# New property tax



## z106

What do people think of thsi new property tax that may be introduced?
My unerstanding of it may be incorrect but am i right in saying that anyone that owns a second home or a buy-to-let will be subjected to a tax?
Is my understanding correct?

Personaly I hink introducing a blanket tax on anyone just because they own a second property is unfair.

Back in the day property buyers who paid exceptionally high stamp duty by international standards were all told that at least we don't have a propety tax.
Now it seems that people that bought in the last couple of years will have paid both crazy high stamp suty as well as now being subjected to an ongoing property tax to top it all off.
This to me seems draconian and unfair.

A lot of people who bought a buy-to-let in the last couple of years now have a significant paper loss.

Surely the idea of tax is that people should give over part of their *profits* to the tax man.

MAny people these days are at a loss due to taking on a second property.
Obviously like any business that is the risk they took on and that's the way the cookie crumbles and all that.

However I certainly don't see why they should be subjected to a further property tax while their business runs at a loss.

Why not target profit making businesses instead?


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## kkelliher

the main problem with this idea is it is not balanced with the need.

The government are looking at this as a way of stabilising income streams into them but with directing it at second homes they wont get this as depending on the level of the tax, they may well end up killing the market and a high % of those with second homes will move them off shore. 

They may also find that as an "expense" to the business of renting this may result in a reduction in income tax on the rental income. Assuming they follow the lead of other countries where it is classed as an expense.

The other main problem I have with it weather it will take any account of the fact that stamp duty has already been paid on the property? Will there be a rebate for those who already paid their due taxes?

Also isnt it great to hear all the red hot socialists on Joe Duffy claiming taxes on all those who are trying to make money. They seem to forget that without those out there trying to make money there will be no economy. I very much feel the begrugury of the irish knows no bounds


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## z104

If a property tax is brought in it will just raise rents. It's very simple. The landlord won't be at a loss so it will become a tax on renters. This may persuade renters that they would be better off buying. So it may have the effect of kick starting the housing market again.


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## SteveW9

qwertyuiop said:


> What do people think of thsi new property tax that may be introduced?
> My unerstanding of it may be incorrect but am i right in saying that anyone that owns a second home or a buy-to-let will be subjected to a tax?
> Is my understanding correct?
> 
> Personaly I hink introducing a blanket tax on anyone just because they own a second property is unfair.
> 
> Back in the day property buyers who paid exceptionally high stamp duty by international standards were all told that at least we don't have a propety tax.
> Now it seems that people that bought in the last couple of years will have paid both crazy high stamp suty as well as now being subjected to an ongoing property tax to top it all off.
> This to me seems draconian and unfair.
> 
> A lot of people who bought a buy-to-let in the last couple of years now have a significant paper loss.
> 
> Surely the idea of tax is that people should give over part of their *profits* to the tax man.
> 
> MAny people these days are at a loss due to taking on a second property.
> Obviously like any business that is the risk they took on and that's the way the cookie crumbles and all that.
> 
> However I certainly don't see why they should be subjected to a further property tax while their business runs at a loss.
> 
> Why not target profit making businesses instead?


I think its a great idea to tax 2nd properties, people who bought 2nd houses for investment purposes using the equity on their orginal house, priced first time buyers(who were only trying to get somewhere to live) out of the market. 
Their greed is partly responsible for the mess we are in now so its time for some payback. Its great that eventually(probably in about a years time becuase people are still asking insnae prices for crap houses) that a 1st time buyer may actually be able to afford somewhere decent to live.


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## David_Dublin

It'll certainly affect the margins of the property investors, and therefore have an effect on the demand for investment property. So we're bound to see a knock on effect on house prices, but also on availability of rental property. Prices for FTBs might become cheaper, but rent will most likely rise. When mortgages are not exactly readily available there may be unwanted or more complex outcomes than might seem obvious.

As has been seen before in this country, tinkering with the property market without full examination & understandin of the possible outcomes is a dangerous game. But given this goverments ability, that is exactly what I expect to happen. In prinicple, I think the idea of taxing properties other than the primary property is a good idea. I have no doubt that the cute investors will find loopholes in the legislation so that in reality only the people with second home as a holiday house or city pad will end up paying the tax.

In short, this needs a lot of further thought by clever people (so I'll opt out at this stage) before I give it a full thumbs up. I dont really have any issue with it hitting the property investor per se, though having been so pro the investor I doubt FF will be that brave.


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## Mr DT

People who bought a second house for investment purposes should have done so for the long term, therefore they have taken on the risk that over time things will change. There could be positive changes (lots of that in the last 15 years) or negative changes (lots of that for the next XX years?)

Its "unfair" that the exchange rate has moved the wrong way by 30% if you are exporting to the UK...... but if you are to survive....you adapt.

Surely, If tax goes up from €200 to €600 pa and people can't afford it then they were sailing too close to the wind anyway.


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## kkelliher

SteveW9 said:


> I think its a great idea to tax 2nd properties, people who bought 2nd houses for investment purposes using the equity on their orginal house, priced first time buyers(who were only trying to get somewhere to live) out of the market.
> Their greed is partly responsible for the mess we are in now so its time for some payback. Its great that eventually(probably in about a years time becuase people are still asking insnae prices for crap houses) that a 1st time buyer may actually be able to afford somewhere decent to live.




I would more than welcome your backup for these statements as this is exactly the reason we are all in the sh*t.

Buying a second home is no more different that investing in shares, investing in a business, or any other investment. 

To say "its time for payback" is the most rediculous statement to make in a time like we are now in. 

I can also all but guarantee that in some way you have received some benifit from the property boom that we had for the last ten years as it underpinned our economy. Its not the 100% fault of those who invested money in property for our current circumstance and you cannot like in every other instance put all "second home Buyers" into the same braket as "property speculators".

Prices increased because of demand. Demand from investors (as there was a huge demand on rents from those who DID NOT WANT TO BUY as much as those who did). A high % of the foreign workers in this country have no asperations to own a property in Ireland as they are simply here to earn money to one day go home, like the Irish have also done in our history.

Payback as you put it will not solve any of our problems and in fact will make it worse as most of those who have a second property only are ordinary people investing for the long term. They are also loosing their jobs like everyone else.


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## Clohass

Can I point out that not everyone who owns a second home is a necessarily in it for profit(rental) or pleasure(Holiday).

I purchased a house which my elderly mother lives in (rent free) and which it costs me money to provide and maintain. 

I'm obviously not looking forward to paying a tax on this property on top of what it already costs me. 

I'd ask some of the the more extreme posters to bear things like this in mind rather than seeing 'fat cat' and 'raging capitalist' every time there is a mention of someone owning more than one property.


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## kkelliher

Mr DT said:


> People who bought a second house for investment purposes should have done so for the long term, therefore they have taken on the risk that over time things will change. There could be positive changes (lots of that in the last 15 years) or negative changes (lots of that for the next XX years?)
> 
> Its "unfair" that the exchange rate has moved the wrong way by 30% if you are exporting to the UK...... but if you are to survive....you adapt.
> 
> Surely, If tax goes up from €200 to €600 pa and people can't afford it then they were sailing too close to the wind anyway.




My main objection which is not been clearly understood is that those who purchased 2nd properties in ireland have added greatly to the economy already by paying stamp duty on the purchase, VAT on the new build, and income tax on the rental stream.

There needs to be a clear understanding of the difference between investment and speculator.

Are we now going to put a new tax on those who invest in shares? all they currently pay is stamp duty just like on property. There has been massive evidence of speculators in shares been responsible for some serious problems in that industry which has caused alot more problems than the property one.

Risk is in everything you do, you cant just isolate 2nd properties to take up the slack on everything else.


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## kkelliher

Clohass said:


> Can I point out that not everyone who owns a second home is a necessarily in it for profit(rental) or pleasure(Holiday).
> 
> I purchased a house which my elderly mother lives in (rent free) and which it costs me money to provide and maintain.
> 
> I'm obviously not looking forward to paying a tax on this property on top of what it already costs me.
> 
> I'd ask some of the the more extreme posters to bear things like this in mind rather than seeing 'fat cat' and 'raging capitalist' every time there is a mention of someone owning more than one property.



100% agree and this is what people need to realsie


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## SteveW9

Youre in the minority so most greedy people did it for profit and pleasure


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## David_Dublin

SteveW9 said:


> Youre in the minority so most greedy people did it for profit and pleasure



Doing something for profit does not make you greedy. 

If our government has failed to manage the property bubble with the many tools it might have used in the last 10 years or so, the fact that people have taken advantage of that should not be held against them.

The motivation for suggested changes to legislation should not be payback. If there is need for additional revenue into the government then all possibilities should be explored. I imagine that many european countries have property tax that is not limited to the second properties, but is also applied to primary residence.

Personally, I have no problem seeing the speculators taking a hit if this tax was introduced. I appreciate that they have contributed in Stamp and Tax on income and VAT etc, but I am still uneasy that by doing very little a lot of people made a lot of money. That's capitalism I suppose, but it goes both ways, now the risks of their ventures may come back to them


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## rabbit

David_Dublin said:


> by doing very little a lot of people made a lot of money.


 
A lot of people have lost a lot of ( borrowed ) money as well as their own money.  People were encouraged by the govt among others to invest in property ( section 23, section 27 etc ) and created a lot of construction jobs in the country, and paid a lot of tax in the process.  Now many ( in parts of the country ) of these buildings remain empty and in negative equity.   Its not good enough for the govt to kick these "investors" while they are down.    Only a third of the dwellings in Leitrim are occupied for example.    Consider those who bought in 2005 and 2006 and who have found the whole govt inspired thing a scam and a liability rather than an asset to be taxed.   People are committing suicide over our government created problems.


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## z106

David_Dublin said:


> Doing something for profit does not make you greedy.


 
Exactly.

As some other poster said when some people see someone with more than one property they automatically think greedy capitalism. 

Why shouldn't someone try to gain further income from entering the property business?
WHy does this particular business have the bad name above any other business?
Would the same stigma be attached to someone who set up a second business selling hot dogs to supplement their income?

Landlords do provide a service you know.
They do rent out these propeties after all.

What is the alternative?
To only allow people buy a home ?

Where do renters live in that case?
There seems to be a lot ranting that is not properly thought through directed towards people who are in the property game.

It's just another business.

And yes- family home prices did rise more due to teh boom.
Howebver - that was primarily due to cheap credit as opposed to speculators in my book.
(i.e. if investors were hypothetically banned prices would still have risen significantly)
In its height I think 25% of tehmarket was made up of investors/speculators.
Presumably most of these properties were rented out at any one time- therefore they were needed as they provided a service 
Speculators contributed to the rest. As to how significant an impact is hard to judge but had only speculators been banned we would still be in this mess we are in.

The question is why is the property business singled out above other business?
Property investors have paid significant amounts of taxes already through stamp duty and vat etc. Presumably far more than people that have not entered the property game.

A lot of landlords are now running their business at a loss due to the downturn.
So in a nutshell - my point is surely profit making businesses should be taxed before loss making businesses.

Also - someone esle said that a change in tax laws anyone takes in getting into business.
I'liek to know how they felt if the business they are involved in was singled out for a supplemntary tax.
I'm presuming they woud not use that line as quickly in that scenario.


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## Thomas22

David_Dublin said:


> It'll certainly affect the margins of the property investors, and therefore have an effect on the demand for investment property. So we're bound to see a knock on effect on house prices, but also on availability of rental property. Prices for FTBs might become cheaper, but rent will most likely rise. When mortgages are not exactly readily available there may be unwanted or more complex outcomes than might seem obvious.
> 
> As has been seen before in this country, tinkering with the property market without full examination & understandin of the possible outcomes is a dangerous game. But given this goverments ability, that is exactly what I expect to happen. In prinicple, I think the idea of taxing properties other than the primary property is a good idea. I have no doubt that the cute investors will find loopholes in the legislation so that in reality only the people with second home as a holiday house or city pad will end up paying the tax.
> 
> In short, this needs a lot of further thought by clever people (so I'll opt out at this stage) before I give it a full thumbs up. I dont really have any issue with it hitting the property investor per se, though having been so pro the investor I doubt FF will be that brave.


 
The over supply of properties across Ireland will prevent most landlords from increasing the rent. In all likelihood they will just have to absorb the additional costs.


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## David_Dublin

Thomas22 said:


> The over supply of properties across Ireland will prevent most landlords from increasing the rent. In all likelihood they will just have to absorb the additional costs.


If they are in a position to absorb the cost, yes. With rents already declining there is a point at which that wiill not be an option, in which case they may be forced to sell. 

Interest rate movement will also prove a factor as to the effect. From what I read, many of these investment properties have been leveraged on interest free 100% mortgages. When the 3 or 5 years of the interest free term is up who knows what banks will do, it is up to them if they continue to offer the facility. If rates go up in the next 18 months you may find a flood of previously rented accommodation, so less units on the market, higher rents resulting. There are so many scenarious, ask Peter Bacon.


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## kkelliher

SteveW9 said:


> Youre in the minority so most greedy people did it for profit and pleasure




Minority - I dont think so, and again how do you back this up.

Bid Difference in those who buy for long term, rent them out, maintain them, pay taxes on them against those who buy and sell within a few months to a year.

The ability or want for someone to make money is not greed.


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## SteveW9

kkelliher said:


> I would more than welcome your backup for these statements as this is exactly the reason we are all in the sh*t.
> 
> I can also all but guarantee that in some way you have received some benifit from the property boom that we had for the last ten years as it underpinned our economy.


 
I received no benifit from the property boom whatsoever. 
I work in IT and I have rented for the last 6 years and will continue to do so until an average house is 3 times average salary. 

and i never said it was 100% second home buyers fault please learn to read.


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## kkelliher

SteveW9 said:


> I received no benifit from the property boom whatsoever.



No way thats true. I can guarantee weather you know or not but your IT job is linked in some manner to the boom in Ireland which was spurred on by the Property Industry.

[/quote] I have rented for the last 6 years and will continue to do so until an average house is 3 times average salary. [/quote]

No disrespect but I cannot believe someone in IT has been unable to buy a house for over 6 years. I know single nurses and apprentices who have purchased their own houses. You could easily have gotten a mortgage (which was the problem) over than period.

[/quote]and i never said it was 100% second home buyers fault please learn to read.[/quote]

No problem reading, and no problem understanding your line 

[/quote]Their greed is partly responsible for the mess we are in now so its time for some payback[/quote]

Can you back this up "responsible for the mess we are in now"?


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## SteveW9

kkelliher said:


> No way thats true. I can guarantee weather you know or not but your IT job is linked in some manner to the boom in Ireland which was spurred on by the Property Industry.


 
I have a job because a Multinational software company came to Ireland in 1994 because of low coporation tax and an educated workforce believe me it has nothing to do with with the property boom. 



kkelliher said:


> No disrespect but I cannot believe someone in IT has been unable to buy a house for over 6 years. I know single nurses and apprentices who have purchased their own houses. You could easily have gotten a mortgage (which was the problem) over than period.


 
Yes I could could have easily got a mortgage but were not stupid enough to want to pay 500k for a 2 bed appartment and I also did some research on the market even a child will tell you bubbles burst. 



kkelliher said:


> Their greed is partly responsible for the mess we are in now so its time for some payback. Can you back this up "responsible for the mess we are in now"?


 
People who bought for investment purposes kept prices inflated and misfourtunate people WHO HAD TO BUY A HOUSE TO LIVE IN from 2005 have been sucker punched with really bad negative equity today.


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## kkelliher

SteveW9 said:


> I work in IT and I have rented for the last 6 years and will continue to do so until an average house is 3 times average salary.



Average industrial wage in ireland is circa €34k x 3 = €102k for an average house is never going to happen.

You clearly opted to rent and are not forced to as even by your own words you could have easily gotten a mortgage. 

You opted to sit on the fence for 6 years whereas others didnt. This does not make them greedy for risking on 1, 2 or 10 houses. They will have to repay the mortgage either way. They have added to the economy and to the state coffers.

Why should they have to make an additional contribution to the economy over you who has not added in the same way.

agree to disagree with you on this as our points are known


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## brigade

SteveW9 said:


> People who bought for investment purposes kept prices inflated and misfourtunate people WHO HAD TO BUY A HOUSE TO LIVE IN from 2005 have been sucker punched with really bad negative equity today.


 
Your view of this is way to simplistic! 
The banks had a big impact on this when they decided to lend multiples of an individuals salary. When I first bought a house it was 2.5 times the main earner a 1 times the lower earner. That was the amount I could borrow and therefore pay for a house. When the banks loosened their lending criteria this gave individuals more money to spend on a house which also led to developers pushing up prices.


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## SteveW9

kkelliher said:


> Average industrial wage in ireland is circa €34k x 3 = €102k for an average house is never going to happen.


wait and see my friend 



kkelliher said:


> You clearly opted to rent and are not forced to as even by your own words you could have easily gotten a mortgage.
> You opted to sit on the fence for 6 years whereas others didnt. This does not make them greedy for risking on 1, 2 or 10 houses. They will have to repay the mortgage either way. They have added to the economy and to the state coffers.
> Why should they have to make an additional contribution to the economy over you who has not added in the same way


I "sat on the fence and opted out" because I didnt think houses in rathmines should be more expensive than manahattan. 
I added to the economy by paying over inflated rent to somebody who I now feel should pay tax on that property.
The landlord made a big profit from rent so excuse me for not caring if he gets taxed now.


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## MrMan

SteveW9 said:


> I think its a great idea to tax 2nd properties, people who bought 2nd houses for investment purposes using the equity on their orginal house, priced first time buyers(who were only trying to get somewhere to live) out of the market.
> Their greed is partly responsible for the mess we are in now so its time for some payback. Its great that eventually(probably in about a years time becuase people are still asking insnae prices for crap houses) that a 1st time buyer may actually be able to afford somewhere decent to live.


 
Alot of people will have bought the 2nd home as their pension, which they saw as a safety net for retirement. Your view on this topic is quite simplistic and doesn't seem to allow for reason.


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## SteveW9

brigade said:


> Your view of this is way to simplistic!
> The banks had a big impact on this when they decided to lend multiples of an individuals salary. When I first bought a house it was 2.5 times the main earner a 1 times the lower earner. That was the amount I could borrow and therefore pay for a house. When the banks loosened their lending criteria this gave individuals more money to spend on a house which also led to developers pushing up prices.


 
I only said that people who bought investment properties were partly to blame obviously the bank and government should take more of the blame.


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## SteveW9

MrMan said:


> Alot of people will have bought the 2nd home as their pension, which they saw as a safety net for retirement. Your view on this topic is quite simplistic and doesn't seem to allow for reason.


 
I think there should be a few exceptions like the person above who bought a house for an eldery parent. People who bought for their pension because of the tax break.


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## kkelliher

SteveW9 said:


> wait and see my friend
> 
> 
> I "sat on the fence and opted" because I didnt think houses in rathmines should be more expensive than manahattan.
> I added to the economy by paying over inflated rent to somebody who I now feel should pay tax on that property.
> The landlord made a big profit from rent so excuse me for not caring if he gets taxed now.




OK as someone who knows how much it costs to build €102 for a 3 bed house in dublin is never going to happen no matter what else happens. If it does the country will be bankrupt and so will everyon in it.

The landlord has paid tax on the property. He paid stamp duty when he bought the property and he paid income tax on the money you paid him. Why should he pay anymore. Should you pay more for Shares?, Business ?

You dont have an arguement, you just have your opinion, thats not based on any facts.


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## kkelliher

SteveW9 said:


> I think there should be a few exceptions like the person above who bought a house for an eldery parent. People who bought for their pension because of the tax break.




You will find that this will cover the majority not the minority


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## SteveW9

kkelliher said:


> OK as someone who knows how much it costs to build €102 for a 3 bed house in dublin is never going to happen no matter what else happens. If it does the country will be bankrupt and so will everyon in it.


Who said anything about building a house. 
There are currently 15 - 3 bed houses on Daft for less than 180k, there is nothing whatsoever to suggest that these prices wont continue to fall.  So 102k for a 3 bed may not be as mad as you think. 

http://www.daft.ie/searchsale.daft?...ale&s[furn]=&s[refreshmap]=1&search_type=sale



kkelliher said:


> You dont have an arguement, you just have your opinion, thats not based on any facts.


I thought the whole idea of a forum was to allow people to express their opinions.


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## Mpsox

kkelliher said:


> OK as someone who knows how much it costs to build €102 for a 3 bed house in dublin is never going to happen no matter what else happens. If it does the country will be bankrupt and so will everyon in it.
> 
> The landlord has paid tax on the property. He paid stamp duty when he bought the property and he paid income tax on the money you paid him. Why should he pay anymore. Should you pay more for Shares?, Business ?
> 
> You dont have an arguement, you just have your opinion, thats not based on any facts.


 
I have one house, it's not in Dublin and I have no connection with the building trade, please explain to me how I will be bankrupt if the price of a 3 bed semi in Dublin falls to €102k. Please share the facts on this one, not just your opinion

Cost of running my business has gone up via the increase in VAT.  why shouldn't the cost of being a landlord go up as well?


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## kkelliher

SteveW9 said:


> Who said anything about building a house.
> There are currently 15 - 3 bed houses on Daft for less than 180k, there is nothing whatsoever to suggest that these prices wont continue to fall.  So 102k for a 3 bed may not be as mad as you think.
> 
> http://www.daft.ie/searchsale.daft?...ale&s[furn]=&s[refreshmap]=1&search_type=sale
> 
> 
> I thought the whole idea of a forum was to allow people to express their opinions.




Nice to see your comparing apples with apples. We have gone from Rathmines for €599k to Tallaght for €180k. I'll say no more. 

Everyone has the right to their opinion. And as I said previously agree to disagree


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## SteveW9

kkelliher said:


> Nice to see your comparing apples with apples. We have gone from Rathmines for €599k to Tallaght for €180k. I'll say no more.
> 
> Everyone has the right to their opinion. And as I said previously agree to disagree


 
Practice what you preach buddy I never said anything about Rathmines for €599k, i said i didnt want to pay 500k for 2 bed appartment. 

Fact is average house prices are falling dramatically.


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## kkelliher

Mpsox said:


> I have one house, it's not in Dublin and I have no connection with the building trade, please explain to me how I will be bankrupt if the price of a 3 bed semi in Dublin falls to €102k. Please share the facts on this one, not just your opinion
> 
> Cost of running my business has gone up via the increase in VAT.  why shouldn't the cost of being a landlord go up as well?



Cost of VAt effects everybody including landlords. Maintenance, advertising, legal fees, outlays, etc Unless a landlord is VAT registered he cant claim the VAT back. Most businesses should be able.

We were talking about a person who is waiting until the average cost of a house in dublin falls to 3 times average salary which would be circa €102k. 

For the average in dublin to fall to that level (remembering that outside dublin the fall would be larger) the country / banks will be in a similar position to the sub-prime debt levels in America (how many have gone under or bailed out by US government to hugh amounts) and our Banks / Government would not be in a position to carry that level of debt. This is an economical fact.

I did not mean it to read that we will all personally be bankrupt direclty but if that did happen there would be very many who would as the debt level would be off the wall in comparison to what wage levels would be if this was to happen


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## kkelliher

SteveW9 said:


> Practice what you preach buddy I never said anything about Rathmines for €599k, i said i didnt want to pay 500k for 2 bed appartment.
> 
> Fact is average house prices are falling dramatically.



Apologies, but please find me an apartment for 180K in the same place as the one for 500K.

Honestly lets leave it at that. I understand your point, you understand mine


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## SteveW9

Here is one for 225k 
http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[a_id]=ga3&s[mnp]=&s[mxp]=250000&s[bd_no]=&s[search_type]=sale&s[furn]=&s[refreshmap]=1&limit=10&search_type=sale&id=426254


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## kkelliher

SteveW9 said:


> Here is one for 225k
> http://www.daft.ie/searchsale.daft?search=1&s[cc_id]=ct1&s[a_id]=ga3&s[mnp]=&s[mxp]=250000&s[bd_no]=&s[search_type]=sale&s[furn]=&s[refreshmap]=1&limit=10&search_type=sale&id=426254




Nothing there for €225k ? Is the link right?


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## SteveW9

Sorry link now here 
http://www.daft.ie/searchsale.daft?id=426254


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## kkelliher

it dosnt want to be found lol


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## SteveW9

should work now


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## kkelliher

actually nice apartment, but add 20k for 2 bedroom


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## murphaph

As someone who will be subject to this proposed tax I must say I am ready and willing to pay it. I'm not happy about it of course but I understand that we ALL must do our bit and in general, people who own more than one property are likely to be more wealthy than people who do not. I would expect special exemptions for people who've bought property for their parents to live in etc.etc.

HOWEVER! I expect the government to reel in its own spending first and foremost by implementing immediate pay cuts across the public sector and followed up by a detailed analysis of who does what with redundancies for wasters being the norm. The 'job for life' mentality must be a thing of the past. Everyone must take their part of the pain so our country may recover.


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## Robin Banks

Niallers said:


> If a property tax is brought in it will just raise rents. It's very simple.


 
Not with 21,000 properties to rent on Daft it isn't. There is massive oversupply of rental property, the country is in the grips of a property bubble induced recession, emigration & unemployment are rising.



> The landlord won't be at a loss


 
Yeah, they'll all just jack up the rent on their empty BTL shoeboxes. That'll get them rented for sure.

It's a race to the bottom now lads, and it's just getting started.


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## Bronte

kkelliher said:


> actually nice apartment, but add 20k for 2 bedroom


 Can you not acknowledge that he has proved his point.  There was in the not so distant past a time in Ireland when you could purchase houses for less than the cost of site plus building cost.  As in the valuation was basically = to the rebuild costs.  

As a landlord another tax is just that and 200€ is not a lot to be honest.  This is going to be one of those dreaded taxes, hard to implement, hated, too many exceptions, difficult to get people to pay it.  It's just rates by another name.  It would be far simplier if they just increased the PRTB fee that way people who earn money on their property would be the one's paying the tax.


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## kkelliher

Bronte said:


> Can you not acknowledge that he has proved his point.  There was in the not so distant past a time in Ireland when you could purchase houses for less than the cost of site plus building cost.  As in the valuation was basically = to the rebuild costs.
> 
> As a landlord another tax is just that and 200€ is not a lot to be honest.  This is going to be one of those dreaded taxes, hard to implement, hated, too many exceptions, difficult to get people to pay it.  It's just rates by another name.  It would be far simplier if they just increased the PRTB fee that way people who earn money on their property would be the one's paying the tax.




He hasnt proved his point, as its a wait and see? I still dont believe you will buy a 3 bed house in Dublin for €102k. Lets see.

I agree with your other points. I would have taught a fair way would be to introduce a licence for those who wish to rent which would have to be renewed every year, Like a TV licence. That way those who own second properties with family etc etc in them would not be charged.


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## Thomas22

MrMan said:


> Alot of people will have bought the 2nd home as their pension, which they saw as a safety net for retirement. Your view on this topic is quite simplistic and doesn't seem to allow for reason.




Buying property for a pension will turn out to have been a very poor investment. 

Although I feel sorry for these people buying property for a pension was never a good idea. It might have worst in the last few years but it goes against the most important aspect of long-term investing, diversification.

Th sooner property turns back into a place of shelter rather than a speculative investment vehicle the better for the country. When prices fall another 50%-60% the myth of housing as an investment will be well and truly over.


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## MrMan

Thomas22 said:


> Buying property for a pension will turn out to have been a very poor investment.
> 
> Although I feel sorry for these people buying property for a pension was never a good idea. It might have worst in the last few years but it goes against the most important aspect of long-term investing, diversification.
> 
> Th sooner property turns back into a place of shelter rather than a speculative investment vehicle the better for the country. When prices fall another 50%-60% the myth of housing as an investment will be well and truly over.


 
I agree that you shouldn't put all of your eggs in one basket, but I don't think it is true to suggest that property investment is a myth. People have put faith in others managing their pensions for them and have been left with nothing so there is no sure way of managing for the future. It also depends on when people bought and when they plan on cashing in as to ascertain whether it has been a poor investment.


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## rabbit

qwertyuiop said:


> MAny people these days are at a loss due to taking on a second property.
> Obviously like any business that is the risk they took on and that's the way the cookie crumbles and all that.
> 
> However I certainly don't see why they should be subjected to a further property tax while their business runs at a loss.
> 
> Why not target profit making businesses instead?


 
Good point.   Some people bought apartments and houses in parts of the country where there are now whole estates of empty dwellings.  They paid stamp duty on these, and the govt got a lot of vat and income tax etc in their construction.  People were encouraged to invest in section 23 / 27 / 50 property etc.   Now people who bought in 04 / 05 / 06 are in negative equity, often with empty apartments ( 2/3 of Leitrim buildings are unoccupied ).  This tax if its introduced will be very unfair and the final nail in the coffin for many.   It will make investor property even harder to sell, if its not hard enough / impossible  already.We should be encouraging property transactions...that is where the govt will get stamp duty + help keep solicitors + auctioneers with some income etc ( I am not a solicitor or auctioneer , but I do not wish to see unemployment rising more ).


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## kkelliher

The main reason they are looking at it is to give them a more steady income stream as opposed to stamp duty. I cannot see how this will help as it will over a period of time dilute the investor market away.

A general all property tax (which would not be popular) is the only way they will get what they are looking for. 

As a second property owner I in principal have no problem with a tax like the €200 a year. I do have a major problem with the proposed 1% of value per year that some economists are outlining.


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## Bronte

Thomas22 said:


> Buying property for a pension will turn out to have been a very poor investment.
> 
> Although I feel sorry for these people buying property for a pension was never a good idea.


 What would have been better than property for a pension?


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## Mr DT

A balance portfolio of Cash, Bonds, Equity, Property


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## rabbit

kkelliher said:


> I do have a major problem with the proposed 1% of value per year that some economists are outlining.


 If its 200 now it will be 2000 next year, and 5000 the year after.  Property is already taxed enough ( stamp duty is very high, as is vat etc, income tax etc ) .  If they wanted to tax it more , that should have been done in 02, 03, 04 etc, instead of fooling the public with tax incentives etc ( section 23/27/50 ).  The govt simply cannot change the level of the playing pitch now.


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## Jister

SteveW9 said:


> I  I work in IT and I have rented for the last 6 years and will continue to do so until *an average house is 3 times average salary. *


 
I think thats a very accurate prediction.

I remember working and building my house in the late 1990's and every year the tax bands were widened, I was getting 4 and 5% pay rises, the top and bottom tax rate were coming down by 1 or 2%.

The value of my home rocketed, maybe "worth" 450K at the peak of the idiotic price cycle.

Now we are beginning to see the begining of the deflation, tax will go up by 1 or 2% a year for the next few years, wages are being cut all over the place etc.

I reckon my house is worth about €250K, specuvestors hate me saying this, its the truth though.

The exact opposite to what happened in the late 1990's is going on now, hold tough and average prices will be 3 x average salary in a few years.


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## Thomas22

rabbit said:


> If its 200 now it will be 2000 next year, and 5000 the year after.  Property is already taxed enough ( stamp duty is very high, as is vat etc, income tax etc ) .  If they wanted to tax it more , that should have been done in 02, 03, 04 etc, instead of fooling the public with tax incentives etc ( section 23/27/50 ).  The govt simply cannot change the level of the playing pitch now.



Of course they can. They are quickly running out of money and a property tax is an obvious way to fill the gap.


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## kkelliher

Jister said:


> I think thats a very accurate prediction.




Lets remember he said 3 times average salary therefore approx €102k and we were talking about a 3 bed semi in dublin.

Accurate......Only time can tell but very unlikely


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## Robin Banks

kkelliher said:


> Only time can tell but very unlikely


 
Yeah, that's probably what you'd have said about combined share price of AIB and BOI trading for less than €1, back in 2007 when they were selling for over €40.

Like I said, we're just gettin started on the property slide. Weeeeeeeeeeeeeee !!


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## Thomas22

kkelliher said:


> Lets remember he said 3 times average salary therefore approx €102k and we were talking about a 3 bed semi in dublin.
> 
> Accurate......Only time can tell but very unlikely




It only seems unlikely when you think the current prices are realistic. 4 times average salary is the long term average ratio of house prices to salary but we might just overshoot on the downside like we did on the upside.
3 or 4 times might sound crazy but it is likely to happen.


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## Importer

KKeliher, You have a few things to learn still about boom and bust markets, I fear.

102K for a three bed semi in a decent part of Dublin is looking more likely by the day. Who on earth would have believed AIB shares would touch 33 cents ?

You are also correct that the Irish Government is unlikely to be able to support the banks in a period of such turmoil, and that my friend is the most worrying thing of all.


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## minion

Importer said:


> KKeliher, You have a few things to learn still about boom and bust markets, I fear.
> 
> 102K for a three bed semi in a decent part of Dublin is looking more likely by the day. Who on earth would have believed AIB shares would touch 33 cents ?



I think you may be exaggerating a bit here.

If that happened i know a lot of people who could buy them outright for cash from their savings.

And if they even had half of that saved then they could pay the rest back to the bank for about €55 a week over 25 years.

Or even if someone borrowed the whole lot, it would cost them about €125 a week.

The dole would be enough pay for that.  Imagine 3 people on the dole taking a room each and sharing that mortgage.  What a life.


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## foghorn

kkelliher said:


> No way thats true. I can guarantee weather you know or not but your IT job is linked in some manner to the boom in Ireland which was spurred on by the Property Industry.


 
Feel free to explain the hand-waving vague "linked in some manner" and what relevance it has. 

You might as well say "Your IT job is linked in some manner to the high price of Dublin escorts".



> No disrespect but I cannot believe someone in IT has been unable to buy a house for over 6 years.


 
You seem to not understand the difference between "unable to" and "want to". I myself could have stretched to paying a considerable mortgage. However, when looking at historical trends in house prices, it seemed insane. I was right. And those who were wrong now want me to bail them out.


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## wheeler

SteveW9 said:


> Youre in the minority so most greedy people did it for profit and pleasure


 

Can you provide the statistics to back that up?

How many have bought second homes instead of taking out a pension?
How many have bought second homes for family members?

This is taxing the responsible amongst us. 

Making a sweeping statement like this doesn't help without backing it up.

Whether or not we are in a minority should not mean that the minority should therefore be ignored.


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## kkelliher

foghorn said:


> Feel free to explain the hand-waving vague "linked in some manner" and what relevance it has.
> 
> You might as well say "Your IT job is linked in some manner to the high price of Dublin escorts".



As has been discussed in the media at length by nearly every economist the Irish property industry and the subsequent vast amounts of tax money generated by it for the governement allowed them to put alot of it back into the IDA to gain jobs via foreign investment programmes ad incentives 

Somehow I dont think the "dublin escorts" have had the same effect




foghorn said:


> You seem to not understand the difference between "unable to" and "want to". I myself could have stretched to paying a considerable mortgage. However, when looking at historical trends in house prices, it seemed insane. I was right. And those who were wrong now want me to bail them out.



I simply dont understand your point in the context of this discussion. Just because you didnt want to or were unable to purchase a property does not give you or anyone else the right to request that second home owners bail out the country. How have you bailed them out? I own a second home and you certianly will not be bailing me out in any way.

You point in relation to "historical trends" has no bearing as wages, inflation, the move to the Euro and many other reasons have made "hostorical trends" redundant as our system changed to a totally new system when we joined the Euro and we dont have the opportunity to instigate the fiscal policies that resulted in the trends of the past.


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## foghorn

kkelliher said:


> As has been discussed in the media at length by nearly every economist the Irish property industry and the subsequent vast amounts of tax money generated by it for the governement allowed them to put alot of it back into the IDA to gain jobs via foreign investment programmes ad incentives


 
I've seen some rewrites of history, but never someone claiming that it was the Irish property industry that created the boom in the first place. So all those Canny McSavvys and developers who were merely moving money from the younger generation to the older generation were actually selflessly _generating_ wealth? Companies like Iona, founded in 1991, well before any property bubble, and Dell which came to Ireland in 1990, depended on a property bubble that came several years later?

I think you may have your cart and horse (house?) mixed up. 

Oh, and please quote these economists you base your arguments on, just to see how right these economists were.



> I simply dont understand your point in the context of this discussion. Just because you didnt want to or were unable to purchase a property does not give you or anyone else the right to request that second home owners bail out the country. How have you bailed them out? I own a second home and you certianly will not be bailing me out in any way.


 
If you are not someone who wants mortgage forgiveness, then fine, at least you're being consistent.



> the move to the Euro and many other reasons have made "hostorical trends" redundant


 
Ireland is a new paradigm.

We are not like other countries.

Yes, indeed, I remember all those mantras. It's rather strange to meet someone who still believes them; like stumbling across a WW2 Japanese 
soldier on Bull Island.


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## kkelliher

foghorn said:


> I've seen some rewrites of history, but never someone claiming that it was the Irish property industry that created the boom in the first place. So all those Canny McSavvys and developers who were merely moving money from the younger generation to the older generation were actually selflessly _generating_ wealth? Companies like Iona, founded in 1991, well before any property bubble, and Dell which came to Ireland in 1990, depended on a property bubble that came several years later?
> 
> I think you may have your cart and horse (house?) mixed up.
> 
> Oh, and please quote these economists you base your arguments on, just to see how right these economists were.
> 
> 
> 
> If you are not someone who wants mortgage forgiveness, then fine, at least you're being consistent.
> 
> 
> 
> Ireland is a new paradigm.
> 
> We are not like other countries.
> 
> Yes, indeed, I remember all those mantras. It's rather strange to meet someone who still believes them; like stumbling across a WW2 Japanese
> soldier on Bull Island.




Foghorn is a very good nickname


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## Guest116

minion said:


> I think you may be exaggerating a bit here.
> 
> If that happened i know a lot of people who could buy them outright for cash from their savings.
> 
> And if they even had half of that saved then they could pay the rest back to the bank for about €55 a week over 25 years.
> 
> Or even if someone borrowed the whole lot, it would cost them about €125 a week.
> 
> The dole would be enough pay for that. Imagine 3 people on the dole taking a room each and sharing that mortgage. What a life.


 
Yeah I agree, if a 3 bed semi in a good part of dublin goes to 102k then I will buy another one and rent it. In fact I'd buy a few - if I had the money


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## Wexfordguy

murphaph said:


> HOWEVER! I expect the government to reel in its own spending first and foremost by implementing immediate pay cuts across the public sector and followed up by a detailed analysis of who does what with redundancies for wasters being the norm. The 'job for life' mentality must be a thing of the past. Everyone must take their part of the pain so our country may recover.


 
Why the public sector?
Did the public sector force the prices of properties to ridiculous heights as its employees attempted to get richer at the expense of first time buyeres?
No.

It was private sector individuals,consortiums and other vested interests that were quite happy to inflate the housing markets to suit thier own selfish ends.

When times were good the public sector got pay rises in line with inflation,now times are bad the greedy leeches respinsible for this mess want them hit in the pocket to defray thier own costs.
Typical.


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## MrMan

Wexfordguy said:


> Why the public sector?
> Did the public sector force the prices of properties to ridiculous heights as its employees attempted to get richer at the expense of first time buyeres?
> No.
> 
> It was private sector individuals,consortiums and other vested interests that were quite happy to inflate the housing markets to suit thier own selfish ends.
> 
> When times were good the public sector got pay rises in line with inflation,now times are bad the greedy leeches respinsible for this mess want them hit in the pocket to defray thier own costs.
> Typical.


 
I think everyone needs a bit of balance at this stage, no one group of people were entirely responsible, we all will have to bear the brunt of any recovery. It is in nobodys interest to sit back and point fingers while it all falls down around our ears. What use is being right when you will end up in the same state as those that are wrong?


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## minion

One of the events that happens in a recession is Finger pointing by everyone.

This is then encouraged by government and employers groups so that they can put their collective hands in the pockets of both public and private sectors.


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## Jister

minion said:


> I think you may be exaggerating a bit here.
> 
> If that happened i know a lot of people who could buy them outright for cash from their savings. Even if its impossible to rent them and there is a tax of, say,€1000 +stamp duty and legal fees etc.?
> 
> And if they even had half of that saved then they could pay the rest back to the bank for about €55 a week over 25 years. What bank can spare money for speculators at the moment, thats what got us in trouble in the first place
> 
> Or even if someone borrowed the whole lot, it would cost them about €125 a week. are banks giving out 100% mortgages for BTL again?
> 
> The dole would be enough pay for that. Imagine 3 people on the dole taking a room each and sharing that mortgage. What a life.Soon there will be 500000 people on the dole, there is no way the government will be able to hand out €200+ per week to that many people, the dole will be slashed bit by bit


 
100K in Dublin is a bit Ambitious but €150K for a 3 bed semi in a reasonable area outside the M50 is not far away, I'd say we will see that before the year is out.


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## Guest116

Jister said:


> 100K in Dublin is a bit Ambitious but €150K for a 3 bed semi in a reasonable area outside the M50 is not far away, I'd say we will see that before the year is out.


 
Of course we will have another decrease this year in prices, but I dont think you will see a decrease by over 50%! Do you really think so?


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## Jister

aristotle25 said:


> Of course we will have another decrease this year in prices, but I dont think you will see a decrease by over 50%! Do you really think so?


 
Why not - because "Ireland is different"? 

I would rule nothing out at this atage. The real capitulation, when banks start offloading _en masse_ is not far off now.


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## Guest116

Jister said:


> Why not - because "Ireland is different"?
> 
> I would rule nothing out at this atage. The real capitulation, when banks start offloading _en masse_ is not far off now.


 
If alone because Ireland is NOT different, I dont think such a decrease has ever been seen over 12 months on the back of serious decreases just before it.

Honestly askaboutmoney is becoming a place full of hyped up ****!


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## minion

Jister said:


> 100K in Dublin is a bit Ambitious but €150K for a 3 bed semi in a reasonable area outside the M50 is not far away, I'd say we will see that before the year is out.



Read what you're writing.

And do a bit of research before you come out with stupid answers.

How much is stamp duty on 100k?  How much stamp duty for FTBs.

Do you really think a bank wont lend 50k to someone who puts up 50k themselves.

So a bank gives a 90% mortgage and the person has to pay another tenner a week.

The bit about people on the dole was an obvious joke.  Just to highlight you're exaggeration in your previous posts.

Time to get a grip on reality here.

Just 1 question for you.

Are you being serious when you say €150K for a 3 bed semi in a reasonable area outside the M50 is not far away.

Surely you arent.

Do some sums man.


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## Jister

minion said:


> Are you being serious when you say €150K for a 3 bed semi in a reasonable area outside the M50 is not far away.


 
The market sets the price not you or me. There are no buyers, there are many, many sellers.


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## minion

Jister said:


> The market sets the price not you or me. There are no buyers, there are many, many sellers.




Yes, i know the market sets the price.  Thats not what im arguing.

Come on admit it.  You are pulling numbers out of your a*se without even thinking about them.  This much is obvious


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## gm88

Regarding the €200 second property tax, we (4 children) have inherited equal shares in the family home.  Property on market since last summer with not a single bid.  

Are each of the four of us liable for €200 each or €50 each since we have no sale yet?


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## Lialus

In theroy I am in favour of a property tax (with regard to ablity to pay) rather than on a sale (A tax based on sale value , impeeds the market , reduces personal flexiblity and increases long term debt of individuals) while a properly implemented property tax helps to stablise a market.

To introduce a tax now is not a fair time to introduce one. Many people made a decision based to purchase based on all material facts , including the absence of property tax. 
( I do not own a second property or even a first )
In these abnormal circumstances implementing the €200 per annum tax for second homes is effectivly a trap as many people are unable to sell a second property in order to reduce tax liablity as they would probably not be able to offset the sale price against the debt attached to the property. However €4 per week is not particularly onerous for most 2 property owners. 
Implementing a property tax generally would provide greater unfairness , as we all know many people are in a negative equity suitation they shall not be able to adjust there circumstances to reduce there tax liablity by selecting an alternative property as the proceeds from the sale shall not cover the costs of changing. 

If we were to reduce or abolish Stamp Duty in order to allow for the implemetation of a property tax , this would further exercasabate the problem, as the costs of adjusting your circumstances to your means would be prohibitive. Futher trapping people to living in there previous property decision , we would not get the benifit of a property tax ( i.e. freer markets ). 

To get some benifit , we need to be able to allow an offset of the Stamp Duty paid , against Property Tax , but not against it all. This offset should disappear with first sale , or in a defined period ( prehaps 5 years ).

However , Stamp duty should be reduced drastically , and property tax introduced as soon as the circumstances allow.


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