Taoiseach: "Possible ban on evictions during energy crisis"

[wondering]

So power supply employees, truck drivers, Irish Water employees and other essential workers should also get these tax breaks as they are providing essential services?

None of those charge the consumers directly.

There should be 0% tax on long-term rentals
--Why?

It would bring down the price of rents because the landlord wouldn't have to factor tax into the price. (Assuming an otherwise functioning market. In the current mess, who knows.. it would probably have no effect until supply increases).

 

[Purple]

None of those charge the consumers directly.

So what?

It would bring down the price of rents because the landlord wouldn't have to factor tax into the price. (Assuming an otherwise functioning market. In the current mess, who knows.. it would probably have no effect until supply increases).

The market sets the price of rent, not the taxation system. If demand, supply and the capacity of the purchaser stayed the same then the rents would stay the same. All your proposal would do is increase the net income of the landlord.

 

[Mocame]

Scotland is experiencing a student housing supply crisis after implementing an almost identical set of policies to Ireland, including rent controls, stricter regulation of landlords and the latest one - a winter ban on evictions! https://www.thetimes.co.uk/article/student-housing-crisis-driven-by-scottish-greens-8t6z7qzfg

 

[wondering]

So what?

The landlord-tenant relationship can't be compared with, to take your example, someone fixing a power line's relationship to the consumer of the electricity.

The market sets the price of rent, not the taxation system. If demand, supply and the capacity of the purchaser stayed the same then the rents would stay the same. All your proposal would do is increase the net income of the landlord.

I do not have details off the top of my head of when property tax on rentals was increased, etc. I think it's fair to say that many landlords did factor it in as a cost and increased the rent because of it - in particular those paying a mortgage, whereby they would be left with little to no profit if they didn't.
I definitely remember discussions of this online (approx 7 years ago ?) where landlords shared that they would pass the cost of this increased tax to the tenant, with others arguing that this is wrong etc.


(Apologies for going off-topic with this tax issue. I should probably have started a new thread)

 

[Purple]

The landlord-tenant relationship can't be compared with, to take your example, someone fixing a power line's relationship to the consumer of the electricity.

Again, so what?
Getting rid of income tax on landlords won't decrease rents by a cent. The market sets the price.

I do not have details off the top of my head of when property tax on rentals was increased, etc. I think it's fair to say that many landlords did factor it in as a cost and increased the rent because of it - in particular those paying a mortgage, whereby they would be left with little to no profit if they didn't.
I definitely remember discussions of this online (approx 7 years ago ?) where landlords shared that they would pass the cost of this increased tax to the tenant, with others arguing that this is wrong etc.


(Apologies for going off-topic with this tax issue. I should probably have started a new thread)

Thy can only pass them on if the market will stand the increase. If supply exceeds demand then prices will stagnate or decrease.
If demand exceeds supply prices increase.
The landlords costs set a floor on the market, not a ceiling. If the prospective buyer can't afford the price of the product at the price of the input costs (breakeven price for the landlord) then the market shrinks.

 

[wondering]

Thy can only pass them on if the market will stand the increase. If supply exceeds demand then prices will stagnate or decrease.
If demand exceeds supply prices increase.
The landlords costs set a floor on the market, not a ceiling. If the prospective buyer can't afford the price of the product at the price of the input costs (breakeven price for the landlord) then the market shrinks.

Yes, that's basic economics.

The main issue as mentioned already in the thread, more than once, is the lack of supply.
Everything else is a distraction, including the eviction thing.

 

[The Horseman]

Again, so what?
Getting rid of income tax on landlords won't decrease rents by a cent. The market sets the price.

Thy can only pass them on if the market will stand the increase. If supply exceeds demand then prices will stagnate or decrease.
If demand exceeds supply prices increase.
The landlords costs set a floor on the market, not a ceiling. If the prospective buyer can't afford the price of the product at the price of the input costs (breakeven price for the landlord) then the market shrinks.

In a normal functioning market yes the market does set price but the rental market is not allowed function as a normal market because of govt interference.

If you want a balance extend rent a room to landlords. Once rent over a certain amount then tax it all. If kept under this limit tenants pay less, landlords are no worse off and both benefit.

Everyone says we have a housing crisis so during times of crisis the State offers support to deal with the crisis not the private sector. We did it during covid with the PUP we didnot expect businesses to pay employees when they were closed.

 

[T McGibney]

Getting rid of income tax on landlords won't decrease rents by a cent. The market sets the price.

You are of course correct in the short term but in the hypothetical case that landlords, new landlords or newly-rented properties were exempted from income tax for a stated number of years, I think it would be incontestable that at least some property owners who heretofore weren't tempted to let out vacant properties or to refurbish them to let out, would suddenly be tempted to take the plunge, and if enough of them did so, this should in time add to supply and help to defuse rents.

The fly in the ointment is that meddling politicians and third parties like the RTB have spooked landlords and potential landlords so badly that it will take a long time for a lot of them to regain confidence in buy to let as a viable business model.

So, for the moment at least, I agree that any tax exemption plan is probably doomed to fail.

 

[AlbacoreA]

I think tax is the minor factor here.

If the market wants lifetime tenancies and increased supply they have to make it attractive to get LLs into the market and stay long term. That doesn't always mean high profit margins. Its more likely to mean lower risk.

 

[valery]

I think tax is the minor factor here.

If the market wants lifetime tenancies and increased supply they have to make it attractive to get LLs into the market and stay long term.

For me the issue is lack of control over my asset. Control of private rental property from a landlords perspective is increasingly being ceded to the RTB which landlords fund. No proposals from government to deal with tenants not paying their rent, tenants overholding, anti social tenants etc.
The final straw for anyone thinking of entering the buy to let market should be Sinn Féin’s proposal that rental properties be sold without vacant possession.

 

[wondering]

Buy to let is fine if you want short-term tenants, airbnb, etc.

Buy to lets should probably not be catering to people looking for something longer-term (I hesitate to define that exactly, but say 18 months or longer).

Buy-to-let people can't always know how long tenants will stay. They could ask beforehand, or specify in their ads 6-months max etc. Some landlords tend to just assume they might stay 2-3 years max (in the case of singles). I think that's about average, but should not be assumed or taken as given.

Other landlords prefer longer-term, the longer the better to save hassle and cost of reletting. These tend to not be buy to let people, but who inherited the property or for whatever reason have no intention of ever selling the place.

So in general, I think buy-to-lets are a bad idea, for all concerned, unless you're a business-minded person, capable of decision-making, planning, keeping lets to short-term only, or unless you have no intention of selling in which case obviously long-term lets should in general be a non-issue.

It seems that many buy-to-lets these days, they have selling in the back of their mind even from the time of purchase.

 

[AlbacoreA]

People lie.

Life forces change on you.

 

[Simpli]

It seems that many buy-to-lets these days, they have selling in the back of their mind even from the time of purchase.

I think age plays an issue too. I bought a BTL with the intention of keeping it for 20 years, to pass on to one of my children. Im early 30's and it makes up 20% of my diversified portfolio. Bought it so I could claim mortgage interest against the rent.

 

[Groucho]

The RTB are a disgrace in how they treat landlords. They are a tenant advocacy body.

To be fair - and being fair to the RTB isn't easy for me! - I think that their biggest problem is that they are obliged to implement the Legislation as it stands. Thus, it's the anti-landlord elements of the legislation - as voted through both Houses of the Oireachtas by the usual blend of half-wits, cretins and brain-dead backbenchers, let's not forget - that sets the RTB's agenda. It can't apply common sense because there's no provision in the legislation for so doing.

 

[valery]

For anyone interested, the RTB currently have an online survey for “stakeholders who have experience of living in and providing accommodation in the rental sector“.

They say the results will be used in preparing their Statement of Strategy for period 2023-2025.

 

[AlbacoreA]

Link there... https://www.rtb.ie/news/statement-of-strategy-public-consultation-survey

 

[wondering]

If the market wants lifetime tenancies and increased supply they have to make it attractive to get LLs into the market and stay long term. That doesn't always mean high profit margins. Its more likely to mean lower risk.

There should be some vetting done by a third-party.

On the long term thing, they should incentivise based on time, similar to what was shared here

Just for the laughs, it's worth noting that there's a very generous tax exemption for income from long-term letting of farm land, up to €40,000 per annum. https://www.revenue.ie/en/personal-...and-and-property/leasing-farm-land/index.aspx

 

[AlbacoreA]

The idea of third party bonds (as exists in other countries) has been kicked around for decades.

Certainly some means to cool the boom and bust with property and buy to let is needed. The market probably has to move where a rental can't be chopped and changed between rental and LL 2nd home.

But some control and protection needs to be given to landlords whatever happens. A lowering of financial risk.

 

[T McGibney]

The market probably has to move where a rental can't be chopped and changed between rental and LL 2nd home.

Do you mean that if someone buys a property and rents it out, they can never thereafter occupy it themselves nor can a family member or someone else close to them?

 

[AlbacoreA]

You have to consider if in Ireland we have very short term mindset when it comes to rentals. We have the mindset that is temporary accomodation. But actually many people will rent for most if not all of their life. We also have the mindset that is not really a business premises, but the landlords personal accomodation. Temporarily borrowed by a tenant.

Is this really a professional approach.

Almost everywhere in Europe, rental periods tend to be longer than in the UK. In many countries, such as Austria and Norway, it’s three years; in Belgium, it’s nine. Though shorter periods are allowed, notably for furnished holiday lets, nine is the standard and if a shorter let exceeds three years in duration, it will automatically become a nine year lease, backdated to the initial period of the tenancy. In Germany, on the other hand, it’s illegal to write a fixed term rental contract; all leases are by their nature unlimited in duration. Indeed, most areas of the contract are covered by legislation; there’s not much room for negotiation on the part of either tenant or landlord.

How do rental markets in Europe compare to the UK?

As reform looms for the UK lettings market, The Negotiator looks at how the different European countries on the continent operate theirs.

thenegotiator.co.uk