Because inheritances can be received tax-free up to certain (very generous) thresholds. Obviously.
Local Property Tax should not be deferred any further
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Sophrosyne
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What is?!
Sophrosyne
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In this context, "sophistry" refers to my use of a fact in an argument to make my point even though I know my point to be untrue or false. Agreed?
Well, I'm sorry but I don't agree that my point is false or untrue. On the contrary, I am genuinely of the opinion that a meaningful property tax would result in a better allocation of scarce resources.
That's a pretty mainstream, progressive opinion in most developed countries. It's hardly radical.
Well, I'm sorry but I don't agree that my point is false or untrue. On the contrary, I am genuinely of the opinion that a meaningful property tax would result in a better allocation of scarce resources.
That's a pretty mainstream, progressive opinion in most developed countries. It's hardly radical.
Sophrosyne
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I am not questioning your opinion. You are entitled to that.
What I find objectionable is your use of highly subjective scenarios to subtly create a false link between older property owners and the current housing scarcity.
torblednam
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Well there's no CGT on death.
Anyone who you bequeathed the house to will only be fully taxable on it IF they've already taken benefits in excess of the applicable group threshold for exemption.
I'm lost.
I genuinely know a significant number of retired civil servants that live in valuable properties that pay little or no income tax. That's not a "subjective scenario" (whatever that means) - it's simply my experience and I've explained how this scenario arose. Not an extreme scenario by any means in Dublin.
Again, I haven't tried to create a "false link" between older property owners and the current housing crisis. You are reading that into my posts but I never implied such a link, subtly or otherwise.
My opinion is simply that a meaningful property tax would result in a better allocation of scarce resources. Housing is always a scarce resource.
Sophrosyne
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So what if you do?
That doesn't mean that it is the norm. It is just your personal experience and nothing more than that. Others have different knowledge.
Besides, where does this type of thinking go.
Should everyone, including wealthy younger people, live in your idea of "right size" properties?
Gordon Gekko
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The thresholds will have already been used up.
torblednam
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How do you know that?
Unless you can see the future you don't know who you're going to end up leaving your house to (you might change your mind about who's to get it, if you're half as quick to anger in real life as you are online
). Also, unless you've already used up the relevant threshold to every potential recipient, you can't know that it will have been used up.
Gordon Gekko
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How do you know that?
Unless you can see the future you don't know who you're going to end up leaving your house to (you might change your mind about who's to get it, if you're half as quick to anger in real life as you are online
Also, unless you've already used up the relevant threshold to every potential recipient, you can't know that it will have been used up.
You won't be getting the Group C threshold after that comment!
It's easy enough to extrapolate one's asset base versus the number of beneficiaries versus the thresholds
I was simply responding to your accusation that I was being subjective. I wasn't.
I didn't say it was the "norm" that retirees live in valuable properties while paying little or no income tax. I said it was commonplace and explained why that was the case.
I think that our tax code should encourage the efficient use of assets by everyone.
So you are extrapolating that inheritance tax will bite because your heirs will already have received very generous tax-free gifts from you. Fair enough.
But I really don't see how that's an argument against having a meaningful property tax.
The Horseman
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If I may offer some opinion on the issue of property tax.
The idea that property tax should be charged on the value of a property is insane. How can it cost the Council more to light the streets on my road, cut the grass etc than it costs to do the same on another identical street because the value of the house on the other street is lower than mine.
if you want to have a fair and equitable rate then charge the property tax on the square footage of the property ie all properties pay based on the size of the property. it is crazy that your property tax can increase solely because the value of your property increases. What extra services are you getting for the increase in the charge.
Certainly it is not unrealistic to increase the property tax in line with inflation, there is a logic to this as wage costs etc will increase in line with inflation etc however, charging a property tax based on the movement in property prices is crazy.
The govt is looking to spread the tax base and is looking for a regular source of income, by levying the tax to the size of the property will do that. No property will decrease in size, although we are all to well aware that property prices can change quite dramatically.
The idea that property tax should be charged on the value of a property is insane. How can it cost the Council more to light the streets on my road, cut the grass etc than it costs to do the same on another identical street because the value of the house on the other street is lower than mine.
if you want to have a fair and equitable rate then charge the property tax on the square footage of the property ie all properties pay based on the size of the property. it is crazy that your property tax can increase solely because the value of your property increases. What extra services are you getting for the increase in the charge.
Certainly it is not unrealistic to increase the property tax in line with inflation, there is a logic to this as wage costs etc will increase in line with inflation etc however, charging a property tax based on the movement in property prices is crazy.
The govt is looking to spread the tax base and is looking for a regular source of income, by levying the tax to the size of the property will do that. No property will decrease in size, although we are all to well aware that property prices can change quite dramatically.
Good point. If my property goes up in value by 50%, and my property tax went up by 50%, would we get 50% more services? Not on your nellie.
And if I spend money to improve my property in some way, this may increase the value of the property but it in absolutely in no way places any extra demands on the local services I am 'consuming'.
Gordon Gekko
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My argument is that I'm stuck paying a lot of property tax on a property that I bought with a combination of income taxed at 52% and monies borrowed at artificially high rates (to shore up bust State owned banks), I continue to pay tax at 52%, and my heirs will lose 33% of the value of the property down the line.
Isn't there such thing as overfishing?
Hi Gordon
I've already agreed that your marginal effective tax rate is too high (although you might have some sympathy for those with a marginal effective tax rate of 55%) and applies to an inappropriately large proportion of your income.
But surely that's an argument in favour of property taxes? By shifting a higher proportion of the tax burden to capital, it creates space to lower taxes on income. That would incentivise productive endeavours and disincentive the misallocation of capital.
Bear in mind that I'm not arguing for a higher overall tax burden – I'm arguing for a partial shift in the existing burden from income to capital.
I would suggest that you are not really paying a lot of property tax by international standards. Try paying 1% (California) or 1.81% (Texas) per annum on the assessed value of your property.
With respect, the inheritance tax point is a red herring. Your heirs will not lose 33% of the property value – they will pay CAT at a rate of 33% on gifts and inheritances above very generous thresholds. CAT has (and should have) no connection with property tax.
Mortgage rates obviously have nothing to do with taxes but aren't you currently carrying a mortgage at a rate that is very substantially lower than the Eurozone average? It's not all bad!
I've already agreed that your marginal effective tax rate is too high (although you might have some sympathy for those with a marginal effective tax rate of 55%) and applies to an inappropriately large proportion of your income.
But surely that's an argument in favour of property taxes? By shifting a higher proportion of the tax burden to capital, it creates space to lower taxes on income. That would incentivise productive endeavours and disincentive the misallocation of capital.
Bear in mind that I'm not arguing for a higher overall tax burden – I'm arguing for a partial shift in the existing burden from income to capital.
I would suggest that you are not really paying a lot of property tax by international standards. Try paying 1% (California) or 1.81% (Texas) per annum on the assessed value of your property.
With respect, the inheritance tax point is a red herring. Your heirs will not lose 33% of the property value – they will pay CAT at a rate of 33% on gifts and inheritances above very generous thresholds. CAT has (and should have) no connection with property tax.
Mortgage rates obviously have nothing to do with taxes but aren't you currently carrying a mortgage at a rate that is very substantially lower than the Eurozone average? It's not all bad!
Gordon Gekko
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Hi Sarenco,
The blended rate of all our mortgages is way over the Eurozone average.
G
The blended rate of all our mortgages is way over the Eurozone average.
G
Fair enough but the blended rate on all outstanding floating rate mortgages in Ireland is almost exactly the same as the blended rate on all outstanding floating rate mortgages in the Eurozone as a whole.
I think that is pretty extraordinary when you consider our oversized default rates.
Anyway, we are going way off topic...
I think that is pretty extraordinary when you consider our oversized default rates.
Anyway, we are going way off topic...