Property taxes to include BER

[The Horseman]

as far as I am concerned it should always have to be 40 years for a full contributory pension
not fair for someone to come within 10 years of pension to make a voluntary contribution of 250 has been increases to 500 Euro I think, and get the same pension as someone who paid in for fifty years,

You are missing my point. The point I am making is that the criteria has changed and no doubt will change by the time I retire.

I agree it was not fair that after 520 contributions you got the same as someone who made 2500 contributions.

Assuming I will reach retirement age I will have worked full time for 53 years and I fully expect anything I get as a State pension will go back to the state in taxes.

I often wonder why bother working and plan for the future when the state comes along and says thanks very much we are going to give it to your neighbour who didn't plan.

 

[kinnjohn]

I am almost 100% certain if people are honest they are the very people who re-elected and voted for the same parties and will again come next election,
out of interest, you said you will have worked full time for 53 years what age will you be by then 65

After 2022 revenue will be auditing LPT where they think people self-declared property under market value,
again this is being slipped in and not a word out of any TD,

 

[The Horseman]

I am almost 100% certain if people are honest they are the very people who re-elected and voted for the same parties and will again come next election,
out of interest, you said you will have worked full time for 53 years what age will you be by then 65

After 2022 revenue will be auditing LPT where they think people self-declared property under market value,
again this is being slipped in and not a word out of any TD,

I am due to retire at 68. My working life will be 52 yrs rather than 53 (my error). I started work at 16 and have worked ever since.

 

[kinnjohn]

Thanks for sharing when you are due to retire, I suspected you would say 68, I started working younger than you called it off after 47 years aged 62 and a bit, regret I did not go a year earlier, 22 years perfect attendance up to the day I retired,
in my opinion, 68 is away too old to retire in two years you will be over 70 if you retire before 68 I suspect you will not regret it one bit,
back to LPT
I know a retired UK pensioner who is paying around 2000 sterling in council tax,

 

[Leo]

So in your eyes if we don't have enough workers paying income tax when it comes to my retirement its tough.

Where did I say that?

So rather than changing how we do things now for the future we can just "wing it".

Again, I don't believe I said anything that could be interpreted as let's just wing it!

I'm all for change, but changes that make sense.

 

[Leo]

I often wonder why bother working and plan for the future when the state comes along and says thanks very much we are going to give it to your neighbour who didn't plan.

Assuming you put a semi-competent plan together, you should end up much better off than your neighbour who didn't plan. But, on the chances that your plan fails spectacularly and your individual efforts result in little or no income, then isn't it nice to know you will have the fall back of the state pension?

 

[The Horseman]

Where did I say that?


Again, I don't believe I said anything that could be interpreted as let's just wing it!

I'm all for change, but changes that make sense.

You commented that the state pension is currently funded by current tax revenue. Prsi is by its very name an insurance to include income protection in the form of a pension (state).

Like any other protection be it mortgage protection to cover your mortgage should you become ill or even critical illness cover. Insurance makes a payment on an estimated event.

We all know retirement will happen and as such can be more reliably estimated. Therefore the change needed should be to allocate some of the prsi income to this issue.

 

[The Horseman]

Assuming you put a semi-competent plan together, you should end up much better off than your neighbour who didn't plan. But, on the chances that your plan fails spectacularly and your individual efforts result in little or no income, then isn't it nice to know you will have the fall back of the state pension?

I think I have a competent plan. The issue I have is that the State will punish me for my foresight and my neighbours lack of foresight.

If I use the current situation of a private landlord to illustrate my point (as I am very familiar with this area). The State has abdicated its responsibility to house people and put limits on what landlords can do with their properties. I am a landlord who invested as part of pension planning.

So I did "the right thing" to ease the need for state support when I retire and am now being penalised for doing the right thing by trying to provide for myself.

The control of my property has been taken from me by the State.

With the pensions timebomb I don't expect it will be sufficient even to have a basic standard of living by the time I retire.

I recall seeing an article on TV yesterday where (I think it was age action Ireland) commented that the state pension was below the poverty line. So if this is the case when we have the numbers of workers v numbers of pensioners is due to reduce even further this would imply state pensions would either fall or not keep pace with inflation and ergo purchasing power is reduced.

 

[Leo]

You commented that the state pension is currently funded by current tax revenue. Prsi is by its very name an insurance to include income protection in the form of a pension (state).

That's just a fact. Again, where did I state:

So in your eyes if we don't have enough workers paying income tax when it comes to my retirement its tough.

Prsi is by its very name an insurance to include income protection in the form of a pension (state).

Like any other protection be it mortgage protection to cover your mortgage should you become ill or even critical illness cover. Insurance makes a payment on an estimated event.

You're mistaking individual insurance with social insurance there. Individual insurance policies benefit the individual, social insurance funds social needs. The money you pay in there for the most part goes to pay others who are currently in receipt of state benefits.

 

[Leo]

I think I have a competent plan. The issue I have is that the State will punish me for my foresight and my neighbours lack of foresight.

No, they will continue to tax your income above the thresholds of the day. Having a decent pension that supports a much better standard of living than your neighbour who didn't plan is hardly a punishment. You're introducing so many issues here this is becoming a moan about taxation in general!

If I use the current situation of a private landlord to illustrate my point (as I am very familiar with this area). The State has abdicated its responsibility to house people and put limits on what landlords can do with their properties. I am a landlord who invested as part of pension planning.

So I did "the right thing" to ease the need for state support when I retire and am now being penalised for doing the right thing by trying to provide for myself.

You did the right thing? So your motivation in investing in a rental property was to ease the plight of of those in need? Really? It's either an investment or a social service, you shouldn't conflate the two.

How are you being penalised?

 

[The Horseman]

That's just a fact. Again, where did I state:




You're mistaking individual insurance with social insurance there. Individual insurance policies benefit the individual, social insurance funds social needs. The money you pay in there for the most part goes to pay others who are currently in receipt of state benefits.

I am not. Insurance is based on the concept of large numbers exactly like life assurance. Individual Insurance benefits the individual because every policy holder who does not claim has contributed to paying the claim. Payouts are funded by the return on investment the insurance company has made between the time a premium is paid and a subsequent claim is paid.

You accept we have a state pensions timebomb issue. So part of the tax take (I am including prsi,usc,income tax all under the heading of tax revenue) should be ringfenced to address this issue.

 

[Leo]

I am not. Insurance is based on the concept of large numbers exactly like life assurance. Individual Insurance benefits the individual because every policy holder who does not claim has contributed to paying the claim. Payouts are funded by the return on investment the insurance company has made between the time a premium is paid and a subsequent claim is paid.

That's just not how social insurance works. While there is a relatively small investment fund, social insurance is largely paid out directly from the money coming in.

You accept we have a state pensions timebomb issue. So part of the tax take (I am including prsi,usc,income tax all under the heading of tax revenue) should be ringfenced to address this issue.

You're again crediting me with things I didn't say.

Given your strong views, I presume you made a submission to the Pensions Commission during the public consultation period?

Can you clarify how you are being penalised for investing in your retirement?

 

[The Horseman]

That's just not how social insurance works. While there is a relatively small investment fund, social insurance is largely paid out directly from the money coming in.



You're again crediting me with things I didn't say.

Given your strong views, I presume you made a submission to the Pensions Commission during the public consultation period?

Can you clarify how you are being penalised for investing in your retirement?

I did not make any submission as I thought the auto enrolment policy would go a good way towards resolving the issue.

I am being penalised for my pension with my investment property as I am not allowed charge market rent and the value of my investment property is curtailed as its value is a multiple of its income which is curtailed because of the rpz legislation.

 

[Leo]

I did not make any submission as I thought the auto enrolment policy would go a good way towards resolving the issue.

I am being penalised for my pension with my investment property as I am not allowed charge market rent and the value of my investment property is curtailed as its value is a multiple of its income which is curtailed because of the rpz legislation.

That's not a penalty on your pension, it's a feature of the market you chose to invest in for pension purposes.

I assume you expect that property investment to be worth more than zero in your retirement and so you will still be better off than someone who did not invest in their retirement who relies solely on the state pension for income.

I've yet to see evidence of a property value being disproportionately affected by a below-market rent. Look at other threads on that topic, it is impossible to independently verify previous rents for a prospective purchaser or tenant alike. Had you been increasing rent by the allowed 4%pa prior to the freeze?

 

[The Horseman]

That's not a penalty on your pension, it's a feature of the market you chose to invest in for pension purposes.

I assume you expect that property investment to be worth more than zero in your retirement and so you will still be better off than someone who did not invest in their retirement who relies solely on the state pension for income.

I've yet to see evidence of a property value being disproportionately affected by a below-market rent. Look at other threads on that topic, it is impossible to independently verify previous rents for a prospective purchaser or tenant alike. Had you been increasing rent by the allowed 4%pa prior to the freeze?

It is a penalty on my pension as it not allowing the sector to function as a market.

If an investor looks at two identical properties and one has a rent of 1k and the other has rent of 1.5k which one is he going to purchase as an investment?

Yes I have been increasing by the 4% but I am 10% below market rent in one and 15% below in market rent in the other.

So yes my pension has been effected otherwise I would have more disposable income to invest in my pension.

 

[Leo]

It is a penalty on my pension as it not allowing the sector to function as a market.

It isn't, it's a factor of your choice to invest in a risky and dysfunctional market that is subject to increasing levels of government interference.

If an investor looks at two identical properties and one has a rent of 1k and the other has rent of 1.5k which one is he going to purchase as an investment?

Investors are only a small part of the market for second-hand properties. The significant increase in house prices of late is being driven by owner occupiers. Assuming you'd be happy to sell to one of those, and the properties are suitable, previous rents will have little impact on the price achieved. How many investors are really trying to nail down specifics on rent charged on properties they are looking at purchasing? Unless a property is being sold with sitting tenants (which usually tends to lower the value), and with no way for potential renters to verify previous rents, I'd imagine many are just purchasing and letting at current market rates.

Yes I have been increasing by the 4% but I am 10% below market rent in one and 15% below in market rent in the other.

So yes my pension has been effected otherwise I would have more disposable income to invest in my pension.

Why did you invest in property if you were not already maxed out on tax-efficient pension contributions?

 

[kinnjohn]

I always maxed out my pension contributions,

 

[The Horseman]

It isn't, it's a factor of your choice to invest in a risky and dysfunctional market that is subject to increasing levels of government interference.


Investors are only a small part of the market for second-hand properties. The significant increase in house prices of late is being driven by owner occupiers. Assuming you'd be happy to sell to one of those, and the properties are suitable, previous rents will have little impact on the price achieved. How many investors are really trying to nail down specifics on rent charged on properties they are looking at purchasing? Unless a property is being sold with sitting tenants (which usually tends to lower the value), and with no way for potential renters to verify previous rents, I'd imagine many are just purchasing and letting at current market rates.


Why did you invest in property if you were not already maxed out on tax-efficient pension contributions?

When I invested it was not a dysfunctional market, state interference has made it that way.

State interference is why small investors are no longer investing in property. Owner occupiers are only the larger % of the market because of legislation. Remember since the pandemic bank deposits have increased by €12bn. With low interest rates I am sure some of that could have found its way into property investment had the state not made it so unattractive.

There is a way for new renters to verify previous rent. I adhere to the rtb legislation as do alot of landlords.

I invested in property when returns were good so I could diversify my risk, the additional income from property had the market been allowed function like any market should would have allowed me increase my pension contributions.

 

[Leo]

When I invested it was not a dysfunctional market, state interference has made it that way.

Many would argue we have never had a properly functioning rental market here, it's an area that has been subject to more and more government intervention for the last few decades.

State interference is why small investors are no longer investing in property.

Again, investor demand is a minor factor in the sale price for second hand property. Property prices have continued to rise over the past few years, so your suggestion that the value of your property is suffering due to government interference in the rental market isn't supported by property sales prices.

There is a way for new renters to verify previous rent. I

How do they do that?

 

[The Horseman]

Many would argue we have never had a properly functioning rental market here, it's an area that has been subject to more and more government intervention for the last few decades.


Again, investor demand is a minor factor in the sale price for second hand property. Property prices have continued to rise over the past few years, so your suggestion that the value of your property is suffering due to government interference in the rental market isn't supported by property sales prices.

How do they do that?

A market price is where supply equals demand. That is the characteristic of a functioning market. State interference is why its dysfunctional. HAP has put a false floor on rents and the rpz has put a false ceiling on it.

What proof do you have investor demand is minor. If an investor were to bid on a property then it would increase interested parties and therefore increase price. Recent media attention has shown institutional investors out bidding other purchasers. This very concept would also hold true for individual landlords if they could make a return which would offset the premium they pay to out bid an owner occupier.

Investor activity is only minor because of state interference. Logic would suggest if you can get a return on investment higher than that in a bank some of the extra €12bn on deposit would find its way to property investment.

The rtb has a record of rent charged. This is why landlords are required to update the rtb site with the new rent levels on a property. Which is what I do automatically.