# "Homeowners to get help" Eamon Ryan



## Brendan Burgess (1 Feb 2010)

[broken link removed]



> Minister for Communications Eamon Ryan has announced that the Government is committed to helping homeowners struggling with mortgage payments. However, the Department of Finance has insisted that the Cabinet has not considered proposals on the matter to date.
> 
> 
> Mr Ryan said yesterday that the Government is considering introducing a range of measures before the summer to assist homeowners struggling to pay their mortgages.
> ...


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## onq (1 Feb 2010)

Legislation should be brought in to make the lending institutions pay for their profligate selling of money.

In this case, no mortgage payments to be sought until the economy recovers AND unemployment falls by a minimum amount, say 20% of the current figure.
That will leave people money to live on if their partner or they have lost work and it'll help the economy get back on track by instantly improving liquidity.
Better still, it will take the stress away for a while to stop families tearing themselves apart as we've seen in recent postson AAM.

And finally it'll give a good  boot up the behind to those lending institutions holding back the recovery by not lending money.
WIthout income from mortgages to pro them up, they'll have to lend ot businesses to make their money.

The way things stand all we're doing is propping up failed institutions so that people with deposits or bondholders don't get wiped out.
The people who bought into the property-owning culture are seeing their life's desicisons erased and their investments wiped out
This lays the ground for a whole generation of alienation and social upheaval and some UCD Professor writing books on it.
I think the banks have had all the kid gloves they need - time to help pay for what they did and help Ireland Inc recover.

If the Average Mortgage is €12 k a year [guessing] and there are 500,000 mortgate holders [guessing again], that's 6 Billion a year.
Lots of pain to spread around to all the institutions who have been bailed out.
This isn't giving people money, its just keeping it in their pockets.
With money being spent instead of sucked up by institutions.
Money being spent = economy recovering.
Am I missing something?

ONQ.


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## Latrade (1 Feb 2010)

This has sent my scepticism radar to tipping point. It smells like FF have thrown the Greens a bone to assist in upping their poll numbers.

However, there's little doubt something is needed and based upon some of the posts on here, we cannot rely on the voluntary aspects of the banks engaging with those struggling with debts and finding a more reasonable outcome. Although Judges do seem sympathetic to debtors when it gets to court, the banks seem determined to get it to court. One suspects this is a deliberate ploy in order to get as much on the NAMA books as possible.

But then isn't this what the LRC's consultation was about to some extent?


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## canicemcavoy (1 Feb 2010)

Well, we've had NAMA for the big guys; now let's give everyone in the audience one. Sure, we're awash with money. How about a tax break for those of us who didn't join in the bubble frenzy?


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## Howitzer (1 Feb 2010)

onq said:


> Legislation should be brought in to make the lending institutions pay for their profligate selling of money.


In what sense do you think they're not paying already? For a large proportion of performing loans (tracker mortgages) the banks are making a loss. The non-performing are by definition loss making. The original sales people who got their bonuses made out like bandits but the lending institutions are bankrupt. In what sense do you want them to pay - morally?



onq said:


> In this case, no mortgage payments to be sought until the economy recovers AND unemployment falls by a minimum amount, say 20% of the current figure.
> ....
> And finally it'll give a good boot up the behind to those lending institutions holding back the recovery by not lending money.
> WIthout income from mortgages to pro them up, they'll have to lend ot businesses to make their money.


These points are mutually exclusive. Banks can't lend what they don't have. If loans aren't repaid they can't be lent out again. This is why banks aren't lending - because we're in the middle of a recession and people are no longer paying back their loans.

Reckless lending is what got us into this position. It was reckless in that the banks were lending money they didn't have on their deposit sheets, using inter-bank lending to finance your sauna/jacuzzi. What you're advocating is a return to those policies.



onq said:


> Am I missing something?
> 
> ONQ.


IMO, everything.

I don't know the correct solution. It's doubtfull whether these "Green" proposals will work as, for the most part, they avoid the problem rather than solving it. The likelihood is that there's no correct solution, just a lot of pain till these debts are paid down or written off (and paid for by the tax payer).


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## Buddyg (1 Feb 2010)

Fine idea. 

Anybody who avails of this can then pay a higher rate of tax say 50-60% for the rest of their life with reduced social welfare and pension entitlements. 


Wouldn't be fair to ask those who were financially prudent to pay for others foolishness.


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## jhegarty (1 Feb 2010)

canicemcavoy said:


> Well, we've had NAMA for the big guys; now let's give everyone in the audience one. Sure, we're awash with money. How about a tax break for those of us who didn't join in the bubble frenzy?



Sorry, no breaks for anyone who was responsible.


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## canicemcavoy (1 Feb 2010)

jhegarty said:


> Sorry, no breaks for anyone who was responsible.


 
You know, I'm not asking for much. Not for money, not for bailouts. Just for a few mea culpas from the people who got it spectacularly wrong and called the rest of us hysterical. Sorry is indeed the hardest word.


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## TioCachondo (1 Feb 2010)

A debt for equity swap would involve just the the delinquent bank and the sinking borrower.


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## tiger (1 Feb 2010)

Bit worried about what joe public might think is reasonable. e.g. this letter in today's indo:
http://www.independent.ie/opinion/letters/create-a-nama-for-homeowners-2042033.html


> Mortgages should reflect the real value of the property


 
So should mortages have risen in step with rising house prices then?


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## cartman1 (1 Feb 2010)

One things for sure, all you "let them suffer" merchants aren't going to help solve our problems. Whether you like it or not, we're all in the same boat so sticking your head in the sand won't help. Our economic recovery is dependent on helping a huge amount of people that are struggling with mortgage and non-mortgage debt. Most people are quite willing to pay back every cent they owe but they need more flexibility from the banks and if they won't help voluntarily then the government should step in to make sure it happens. Possible solutions could include extending mortgage terms or getting banks to roll-up existing short-term facilities into mortgages e.g. if you have a personal loan, cc and mortgage with a bank then their credit exposure is no different if they re-mortgage for the total amount and reduce the borrower's monthly repayments.


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## DB74 (2 Feb 2010)

So what's to stop those people getting new short-term loans and/or credit cards after the consolidation.


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## DB74 (2 Feb 2010)

tiger said:


> Bit worried about what joe public might think is reasonable. e.g. this letter in today's indo:
> http://www.independent.ie/opinion/letters/create-a-nama-for-homeowners-2042033.html
> 
> 
> So should mortages have risen in step with rising house prices then?


 
They did - it was called a top-up or equity-release!

Did you not get one - brilliant they were!


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## canicemcavoy (2 Feb 2010)

cartman1 said:


> One things for sure, all you "let them suffer" merchants aren't going to help solve our problems. Whether you like it or not, *we're all in the same boat*...


 
Er, no we're not. I love the chutzpah of this argument:

House prices rise: homeowners think, "what a clever boy am I", keep all the profit to themselves
House prices fall: homeowners wail, "HELP US! WE'RE ALL IN THIS TOGETHER!"


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## cartman1 (2 Feb 2010)

If you have even a simple grasp of how economy works then I think you'll find you are in the same boat. Anyway, who's wailing???


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## dontaskme (4 Feb 2010)

I think it's a disgraceful suggestion. For one thing the government does not have the money to be bailing people out.

Secondly, and more frighteningly, it sends out the wrong signal. People who are having trouble paying their mortgages see this and think they're going to get a "Get out of mortgage free" card. Then they will stop making repayments or missing repayments so that they well be well placed when some sort of scheme is in place.


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## DerKaiser (8 Feb 2010)

dontaskme said:


> I think it's a disgraceful suggestion. For one thing the government does not have the money to be bailing people out.
> 
> Secondly, and more frighteningly, it sends out the wrong signal. People who are having trouble paying their mortgages see this and think they're going to get a "Get out of mortgage free" card. Then they will stop making repayments or missing repayments so that they well be well placed when some sort of scheme is in place.


 
Whether you like it or not, homeowners will have to be bailed out to some extent.

I wouldn't be in favour of blunt instruments rather a staggered level of intervention.

I believe anyone with the income or savings to pay should continue to pay regardless of negative equity, etc.

We need a range of innovative measures for those who simply cannot pay including restructuring of loans (which the banks are already doing) and perhaps shared ownership where the banks take a share in the property (e.g. take 25% of the property to reduce mortgage repayments by 20% if a property is valued at €200k with a mortgage of €250k).

The government need to support these measures and possibly will have to subsidise them to some extent.  This problem is not going to just go away.  

As for those who kept their heads down during the bubble, did you ever ask yourself how much you have contributed to the economy?  

I'm not having a go at anyone but I would directly link the stamp duties paid in the last decade to the reduced level of income taxation and higher levels of public sector pay.  

I think those levels of stamp duty were correct at the time given the irrationality in the market, but let's not forget they have found their way back into many people's pockets through reduced taxation.  We cannot ignore the billions collected during the boom, primarily from the very people who are now in trouble, when we are considering the fairness of who should subsidise whom


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## Latrade (8 Feb 2010)

DerKaiser said:


> As for those who kept their heads down during the bubble, did you ever ask yourself how much you have contributed to the economy?


 
I'm sorry but that's a preposterous statement. The tax intake from Stamp Duty, VRT, etc was gained on credit and led to the disaster we're in. I agree with helping those in difficulty, but to say that their method of purchasing and financial management shouldn't be criticised because they contributed more to the economy is ridiculous. 

I didn't partake in the State Pyramid Scheme of Finance so while the tax take from my spending may well have been less, overall it's saving the economy because I'm in danger of defaulting on my mortgage and so don't require bailouts or state support. I would argue strongly the net effect is I've contributed more as result.

60% of people who own homes have no mortgage, so aren't in trouble, and then of the 40% left, what proportion are in real trouble (not just negative equity)? 

I completely agree there will have to be some move on this to assist people and naturally there will be a cost. But this is a debate on the morality of whether we allow people to struggle and if not to what extent the state can be of help. Let's not try and justify the egregious credit binge by claiming they contributed more to the economy. It won't stand up to analysis and quite right some people like myself do wonder why when we approached life with common sense and some foresight, we'll be the people hit hardest for taxes and paying for it all. I think it only fair that we get to have some say in the extent of any help.


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## Howitzer (8 Feb 2010)

DerKaiser said:


> As for those who kept their heads down during the bubble, did you ever ask yourself how much you have contributed to the economy?
> 
> I'm not having a go at anyone but I would directly link the stamp duties paid in the last decade to the reduced level of income taxation and higher levels of public sector pay.
> 
> I think those levels of stamp duty were correct at the time given the irrationality in the market, but let's not forget they have found their way back into many people's pockets through reduced taxation. We cannot ignore the billions collected during the boom, primarily from the very people who are now in trouble, when we are considering the fairness of who should subsidise whom


Mind boggling, self serving, piece of logic.

I'm pretty sure you could bottle that and use it as justification for just about anything you pleased. 

1. Senior bankers receive bonuses during boom.
2. Said bankers pay tax on their bonuses and spend the rest on champagne and caviar.
3. If only we had more of those lads we wouldn't be in the mess we're in now as their high wages and fiscal irreponsibility are what we need to get us out of this mess.

Blaming the bust on those who had some sense - well that's a new on me. Very Orwellian.


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## bullworth (8 Feb 2010)

cartman1 said:


> Whether you like it or not, we're all in the same boat so sticking your head in the sand won't help.



We weren't all in the same boat when the people being bailed out were making huge profits at minimum tax and spending it all on themselves. I'd have loved to be in the same bloody boat then , a yacht was it ?


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## DerKaiser (8 Feb 2010)

Howitzer said:


> Mind boggling, self serving, piece of logic.
> 
> I'm pretty sure you could bottle that and use it as justification for just about anything you pleased.
> 
> ...


 
Well A) it's not self serving as I've never paid stamp duty
and B) You're example is too narrow and convoluted.

I'm putting out another point of view that I've rarely seen mentioned.

Stamp duty provided a temporary unsustainable boost to state coffers in the naughties.  I fully accept that the only reason these revenues existed to such an extent is because of the unsustainable boom that got us into the current mess.  

As such, is it right that those in trouble now who have paid large taxes and duties are totally undeserving of some comeback?

The government was under no obligation to distibute these windfall taxes in the form of income tax cuts and public spending.  But it did, and the money is now gone.  

The chief beneficiaries of these income tax cuts and public expenditure increases are, in general, the people who acted prudently during the boom.  As a result, I do believe there is a logic in saying that they cannot now say 'to hell with those struggling with their mortgages.


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## Latrade (8 Feb 2010)

DerKaiser said:


> The chief beneficiaries of these income tax cuts and public expenditure increases are, in general, the people who acted prudently during the boom. As a result, I do believe there is a logic in saying that they cannot now say 'to hell with those struggling with their mortgages.


 
I really think we're beyond scraping the barrel and have the pointy stick out trying to get between the slats now. I know how the "other son" felt in the Prodigal Son now. At least his brother had the grace to be repentant as he got the fatted calf rather than blame his prudent brother.

I think the route of a "people's NAMA" is great for PR and soundbites but not for practical purposes. This is where Lenihan needs to step up to the plate and take on the banks. This issue could largely be solved within the banking sector in discussion with those struggling and working out some pattern of repayment. 

Then where this just isn't an option for whatever reason with repayment, the LRC proposals may help lessen that blow. 

I get the feeling though that the banks taking such a hard line is in order to get as much portrayed as "bad debt" and off their books over to NAMA. 

The one gripe most people seem to have is just how easy we make it for people to walk away from their responsibilities.


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## Howitzer (8 Feb 2010)

DerKaiser said:


> The chief beneficiaries of these income tax cuts and public expenditure increases are, in general, the people who acted prudently during the boom. As a result, I do believe there is a logic in saying that they cannot now say 'to hell with those struggling with their mortgages.


Tax cuts are universal benefits. It's hard to see how someone who kept their head down would have benefitted disproportionately from these.

Public expenditure increases benefitted those who received that money as either, income for PS employees, or indirectly via capital expendiure on roads, buildings, etc - developers, consultants. These weren't people who kept their heads down - they may have but not exlcusively.

And again, infrastructural benefits are universal.

So anyone who paid lots of tax deserves something back? I paid tax on a car I purchased. It's now worth a lot less than I paid for it. Where's my NAMA? 

You're making the facts suit your argument rather than the other way round.


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## DerKaiser (8 Feb 2010)

Howitzer said:


> Tax cuts are universal benefits. It's hard to see how someone who kept their head down would have benefitted disproportionately from these.
> 
> Public expenditure increases benefitted those who received that money as either, income for PS employees, or indirectly via capital expendiure on roads, buildings, etc - developers, consultants. These weren't people who kept their heads down - they may have but not exlcusively.
> 
> ...


 
You're making exactly my point.  A minority paid large taxes and the benefit was universal i.e. there was a distribution of wealth away from a (significant) minority, who purchased houses at inflated prices, to the general public.  

Now if we assist those in difficulty on their mortgages we are reversing the process, the general tax paying public will end up bailing out a minority, who happen to be a very similar bunch to the ones who paid high stamp duties in the first place.

A certain demographic have paid disproportionately high taxes and I think we cannot abandon these people.


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## DerKaiser (8 Feb 2010)

Latrade said:


> This issue could largely be solved within the banking sector in discussion with those struggling and working out some pattern of repayment.
> 
> Then where this just isn't an option for whatever reason with repayment, the LRC proposals may help lessen that blow


 
I couldn't agree more.

I was under the impression that the banks are being very proactive in restructuring repayment schedules.

As you have stated, there will be people who will just never be in a position to repay their mortgages, however.  If we don't face that fact we cannot move forward.


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## Howitzer (8 Feb 2010)

DerKaiser said:


> You're making exactly my point. A minority paid large taxes and the benefit was universal i.e. there was a distribution of wealth away from a (significant) minority, who purchased houses at inflated prices, to the general public.


No. This was your point. 


> The chief beneficiaries of these income tax cuts and public expenditure increases are, in general, the people who acted prudently during the boom.


2 very distinct things. A universal benefit and one that one chiefly benefits those who acted prudently, are 2 completely different things. Unless people who acted prudented form the majority - which is evidently not the case.

And, FYI, most homeowners will receive a GREATER tax benefit from home ownership over the first 7 years of their mortgage through Mortgage Interest Relief, than they could possibly have paid in stamp duty. Many first time buyers paid NO stamp duty and still receive a relief that can constitute 15% of their interest bill. (compare 15% of the interest on 300K x 7 years versus stamp duty on same)

As such prudent taxpayers are, and will continue for the next 8 years, to make a greater contribution than those servicing mortgages. However only one side of that argument will reap the "benefit" of owning the home. The extent to which it is a benefit is purely down to timing.


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## Latrade (8 Feb 2010)

DerKaiser said:


> As you have stated, there will be people who will just never be in a position to repay their mortgages, however. If we don't face that fact we cannot move forward.


 
Absolutely right, but as of yet we don't know what proportion of people this is. Apart from Start Mortgages, a lot of banks do seem to be more pragmatic, but just based on postings here that doesn't always seem to be consistent.

I think it needs to be raised from a voluntary or morality basis and into something enforceable and regulated. Take out the discretion from the banks and have a clear criteria for where they provide assistance and the conditions under which it is ok to persue the case by a legal route.

Where a legal route needs to be taken, again the state can have an arbitration panel or some such for "grey cases". 

Then in the cut and dried "won't pay" category we have the court system.

On reflection, I personally don't see a need for a People's NAMA. The actual NAMA was a bullet we just had to bite for the "greater good". Everything else can be handled through a regulated banking system in my opinion.


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## DerKaiser (8 Feb 2010)

Howitzer said:


> Unless people who acted prudented form the majority - which is evidently not the case.


I was making the assumption that the majority had acted prudently (as evidenced by the large proportion with no mortgage)




Howitzer said:


> And, FYI, most homeowners will receive a GREATER tax benefit from home ownership over the first 7 years of their mortgage through Mortgage Interest Relief, than they could possibly have paid in stamp duty. Many first time buyers paid NO stamp duty and still receive a relief that can constitute 15% of their interest bill. (compare 15% of the interest on 300K x 7 years versus stamp duty on same)


 
My only point has been that those who paid large stamp duties contributed handsomely to the economy and this should not be forgotten, particularly by those who benefitted.

I feel that the general public, be they taxpayers, public servants or both, simply do not acknowledge that they have benefitted from lower taxes which were only possible whilst the government collected large sums of money from residential stamp duties


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## dontaskme (8 Feb 2010)

paying lots of tax is probably more detrimental to the economy than going down the pub and buying rounds of drinks. Once the money is in the government coffers it seems more likely to be paying for hats at Ascot or revamping residences in Canada or flying financial regulators' wives around the world etc. etc. If you spend it down the pub at least you're supporting your local economy.

Paying large stamp duties just means people were fanning the flames of what was obviously an overheating economy, as well as probably being personally reckless. Hardly the stuff tales of heroism are made of.


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## cartman1 (8 Feb 2010)

dontaskme said:


> I think it's a disgraceful suggestion. For one thing the government does not have the money to be bailing people out.
> 
> Secondly, and more frighteningly, it sends out the wrong signal. People who are having trouble paying their mortgages see this and think they're going to get a "Get out of mortgage free" card. Then they will stop making repayments or missing repayments so that they well be well placed when some sort of scheme is in place.


 
I'm not suggesting we bail people out. If someone took out a debt then they should repay it, that's the basic principle from which we should start. There's a big difference between debt restructuring and debt forgiveness and the government should force the banks to be as flexible as possible in providing solutions.

If people are worried that it might happen again with the same people then make it a condition of any restructuring that they need written consent from the banks to open any new credit facility with another financial institution either indefinitely or for a period of time.


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## dontaskme (8 Feb 2010)

The banks are already being flexible because the government is making them. 

The other measures I've seen mentioned include rolling up interest and banks taking an equity stake. These both seem to come directly from the Anglo Irish playbook. Has nobody learnt anything from all of this?


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## cartman1 (8 Feb 2010)

I'm afraid they're only being flexible to a point and with their own debt. I don't agree with an interest roll up either and an equity stake isn't a great idea. Instead they should be looking at extending loan periods and sitting down with mortgage holders to assess their overall debt situation with all financial institutions not just their own. They won't do either of these at present and I'm sure there are other mechansims out there that would help.


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## Rad (12 Feb 2010)

That was a great letter in the indo, a good suggestion as how to work out what is fair for the NAMA public bailout.

Re those who are knocking this bailout, the government is responsible for the situation we are ALL in. 

I personally bought 4 new houses over the last 13 yrs paying 40% tax to the government on each, ex stamp. I also have paid in excess of 50K pa Tax for the last 20 years.

I personally think its time for me to get this some of this money back.

Regarding the knockers of the Ryan proposal maybe we should also stop paying social welfare, dole etc. Its the same thing. We all make mistakes.


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## dontaskme (13 Feb 2010)

Rad said:


> I personally bought 4 new houses over the last 13 yrs paying 40% tax to the government on each, ex stamp. I also have paid in excess of 50K pa Tax for the last 20 years.
> 
> I personally think its time for me to get this some of this money back.


 
It's already been spent, flying Jackie Healy Rae and John O'Donoghue up and down from Kerry. :lol: :lol: :lol:


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## Rad (15 Feb 2010)

Thanks Sunny.

Yes I traded up 4 times. 

Whats with the attitude BULL not so much WORTH in your points. Get a life.

Anyway my gripe is with the Government who pumped this whole thing. As Bertie said "The Fundamentals of the Property Market are sound"


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## Howitzer (15 Feb 2010)

You traded up 4 times, into new houses each time? ("40% tax")

And paid stamp duty each time? ("I personally bought 4 new houses over the last 13 yrs paying 40% tax to the government on each, ex stamp")

How much mortage interest relief have you received over that period? Your annual mortgage accounts from the bank will give an exact number.


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## Howitzer (15 Feb 2010)

Hardly. If you read the previous posts on the thread you'll see how you get much of tax you paid back in Mortgage Interest Relief. FTB's get it all back. 

Your scenario of trading up 4 times into a new house each time isn't the norm.

I'd imagine 13 years ago you got the first time buyers grant too on your first purchase.


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## bullworth (15 Feb 2010)

Rad said:


> Thanks Sunny.
> 
> Yes I traded up 4 times.
> 
> Whats with the attitude BULL not so much WORTH in your points. Get a life.



Get a life ? My attitude is informed by the fact that the remainder of my salary after paying taxes for bail outs is what pays for my life and for my family.
I am sure if you had continued to make super profits your attitude would have been to not give a damn about sharing them with our schools and hospitals.  Now you took a gamble and made losses you expect society to bail you out when society hardly has enough money for schools and hospitals.

The renters decided to suffer the consequences of missing out on ''infinite'' prices rises. It works both ways. You would never expect them to share in your super profits f you had done well. Renters should not be penalized by having to bail homeowners out when they cant' even afford a home of their own and have to rent. The very notion that someone stuck in a bedsit has to pay extra taxes to pay for your sense of entitlement to own a home is fundamentally unfair.

Nobody forced you to pay stamp duty. Nobody forced you to buy 4 houses. 
My attitude Rad is informed by the simple fact that Adults in the real world know that nobody owes them a living. Adults are responsible for their own decisions.



Rad said:


> Anyway my gripe is with the Government who pumped this whole thing. As Bertie said "The Fundamentals of the Property Market are sound"



Bailing property gamblers out would be yet another ridiculous policy by a government which has not changed from the one which got us into this mess.


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## DB74 (16 Feb 2010)

Does the sequence of the last few posts on this thread look out-of-sync to anybody else but me?


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## Howitzer (25 Feb 2010)

Cabinet to give debt think-tank the green light




> The group is expected to consist of Irish Banking Federation boss Pat Farrell, consumer advocate and founder of the askaboutmoney website, Brendan Burgess; and Paul Joyce of the Free Legal Aid Centres (FLAC). Also on the group will be former KBC Bank boss Tom Foley and representatives from the Financial Regulator and the Money Advice and Budgeting Service.





> The group will advise on reform of debt enforcement, including the regulation of debt agencies, and the establishment of a Debt Enforcement Office to remove debt proceedings from the courts.
> The Greens believe a fear of debt is hampering recovery as consumers remain wary about spending.
> "The whole idea is that we don't want people encumbered by debt and for that to stifle our recovery," Mr Ryan said recently.


Debt forgiveness doesn't appear to be within it's remit. For the most part this appears to be about ironing out operational and legal issues which have only come to light because of the simultaneous collapse of the employment/housing markets. There won't be any helicopters raining down money.


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