Bank of Mum and Dad
- Thread starter Purple
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Two anecdotal examples
Friend bought small industrial unit / warehouse in Clondalkin maybe 7-8 years ago.
He made more gain selling the unit in 2020, free of CGT, than he ever did while trading from the premises. That is wrong.
My brother bough a modest terraced house in D8 in 2013/14, and has probably made more in unrealised capital gains since than than he has saved out of his modest wages.
Friend bought small industrial unit / warehouse in Clondalkin maybe 7-8 years ago.
He made more gain selling the unit in 2020, free of CGT, than he ever did while trading from the premises. That is wrong.
My brother bough a modest terraced house in D8 in 2013/14, and has probably made more in unrealised capital gains since than than he has saved out of his modest wages.
RetirementPlan
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I went by this, with average wages never getting over €50k
Ireland average annual wage 2022 | Statista
The average salary in Ireland was 52,971 euros per year in 2022, compared with 53,951 in 2021.
www.statista.com
Just curious, why would it have been free of CGT?
Gordon Gekko
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The exemption that was brought in (from CGT for 4-7 years).
People also forget the power of compounding, with an asset over time gains are compounding tax free as you go along.
People also forget the power of compounding, with an asset over time gains are compounding tax free as you go along.
I think that's part of the issue, the people who were a little better off than those who couldn't afford property are now way better off not throught hard work but capital appreciation, and the ability to access that equity for their children's benefit is only serving to widen the gap and increasing the numbers who will never be able to afford to buy a home.
Interesting topic!
I agree that money printing and the resultant appreciation of house prices has disproportionally benefited adult children whose parents were lucky enough to buy a house years ago and who ( to quote Leo) "release equity for their children's benefit". However, I suspect many other parents are helping their children from savings, which had to be firstly earned, then paid tax upon and finally not touched over many years. An example of this would be saving the children's allowance, which is currently 140 per month, which over 16 years, comes to 26k...
I agree that money printing and the resultant appreciation of house prices has disproportionally benefited adult children whose parents were lucky enough to buy a house years ago and who ( to quote Leo) "release equity for their children's benefit". However, I suspect many other parents are helping their children from savings, which had to be firstly earned, then paid tax upon and finally not touched over many years. An example of this would be saving the children's allowance, which is currently 140 per month, which over 16 years, comes to 26k...
Which is less than one years worth of capital appreciation on a family home in many of our cities.
I agree, but to release equity would mean a remortgate - personally, I would prefer to give the kids cash if I had the choice.
Owning property is not a one-way street to so-called wealth. If it were there would be no need for purchasing equities. Just look at all the people in negative equity even now and all the trials and tribulations that brought on people. There are risks involved in purchasing a property and it is not always onwards and upwards. There is a need for reward as well otherwise people will not take a chance. Maybe go backing the favourite in every horse race.
It was not until the big vulture funds came into the market that the high rental prices came into prominence. That is another story.
Who is going to house the people in rental accommodation in provincial Ireland? Not the vulture funds in my opinion.
It was never easy to fund your first house purchase without making sacrifices and I have very personal experience of that even 40 years ago
It was not until the big vulture funds came into the market that the high rental prices came into prominence. That is another story.
Who is going to house the people in rental accommodation in provincial Ireland? Not the vulture funds in my opinion.
It was never easy to fund your first house purchase without making sacrifices and I have very personal experience of that even 40 years ago
True, but it is much harder now. I know that doesn't tally with the 'young people now-a-days' narrative but it's the truth.
I bought my first place when I was 23. It was IR£56k. 18 months later I sold it for €81k. I used that money to buy a 4 bed semi in North Dublin for €89k. I sold that 12 years later for €535k. I made more money from that house than I took home after tax from my job in that 12 years.
Then they are idiots because they are confronted with a problem that is blighting their lives and they are too lazy or too stupid to want to understand what that problem is. Instead they'll listen with open mouths to populist nonsense which won't help them one bit.
So I really hope you are wrong. I really hope they do care and care deeply.
Purple said "I bought my first place when I was 23. It was IR£56k. 18 months later I sold it for €81k. I used that money to buy a 4 bed semi in North Dublin for €89k. I sold that 12 years later for €535k. I made more money from that house than I took home after tax from my job in that 12 years."
"Yes Purple". You took the risk and so did I but it might have worked/could have worked out differently for you and I'm sure you made sacrifices along the road. Had it worked out differently for you would there have been a Government agency to bail you out at the time. Just enjoy your good fortune and hope it makes up for your sacrifices in the past.
I can quote the reverse scenarios but I worked hard and dusted myself down and made sacrifices along the way again got to a comfortable position again.
Some people make life choices and "whinge" when their life choices conflict with reality. I accept that that is not the case in every situation
"Yes Purple". You took the risk and so did I but it might have worked/could have worked out differently for you and I'm sure you made sacrifices along the road. Had it worked out differently for you would there have been a Government agency to bail you out at the time. Just enjoy your good fortune and hope it makes up for your sacrifices in the past.
I can quote the reverse scenarios but I worked hard and dusted myself down and made sacrifices along the way again got to a comfortable position again.
Some people make life choices and "whinge" when their life choices conflict with reality. I accept that that is not the case in every situation
RetirementPlan
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Why is there a 'need for reward'? This should be about homes for people, not about investment decisions.
I think it is normal expectation for people who buy a property to assume in the long run that, in financial terms, it's a good decision...it'll be worth more than you paid for it. However, that's a long way from the returns that have been made since we joined the Euro. Kids in the future, unless they have parents with cash or are happy to remortgage, will find it very difficult to ever own their own home.
For anyone who bought a property more than 20 years ago it has been.
Ditto for me, however a shorter time frame and thus less in absolute terms, but yeah, my take-home pay didn't match the return I made on property either.
That is the way the world works to answer your specific quote. Maybe in Utopia it maybe different. Why should there be a risk of a loss on the reverse of that situation which has happened.