That would be a very high rate on property. If my million Euro house went up in value by €50k in a year I'd have to pay an extra €25k in tax or €15'750 at 1.5% on the new value of €1,050,000.
That would be a very high rate on property. If my million Euro house went up in value by €50k in a year I'd have to pay an extra €25k in tax or €15'750 at 1.5% on the new value of €1,050,000.An annual wealth tax (levied at the risk free rate of return times the rate of income tax) is a far better way to tax wealth, or less rigorously 1.5%
What does that mean?People would stop hoarding housing. Use or move.
I agree with you, thanks for clarifying.Yes, If your house was worth €1,050,000 you would have to pay €15,750 tax each year. People would stop hoarding housing. Use or move.
A high rate? I think that says more about the distorted housing market than anything else. 1.5% is not of itself high.
The price of houses would fall. The population density of housing would rise. Both positives for society.
There would be no CGT nor CAT both positives for the individual.
People would be more likely to trade down as they get older fewer/none of their children live in the house.What does that mean?
One of the biggest issues we have is that our average household size (number of people living in a property) is declining. That means we need more houses for the same amount of people. In 1991 it was 3.34 people per household. It's currently 2.75. That means we need 18% more housing units for the same number of people. In other words that statistic accounts for 360,000 housing units. At €250k per unit that's €90 billion.How would that help the housing market?
When domestic rates were either introduced or dramatically escalated in the early 1970s, owners avoided it by literally demolishing superfluous housing or systematically reducing them to an uninhabitable state. It meant inter alia the permanent loss of countless heritage properties.Yes, If your house was worth €1,050,000 you would have to pay €15,750 tax each year. People would stop hoarding housing. Use or move.
Well I'm glad someone else realizes that.Older people living longer and staying in their family home is a large driver in that statistic. Of course we'd need suitable places for them to trade down to in their local area for that to work. There's no point is looking to engineer an outcome which isn't available.
How big an issue was that? Do you know what the numbers were?When domestic rates were either introduced or dramatically escalated in the early 1970s, owners avoided it by literally demolishing superfluous housing or systematically reducing them to an uninhabitable state. It meant inter alia the permanent loss of countless heritage properties.
Your proposal would be likely to have the same result.
No idea on either count. I was very young at the time. It appears in retrospect to have been common enough in the case of historic houses that are now recorded as having been demolished or abandoned around that time, but anecdotally seems to have been rife in the case of ordinary homes. Both of my grandparents' homes (where my parents respectively grew up) were dealt with likewise around that time, one demolished and the other converted to agricultural use.How big an issue was that? Do you know what the numbers were?
It might mitigate a repeat to an extent in urban centres for example in places like Mountjoy Square that were badly run down in the 70s but a site tax won't work too well in that respect in the likes of Castle Saunderson, where the current site value is probably negative.I suspect a tax that was weighted in favour of the site value would mitigate that problem but of course that would be more complex to calculate.