort of deferral was unfair to those getting an inheritance which I thought was a bit of a cheek - the means are there to pay the tax, the money just might not surface for a few years - so why should other taxpayers suffer?


----------



## Sumatra (12 Mar 2013)

You could have a condemed property on an acre but a buyer could decide it is the view or some other personal dream makes it worth a million. There is no shortage of people from here and overseas who see such a property as a steal.   

Many of these old properties have not had money spent on them and would probably find it difficult to get a BER cert G and the occupant has probably made more sacrifices in his/her life to live there because it is home.


----------



## truthseeker (12 Mar 2013)

orka said:


> It will roll up but she doesn't care - it will only affect things when the house is sold, probably after she dies.  The only people who 'lose' are those inheriting and they don't care either.



So you are happy enough that in the future there might be situations where the inheritors of family homes may have to sell them to pay off the outstanding taxes. 

I wonder what will happen if properties are worth less than the tax owed. Im thinking of a situation where the tax rolls up for a few decades and then something happens to the property like a fire, rendering it very low value.


----------



## mandelbrot (12 Mar 2013)

truthseeker said:


> So you are happy enough that in the future there might be situations where the inheritors of family homes may have to sell them to pay off the outstanding taxes.


 What's wrong with that? It's not the inheritors that have to sell it, it's the executors, as its a tax owed by the estate. 



truthseeker said:


> I wonder what will happen if properties are worth less than the tax owed. Im thinking of a situation where the tax rolls up for a few decades and then something happens to the property like a fire, rendering it very low value.


Surely it'll come out of the estate and the residue is distributed.


----------



## truthseeker (12 Mar 2013)

mandelbrot said:


> What's wrong with that? It's not the inheritors that have to sell it, it's the executors, as its a tax owed by the estate.



Theres really nothing I can say to you if you think that that is fine. Its a fundamentally different viewpoint. I dont think its fine. Our society seems to be getting colder and more indifferent.



mandelbrot said:


> Surely it'll come out of the estate and the residue is distributed.



What if there isnt enough? If the taxes have rolled up over years and then the property somehow loses value, then how are they to pay the rolled up taxes - if the only estate is the property?


----------



## Bronco Lane (12 Mar 2013)

mandelbrot said:


> Surely it'll come out of the estate and the residue is distributed.


 
So outstanding taxes are paid off and the residue distributed?

Am I right in saying that if a house worth say €900k is left to 3 children then each gets €300k. The inheritance tax free threshold is €225k, so each pays inheritance tax on the remaining €75k.

If a house is worth €900k and is left to 3 children but has outstanding property tax of say €30k then €870k is distributed amongst the 3 children with each receiving €290k each. So each pays inheritance tax on the remaining €65k and not €75k?

Incidentally I agree with truthseeker on his point made.

Seems like a way for someone to reduce an inheritance tax bill. Am I right on this?


----------



## Bronco Lane (12 Mar 2013)

mandelbrot said:


> What's wrong with that? It's not the inheritors that have to sell it, it's the executors, as its a tax owed by the estate.


 
The executor is acting on behalf of the deceased but to suggest that the inheritors are all waiting with baited breath to see what they get while the executor fiddles about is a bit simplistic.

Lots of parents involve their children when making their wills and lots of inheritors have an input in to how their parents estate should be distributed.


----------



## mandelbrot (12 Mar 2013)

truthseeker said:


> Theres really nothing I can say to you if you think that that is fine. Its a fundamentally different viewpoint. I dont think its fine. Our society seems to be getting colder and more indifferent.


yeah I'd say we'll have to agree to differ on this one - it'd be boring if we all agreed  my view of inheritances is that no-one is "entitled" to an inheritance, indeed my Dad has often told us not to be expecting one, that he plans to spend whatever he has, and I think he's dead right - he's worked all his life for what little he has, and I don't see why we have any divine right to an inheritance. A parent's job IMHO is to give their kids a good start in life so that they can make their own way, not to leave them a pot of gold. In fact it's funny you think society is colder and more indifferent, I see society as being more geared towards "entitlement".

But the issue as I see it here is more to do with personal responsibility - you seem to think that a particular class of property owners should be let off the hook just because they can defer indefinitely, and I don't see why that should be the case, when plenty of other people will struggle along and pay the tax as it falls due...





truthseeker said:


> What if there isnt enough? If the taxes have rolled up over years and then the property somehow loses value, then how are they to pay the rolled up taxes - if the only estate is the property?


"They" are dead, the tax is payable out of the estate, if the estate is insufficient then the State loses out.


----------



## truthseeker (12 Mar 2013)

mandelbrot said:


> But the issue as I see it here is more to do with personal responsibility - you seem to think that a particular class of property owners should be let off the hook just because they can defer indefinitely, and I don't see why that should be the case, when plenty of other people will struggle along and pay the tax as it falls due...



Thats not what I think at all but feel free to reinvent my thoughts. I think its a terrible shame if family homes that have been in families for generations cannot be passed along because of taxes.


----------



## Bronco Lane (12 Mar 2013)

mandelbrot said:


> But the issue as I see it here is more to do with personal responsibility - you seem to think that a particular class of property owners should be let off the hook just because they can defer indefinitely, and I don't see why that should be the case, when plenty of other people will struggle along and pay the tax as it falls due...


Those who have to defer will be on an joint income of less than circa €25k. They aren't being let off the hook. Nothing to do with personal responsibility. It has to do with income. They will also pay 4% interest on tax owed.


----------



## Mrmr (12 Mar 2013)

Between the fair deal, deferred LPT and inheritance tax it looks like the state will have the majority of everything a person has worked for returned to them. Quite the communists, aren't we ?


----------



## mandelbrot (12 Mar 2013)

truthseeker said:


> Thats not what I think at all but feel free to reinvent my thoughts. I think its a terrible shame if family homes that have been in families for generations cannot be passed along because of taxes.


 
Touchy! I did say "you seem to think"...

Can you explain what you do think should happen so, to avoid the terrible shame you describe above?

I think if it comes to the property having to be sold outside the family against the wishes of the family, the prospective inheritors should blame their parent(s) for not paying the tax and allowing that situation to develop, or not asking for their help to deal with the issue, or themselves for not acting in the previous decades to ensure it wouldn't come about (we are talking about family here, unless your perception of coldness & indifference extends to families too).

If everyone was so concerned about South Fork not having to be sold to outsiders, then they had decades to make sure the situation wouldn't arise.

Just to try to bring some perspective to this - take a house worth 400k, assume LPT at 0.18% p.a. plus 4% interest, for 20 years (ignoring inflation or any change in value) - this results in a liability of just over 22k. God forbid my Dad died in the morning and left me €400k worth of house after him not paying LPT for 20 years, I think I'd be willing to deal with that tax consequence.


----------



## truthseeker (12 Mar 2013)

mandelbrot said:


> Can you explain what you do think should happen so, to avoid the terrible shame you describe above?



I think that some provision should be made for an inability to pay, not just mounting debt with interest to be taken from an estate upon death. 

My father in law cant afford this tax. We have all told him we dont care about the property, the estate etc... But he feels like a failure that he cannot get this sorted while he is alive, he has no choice but to defer. There are many people like him.

What about young people who are already in financial difficulty, mortgage arrears, debt etc.... How is more debt going to help them? 

Perhaps you are in a comfortable financial position and dont have these kinds of real life worries, but plenty of people do and its not nice for them.

As Bronco Lane has pointed out, its not about personal responsibility, its about income.


----------



## Dermot (12 Mar 2013)

My family just worked in very ordinary jobs but if we saw that our Father or Mother needed money for some thing that was necessary we would club together and sort it out


----------



## mandelbrot (12 Mar 2013)

truthseeker said:


> I think that some provision should be made for an inability to pay, not just mounting debt with interest to be taken from an estate upon death.
> 
> My father in law cant afford this tax. We have all told him we dont care about the property, the estate etc... But he feels like a failure that he cannot get this sorted while he is alive, he has no choice but to defer. There are many people like him.
> 
> ...


 
And if there is insufficient income, then it can be deferred - it's a tax charged on the value of an asset at the end of the day.

It's the people in negative equity I have sympathy for, since they don't actually have an asset, but a millstone around their necks.

People with free and clear ownership of a valuable asset have plenty of choice, and the ability to defer - it's then up to the benificiaries of their estate to decide what they want to do about the accrued tax.

*EDIT: And just to reiterate a quite simple fact - if the LPT is deferred for 20 years, at current rates, the liability including interest would run to somewhere around 5 - 6% of the property value (assuming static prices).*


----------



## mandelbrot (12 Mar 2013)

truthseeker said:


> Perhaps you are in a comfortable financial position and dont have these kinds of real life worries, but plenty of people do and its not nice for them.


 
Yeah, I'm so comfortable that I can't afford to buy a house even at today's prices  For someone who took such exception to me inferring what I thought you meant a few posts ago, you're quick enough to leap to conclusions about my finances based on nothing at all.


----------



## truthseeker (12 Mar 2013)

Dermot said:


> My family just worked in very ordinary jobs but if we saw that our Father or Mother needed money for some thing that was necessary we would club together and sort it out



So would we but 8 redundancies between 5 people in the past 3 years has left no one in much of a position to help out - we already help him out financially for food, medicine, physio etc....


----------



## Tintagel (12 Mar 2013)

mandelbrot said:


> *It's not the inheritors that have to sell it, it's the executors, as its a tax owed by the estate. *


 
*" it's then up to the benificiaries of their estate to decide what they want to do about the accrued tax."*

Which is it?


----------



## mandelbrot (12 Mar 2013)

Tintagel said:


> Which is it?


 
I was wondering if anyone would pull me on that! - all I know is the LPT is a charge on the property and has to be discharged when the property is sold/transferred. I don't know enough about succession to figure that out, but does it really make much difference?


----------



## SarahMc (12 Mar 2013)

truthseeker said:


> Thats not what I think at all but feel free to reinvent my thoughts. I think its a terrible shame if family homes that have been in families for generations cannot be passed along because of taxes.



I don't know of any home that has been in a family for generations. Well maybe farms, but not in urban areas. 

I really don't think deferral of the property tax will lead to houses not being passed along. I think that's a red herrring tbh. I understand where your dad is coming from, it's like the need to have enough to bury themselves. It's a huge fear of debt and the shame of debt that that generation had. Certainly my own parents did. But I don't think we can legislate for that, it would be too problematic.


----------



## truthseeker (12 Mar 2013)

SarahMc said:


> I don't know of any home that has been in a family for generations. Well maybe farms, but not in urban areas.



I know a few, not many, but a few.



SarahMc said:


> I really don't think deferral of the property tax will lead to houses not being passed along.



Well its more likely that people wont qualify for deferral and will either have to sell their home or get a loan to pay it. The deferral criteria is quite low - for example the opening post of this thread - the lady in question wouldnt qualify for deferral. I havent seen a reasonable answer to her problem (or that of other posters with a similar problem) yet on this thread.

I agree we cannot legislate for fear and shame of debt, but it might help if the government could design a fair tax based on ability to pay.


----------



## dereko1969 (12 Mar 2013)

The OP in this case may qualify for a partial deferral. 

Or she could pay €34 euro per week out of her gross income which is €480 a week, I hardly think this should be a huge difficulty. 

This reminds me of the numpties who were defending that millionaire couple who were being evicted from their house in Killiney. 

The OP has *no mortgage* and a very significant income, what is she doing with all that money that she can't afford €34 a week? There are plenty of other people more deserving of sympathy than this case.


----------



## truthseeker (12 Mar 2013)

dereko1969 said:


> The OP has *no mortgage* and a very significant income, what is she doing with all that money that she can't afford €34 a week? *There are plenty of other people more deserving of sympathy than this case.*



Thats quite a sweeping statement considering you have no idea what her outgoings are.


----------



## mandelbrot (12 Mar 2013)

cashier said:


> Where does it say that she has a significant income, if you referring to the €25000 approx €400 net I think you are mistaken if you think that measly sum is significant.


 
I reckon it at €420 - €450 net per week, depending on whether under or over 65.

The point is there are people struggling to pay mortgages and raise families on similar amounts of money, AS WELL AS paying their own LPT. In other words, her case is not one of particular hardship, relatively speaking.


----------



## mandelbrot (12 Mar 2013)

cashier said:


> You have no idea of her outgoings perhaps high medical bills, if she is single she will not be cliaming FIS or what ever family supports are available to families on low incomes.


 In which case she'll almost certainly be allowed to defer under financial hardship. I'm not saying she should be forced to pay it, let her defer it if she genuinely can't afford to pay it, and then let the tax be paid when the property is sold/transferred.



cashier said:


> Besides I am sure it is not easy having to maintain a million euro home!


 
And I'm sure I'll never know how easy or hard it is to maintain a mansion!


----------



## truthseeker (12 Mar 2013)

mandelbrot said:


> In which case she'll almost certainly be allowed to defer under financial hardship.



15k income for a single person - she is over the limit for deferral (that may not be the final figure, but is what has been in the media).


----------



## seantheman (12 Mar 2013)

truthseeker said:


> 15k income for a single person - she is over the limit for deferral (that may not be the final figure, but is what has been in the media).


 
I haven't had any feedback or opinions on my post No.9 as regards whether deferral would/should be allowed


----------



## truthseeker (12 Mar 2013)

seantheman said:


> I haven't had any feedback or opinions on my post No.9 as regards whether deferral would/should be allowed



Id be interested to know the meaning of 





> without causing *excessive financial hardship*



I wonder what constitutes excessive financial hardship in the eyes of the revenue?


----------



## Bronte (13 Mar 2013)

Odea said:


> As you seem to be tracking all my posts I am not sure if you are trolling me or cannot understand that people lead different lifestyles and have different opinions to your own.


 

Of course I'm not tracking all your posts and I'm certainly not trolling but I apologise if I've said something to offend you.


----------



## Bronte (13 Mar 2013)

mandelbrot said:


> *EDIT: And just to reiterate a quite simple fact - if the LPT is deferred for 20 years, at current rates, the liability including interest would run to somewhere around 5 - 6% of the property value (assuming static prices).*


 

Well Mandelbrot I must say that if that's the case then it doesn't seem so bad. From a purely financial point of view. So those who cannot afford it can defer the tax and it goes out of their estate. Is that so awful. They're used to be a tax on estates at one point about 25 years ago, I forget the name of it. (I'm not talking about the previous property tax)

From a compliant tax payer point of view I would prefer that this tax is paid out of the estate having been deferred rather than people doing what they did last time and not paying it in vast numbers and ultimately written off. 

Whatever it is about this tax it seems to make people very angry. Having paid the NPPR over the last few years myself maybe I'm lacking in empathy. Do people want income tax to rise instead?

And I think that anger can be directed not at posters on here who did not bring in the tax but at the next polling day and everybody vote for FF who on the usual vote gatering exercise will vote to abolish this tax (might have a problem with the troike though).  But one way or another as we continue to pay out more (Croke park etc) than we take in, taxes have to rise.  And if we're all going to write off everybodies NE as well, well we'll need more taxes for that too. 

What really makes me angry though is that I don't mind paying taxes, I hate the waste.  If we could see where the taxes actually go and there were some kind of accountability then things might improve a lot quicker.


----------



## Tintagel (13 Mar 2013)

mandelbrot said:


> I was wondering if anyone would pull me on that! - all I know is the LPT is a charge on the property and has to be discharged when the property is sold/transferred. I don't know enough about succession to figure that out, but does it really make much difference?


 Not really. But you were very happy to make this point to put Truthseeker in his or her place.


----------



## Tintagel (13 Mar 2013)

Bronte said:


> Do people want income tax to rise instead?


 
When rates were abolished back in the 1970's a tax of 2% was put on income to compensate. That tax is effectively still there.


----------



## seantheman (13 Mar 2013)

Bronte said:


> And I think that anger can be directed not at posters on here who did not bring in the tax but at the next polling day and everybody vote for FF who on the usual vote gatering exercise will vote to abolish this tax (might have a problem with the troike though). .


 
I take it you're having a laugh here
Aren't you?
It was a Fianna Fail Government that negotiated the first Memorandum of Understanding with the Troika. That agreement contained a clear commitment to introduce a property tax for budget 2012 as part of a revenue raising package of €1.6bn. 
Fianna Fail’s 2012 pre-budget submission included a proposal for a property tax to raise €120 million.


----------



## BOXtheFOX (13 Mar 2013)

seantheman said:


> I take it you're having a laugh here
> Aren't you?
> It was a Fianna Fail Government that negotiated the first Memorandum of Understanding with the Troika. That agreement contained a clear commitment to introduce a property tax for budget 2012 as part of a revenue raising package of €1.6bn.
> Fianna Fail’s 2012 pre-budget submission included a proposal for a property tax to raise €120 million.


 
Yes, but might it have been introduced in a fairer way under FF?


----------



## BOXtheFOX (13 Mar 2013)

Bronco Lane said:


> So outstanding taxes are paid off and the residue distributed?
> 
> Am I right in saying that if a house worth say €900k is left to 3 children then each gets €300k. The inheritance tax free threshold is €225k, so each pays inheritance tax on the remaining €75k.
> 
> ...


 
Anyone know the answer to this?


----------



## seantheman (13 Mar 2013)

BOXtheFOX said:


> Yes, but might it have been introduced in a fairer way under FF?


 
Ye just posted that rubbish to get even with me on posts, didn't you


----------



## dereko1969 (13 Mar 2013)

truthseeker said:


> 15k income for a single person - she is over the limit for deferral (that may not be the final figure, but is what has been in the media).


 
That's why I stated a partial deferral - you see I actually read the Revenue guidebook before posting rather than rely on what the media have been spouting - i suggest you do the same if you want to live up to your name.


----------



## Bronte (13 Mar 2013)

seantheman said:


> That agreement contained a clear commitment to introduce a property tax for budget 2012 as part of a revenue raising package of €1.6bn.
> Fianna Fail’s 2012 pre-budget submission included a proposal for a property tax to raise €120 million.


 
Didn't realise this. So FF cannot promise that. So then we're no doubt left with SF and the likes of Boyd Barrett who I hear preaching debt forgiveness for all but never answers who is going to pay for everything. Wonderful options SF and the independants. 

Are the likes of Ming et al telling people not to pay this new tax the same as they did with the household charge? And if they are I hope they are pointing out the awful sting of 8% penalty. You can be sure based on the figures of compliance on the household charge that people are really up in arms because they have no way out of this one. Every wrong step they take, just not replying to revenue, undervaluing, not paying has some kind of severe penalty. The government has really learnt what works. I expect massive compliance. 

Mandelbot if you don't mind, you've calculated the tax would be equal to 5% if you deffered for 20 years based on a 4% charge. What would it be as a percentage of the property value without the 4% charge. To see what saving one would make by not defering.

(the other tax on estates I was referring to earlier was I think called a probate tax)


----------



## truthseeker (13 Mar 2013)

dereko1969 said:


> That's why I stated a partial deferral - you see I actually read the Revenue guidebook before posting rather than rely on what the media have been spouting - i suggest you do the same if you want to live up to your name.



Revenue havent sent me a guidebook. No need for the attitude.


----------



## seantheman (13 Mar 2013)

truthseeker said:


> Revenue havent sent me a guidebook.


 
It's all here http://www.revenue.ie/en/tax/lpt/index.html


----------



## seantheman (13 Mar 2013)

BOXtheFOX said:


> Yes, but might it have been introduced in a fairer way under FF?


 
Ah yeah,I forgot,we have a more compassionate FF now that they're in opposition. Back in 2011 before the election we had Micheál Martin, Éamon Ó'Cuív, Brendan Smith, Dara Calleary, Niall Collins, Willie O'Dea, Billy Kelleher, Michael McGrath, Sean Fleming whereas now we have..... hold on!


----------



## dereko1969 (13 Mar 2013)

truthseeker said:


> Revenue havent sent me a guidebook. No need for the attitude.


 
I wasn't sent it either, I didn't wait to be spoon fed, I sought out the information which wasn't all that difficult to find.


----------



## Mrmr (13 Mar 2013)

I'm angry because instead of banking risk decisions at the top incurring loses to those who invested in a normal manner, we are in a rolling process from now on, it seems, of handing over everything to roll up toward the top of the pyramid. I don't want that.


----------



## mandelbrot (13 Mar 2013)

Bronte said:


> Mandelbot if you don't mind, you've calculated the tax would be equal to 5% if you deffered for 20 years based on a 4% charge. What would it be as a percentage of the property value without the 4% charge. To see what saving one would make by not defering.


 
Well assuming no change in value or tax rate over the 20 years:

0.18% x 4% x 20 +
0.18% x 4% x 19 +
0.18% x 4% x 18 ... etc

I make it 1.512%

If the nominal value increases over time it probably decreases that %


----------



## dub_nerd (14 Mar 2013)

mandelbrot said:


> Well assuming no change in value or tax rate over the 20 years:
> 
> 0.18% x 4% x 20 +
> 0.18% x 4% x 19 +
> ...


 
You're using simple interest -- does it not get compounded? ... in which case it would be 1.974%


----------



## dub_nerd (17 Mar 2013)

Just as a matter of interest for anyone considering deferring the LPT -- if your circumstances improve in future do you have to pay previous years off, or can they be left deferred until the property is eventually sold?


----------



## mandelbrot (17 Mar 2013)

dub_nerd said:


> You're using simple interest -- does it not get compounded? ... in which case it would be 1.974%



What makes you think it would be compounded? Statutory interest on any other tax liability is simple interest so it's logical to assume the rate quoted is simple interest.


----------



## dub_nerd (17 Mar 2013)

mandelbrot said:


> What makes you think it would be compounded? Statutory interest on any other tax liability is simple interest so it's logical to assume the rate quoted is simple interest.


 
Nothing makes me think it would be compounded. That's why there's a question mark after "does it not get compounded" ... because it's a question.


----------



## mandelbrot (17 Mar 2013)

dub_nerd said:


> Nothing makes me think it would be compounded. That's why there's a question mark after "does it not get compounded" ... because it's a question.



Looked like a rhetorical question to me... eg. "Aren't you Dub_nerd?"


----------



## dub_nerd (17 Mar 2013)

No, genuine question. I try to avoid rhetoric. Thanks for answering anyway.

Allow me to bump my latest one ...

If you defer the property tax and your circumstances improve in future do you have to pay previous years off, or can they be left deferred until the property is eventually sold? 
​


----------



## STEINER (17 Mar 2013)

Bronco Lane said:


> So outstanding taxes are paid off and the residue distributed?
> 
> Am I right in saying that if a house worth say €900k is left to 3 children then each gets €300k. The inheritance tax free threshold is €225k, so each pays inheritance tax on the remaining €75k.
> 
> ...



If the €900k house was inherited, any inheritance tax liability is calculated using the €900k value.

The €30k property tax liability is separate.


----------



## Mrs Vimes (17 Mar 2013)

The €30k would be paid from the estate and the residue distributed.

CAT is payable on the amount inherited.

@Bronco Lane, this would indeed reduce an inheritance tax bill. So would willing €30k to the Irish Cancer Society or any other charity. While the amount of tax payable by each beneficiary is reduced by €3,000, the amount inherited is reduced by €10,000 so they are worse off by €7,000 each.


----------

