Property Tax - Will you pay?

[Purple]

Strange. I thought ordinary people's pension funds were being hammered.
These bonds holders are getting all their money back.

The pension funds are the bond holders; the fund managers bought the bonds with pension contributions because they were "safe" investments. If we burn the bondholders we are setting fire to our pensions.

 

[oldnick]

There are pros and cons to property tax but at a time when the property market is so flat does Ireland need another disincentive to people buying a home?

I assume that there would be allowances made for peoples incomes, age and other factors.

 

[z107]

Not all funds are invested in equities (which have indeed got hammered). Bonds form a significant part of many pension portfolios.

From the article:

Of the 80 listed companies only 7 listed their business as dealing with pensions and being a cooperative savings institution. Of those, only 4 listed churches and unions as their clients, the others could well have been big pension funds.

 

[T McGibney]

There are pros and cons to property tax but at a time when the property market is so flat does Ireland need another disincentive to people buying a home?

You're correct of course.

The NPPR (and more pointedly the probability of it being increased sharply in future years) has already discouraged plenty of people from buying up cheap properties from bust developers. And little wonder that Nama is sinking...

 

[T McGibney]

Of the 80 listed companies only 7 listed their business as dealing with pensions and being a cooperative savings institution. Of those, only 4 listed churches and unions as their clients, the others could well have been big pension funds.

But there is no evidence that such descriptions are conclusive or reliable? Its hardly credible for example that the entirety of European church and union funds, held in the form of bonds, are held with only 4 of the largest international financial institutions, or that the same applies to pension funds held with only 7 companies?

 

[z107]

But there is no evidence that such descriptions are conclusive or reliable?

So why aren't we being told then?
Why doesn't Enda stand up and say "The bond holders are pensioners"?

Maybe the truth, that Enda seems to be hiding, is far less palatable.

Do you have any links or evidence to suggest that the majority (or even significant portion) of the €700m that was just repaid was for pensions?

 

[Purple]

Purple, it's where our money is ultimately ending up. Taxes and charges are being increased and introduced and savage cut backs are taking place. All this is happening so that we can pay these bond holders. That's the ultimate goal. Of course some of the taxation is to run the country, but we've always had that.

Just think about it for a minute. We all know that that the country is 'living beyond it's means' , but how the hell do we suddenly owe hundreds of billions? where did all of all that money come from/disappear too? Did we suddenly give people on the dole free new cars, or start paying public sector people with gold bullion?

The total cost of the banking collapse and all of the repayments we have to make add up to a little over three years worth of our current spending deficit. The real problem is that we were and still are spending more to run the country (Health, Education, Welfare etc) than we take in in taxation. We are, in the truest possible sense, living beyond our means.

 

[z107]

But there is no evidence that such descriptions are conclusive or reliable? Its hardly credible for example that the entirety of European church and union funds, held in the form of bonds, are held with only 4 of the largest international financial institutions, or that the same applies to pension funds held with only 7 companies?

Where does it say that?
The article is referring only to Anglo Irish Bank bond holders.

 

[T McGibney]

Why doesn't Enda stand up and say "The bond holders are pensioners"?

Didn't the late Brian Lenihan say something like this when he was in charge?

So why aren't we being told then?

Do you have any links or evidence to suggest that the majority (or even significant portion) of the €700m that was just repaid was for pensions?

Its not up to me to trawl the internet for your pleasure.

 

[T McGibney]

Where does it say that?
The article is referring only to Anglo Irish Bank bond holders.

To rephrase, I frankly don't believe that of all the major household names on the list, including Aberdeen, BNP, Barclays, Soc Gen etc, that only 4 of them hold bonds for church or union funds and that only 7 of them hold bonds for pension funds.

 

[Firefly]

The total cost of the banking collapse and all of the repayments we have to make add up to a little over three years worth of our current spending deficit. The real problem is that we were and still are spending more to run the country (Health, Education, Welfare etc) than we take in in taxation. We are, in the truest possible sense, living beyond our means.

+ 18bn

The budget deficit is the white elephant in the room. However having the banking bailout carrying on for so long is a godsend for FG/Labour as they can put off the eventual slashing of government spending that is coming down the line and I've no doubt that it is coming down the line. Assuming a rate of 4% then every 25bn we borrow requires a bn to be repaid in interest alone the following year. This is on top of further borrowing and you can see that soon enough it will be unsustainable.

 

[Latrade]

To rephrase, I frankly don't believe that of all the major household names on the list, including Aberdeen, BNP, Barclays, Soc Gen etc, that only 4 of them hold bonds for church or union funds and that only 7 of them hold bonds for pension funds.

It's hard to get any accurate information on this which is why speculation can be difficult. Once the scale of the Anglo disaster became known, many of the original bondholders sold off their bonds for a big haircut on the presumption that Anglo would go bust and they wouldn't get anything. It's the hedge funds and other institutes that took a gamble on buying those bonds that are going to reap the benefits. They would have bought them at 50% or even less of the price, but are now promised 100% return.

How many of the bonds were sold on I don't know.

 

[z107]

The total cost of the banking collapse and all of the repayments we have to make add up to a little over three years worth of our current spending deficit. The real problem is that we were and still are spending more to run the country (Health, Education, Welfare etc) than we take in in taxation. We are, in the truest possible sense, living beyond our means.

Look at this article:
[broken link removed]

What do you think of that?

 

[Firefly]

Look at this article:
[broken link removed]

What do you think of that?

No doubt...the banking bailout has snookered this country, but it's largely a one-off amount and I'm pretty certain that there will be a writedown at some stage...we simply could not repay this unless over a very very long time at 0% interest. The current budget deficit is totally our own making though and within our control. At a personal level this is akin to losing your job, buring through all your savings and still eating out 3 nights a week on your credit card...

 

[RMCF]

I paid SD only in Jan 2011, but I will pay the property tax, as there is no other alternative.

This is unavoidable.

I think I heard once that 60%(?) of properties in Ireland have no mortgages on them. This is a lot of people with a lot of equity built up, and the Gov will be dying to get something out of them.

 

[oldnick]

Equity does not equal cash.
It doesn't even mean that one can easily borrow cash to pay property taxes.

 

[orka]

Equity does not equal cash.
It doesn't even mean that one can easily borrow cash to pay property taxes.

I think I read that the plan is that the property tax can be accrued if the property-owner has insufficient cash to pay it and then when the house is sold/inherited, the tax becomes due then. I think that is fairer than making some people exempt because they are cash-poor.

 

[DerKaiser]

Yeah I'll pay. Last time I checked we are a democracy and I don't think I'd be hanging around if I didn't respect the right of the democratically elected government to levy taxes.

As for the unrelated argument being made here, last time I checked we're racking up debt rather than paying it off. I will certainly not feel hard done by as long as the country is running a current budget deficit (even excluding debt interest).

I might start complaining when we need to run very large current budget surpluses to pay off banking debts, but we're nowhere near that situation. Anyone who thinks a €200 property tax represents paying off billionaires rather than a minor effort at living within our means is deluded.

 

[z107]

I'm curious at to what money is actually being used to pay this €700m, and the bank bailouts? Where is this money coming from?

According to a few posts on this thread, it's not tax payers' money being used, so where are we getting it?

 

[T McGibney]

I think I read that the plan is that the property tax can be accrued if the property-owner has insufficient cash to pay it and then when the house is sold/inherited, the tax becomes due then. I think that is fairer than making some people exempt because they are cash-poor.

If it accrues at the same rate as the NPPR (10% simple interest per month) some people will end up losing all the equity in their homes within a decade. This could amount to effective confiscation by the State of vulnerable people's property.