Re: Agree
Well said jem.
Bearish, allowing landlords and others to deduct interest and other costs from their gross income before expenses is not a "tax relief" - it is a fundamental principle of all tax systems in the developed world that taxpayers are taxed on their net income <!--EZCODE BOLD START--> after<!--EZCODE BOLD END--> associated allowable expenses and not on their turnover.
You could argue, depending on your ideology, that tax reliefs and deductions “represent a transfer of wealth, via the taxation system” from taxpayers to property investors and entrepreneurs, or indeed that businesses should be taxed more heavily than they are. However, it is true that much of Ireland's economic success in recent years has been based on rewarding and incentivizing risk-taking, enterprise and capital investment via a low-tax regime. The result is an unprecedented economic boom and a huge increase in employment.
Whether you like it or not, the same economic principles apply to the housing market. If a govt makes it attractive for investors to invest, (and for builders to build) then the stock of housing will increase and you will have enough accommodation for everyone. In the long term this will mean meaningful competition in the rental market with a fair rent for the tenant, a decent (but not obscene) profit for the landlord and a roof over everyone's head.
If you discourage investors from investing, you will get a worsened shortage of properties, higher prices in the form of rents, and a reduced pool of landlords operating an effective cartel and enjoying obscene profits. New money for investment will go elsewhere - most likely into foreign property or stockmarkets. This has already happened to an extent during the period of the Bacon experiment and there is no evidence to show that the same thing wouldn’t happen again if Bacon or more extreme measures were introduced. You talk of people’s disposable incomes having peaked. Well that may be true in some sectors, but your claim doesn’t tally with the current economic statistics regarding wage increases, particularly in the services sector and possible industrial unrest (re, e.g. benchmarking) imminent in other sectors.
It is <!--EZCODE BOLD START--> not<!--EZCODE BOLD END--> scaremongering to say that many tenants would face eviction if a number of landlords hit financial difficulty and were forced to put their property up for sale. No first-time buyer or other owner-occupier would buy a property unless vacant possession were available. Where will the tenants go? How many long-term vacant rental properties are there in Dublin?
Private-sector tenants would be in a far safer position if the govt were building massive amounts of state housing, to replace the current dependence on private landlords, (which IMHO is the way forward) but in the current public finances climate, that seems unlikely to happen. It would be a disastrous folly to mess around so drastically with the housing market without such a backup being available for these people.
By the way, I have no quibble with your arguments for better security of tenure for tenants. However, I do think it’s a bit much for you to lecture me at length about allegations of hidden vested interests, given that you haven’t revealed your identity and circumstances on AAM while I have. No matter what you might like to believe, I have no interest in seeing the current rent and house price spirals continue.