Tax Treatment of Landlords has to be Revisited

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RonnieShinbal88 said:
Getting rid of existing small landlords doesn't reduce their market, it increases it.

Once supply is up they would be free to change their approach, but short term this creates demand.
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How could that possibly be the case? Fewer customers does not increase a market.
 
I would advocate either of these systems. Very simple to calculate and monitor and would be neutral across taxpayers.

Add to that a CGT exemption or reduction if you let a dwelling for >10 years and I think it becomes a much more attractive investment.
 
We had a French rental for 10+ years and engaged a dedicated accounting company to undertake all the fomalities with registering with the French treasury for the purposes of submitting an annual tax return to the French authorities.

As I understand it, there are two approaches available, the 50% approach you cite is for a French domiciled (tax domiciled) lazyman approach.
Alternatively, one can elect to submit a detailed return which effectively, depending on personal circumstance, can be reasonably expected to reduce the marginal rate to <40% or so, and possibly further depending on your depreciation allowances.

If you are a French non-dom, then the tax rate reduces further to ~37% to the best of my recollection.
 
Leo said:
How could that possibly be the case? Fewer customers does not increase a market.
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Because units rented out have higher occupancy than when they are sold to homeowners.
Let's say there is a rental and two couples share the property.
If the small landlord sells up to one of them, it displaces a couple.
You could also have people living at home with their parents and saving who might buy the rental, evicting both couples.

Converting rentals to owner occupied homes creates net demand for units.
At a time where we have a crisis in supply, it's insane.

Existing small landlords are not customers of builders they have already bought their units.

I'm talking specifically about what is being discussed here on why over the next 6 months/year/2 years would you not do soemthing to stop small landlords leave the market.

The only possible economic gain I can see from that is that it creates short term demand for new builds at a time when they are looking for subsidies.

I'm not saying this is without a doubt the motivation and there may be more than one reason why the government are not acting to stem the exit of small landlords. I am just struggling to see any motivation that is good for the country rather than the government and builders.

You are one of the few people on here who don't seem to think it's a good idea to incentivise small landlords to stay in until supply helps resolve the crisis but I can't make any sense of your position - you just seem to argue against anything put forward by landlords without attempting to address the issue of thousands of tenancies ending and people being evicted because small landlords are flooding out of the market.
 
RonnieShinbal88 said:
Converting rentals to owner occupied homes creates net demand for units.
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Not necessarily true. As per Census 2016 average rented household is 2.6 persons, average private household with mortgage is 3.4.

Of course the age, type of dwelling, number of kids, etc, is different. But I'm not sure that the typical transition from rental to owner occupancy changes the average number of occupants, at least for adults. Anecdotally I know of 2-3 person rental houseshares being sold to couples with one child or one on the way.
 
Another possible gain is that it increases short term demand for REIT properties and propping up that market might be desirable to house building Inc. because it would stop REITS dumping large amounts of properties and having house price drops around REIT redemptions.
 
It's the number of units left at the time of the sale versus the number displaced that matter. Your example might still create demand if a couple with one child were renting a 2 bed apartment before and displace 3 people from a 3 bed, then the 3 tenants wont fit in the free 2 bed rental and need another unit. Obviously it depends on buyers upsizing versus the rental they had previously (upsizing as planning to have kids etc./not wanting to waste money in rent in a large rental on their own while house saving, or people who were living with parents etc.).

I'm not surprised long term averages in owner occupier are high because people have kids, it's the displacement on purchase of the house that matters though here.

I had come across figures for this somewhere before but can't track it down.
 
Perhaps the current government know/expect/fear SF will lead the next government and so, landlords fleeing with the market will be to their ultimate benefit in the future. Say 2025, SF take power and the crisis is even worse. Landlords who wanted to leave the market should have done so by then and the attractiveness of the rental sector won't be there for new investment. SF will find it impossible to attract investment unless they give huge tax breaks to entice it back.......this gives FF/FG a stick to beat them with.

When we talk about stopping the exodus of landlords over the next 6/12/18/24 months, I think this Minister and the government are so inactive and incompetent that they are a lot more likely to impose an eviction ban (a lazy route of doing so) than do anything meanignful for landlords
 
SF have no interest in encouraging mom & pop landlords to stay in the game.

Up to few weeks ago, Eoin O Broin was criticising the Government for doing nothing to encourage small landlords to stay in the market (without saying what they should do).

However, in recent weeks the SF line on this issue has changed.

They are now saying that it is inevitable that these small landlords are going to exit the market and the State should be buying up these properties (where the money is to come from is unclear),

It is a subtle - but important - change in messaging that seems to have been missed by most commentators.
 
PebbleBeach2020 said:
basing the treatement of 170,000 landlords on the 80 or so TDs who are also landlords.....only in Ireland.
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I'm guessing that 80 figure went around on social media. That was TDs and senators and it included anyone with any declared property and land on top of a PPR. The figure for TD landlords which included "accidental" landlords and people renting out holiday homes seemingly was around 28. Above average probably - but not 80 TDs.
 
I noticed that too. This is a mad, mad policy. Local authorities can't even maintain the span-new estates they are building or buying currently. These are at least located in groups and are new so they should be easy to maintain but instead are left to run down for a decade or two and then a 'regeneration' is announced which actually involves concentrating all of the maintenance they should have done over the course of many years into a single year or two.

But Eoin O'Broin is proposing that local buy up older dwellings, presumably many run down or at least requiring upgrading, spread hither and tither. How are they going to maintain them?
 
SF policies are headline grabbing but there is absolutely no substance, logic, method behind them. If people genuinely believe that SF will solve the issues in health, housing, inflation etc they are incorrect.

Health needs a complete rethink and start afresh. Nothing else. And it needs cross party twenty year plan.

Housing needs to retain landlords. Get revenue (taxation) from reits.

And need to get rents down through a deal for tax reduction with landlords.

Populist building 100,000 social and affordable houses in 5 years is bonkers. In terms of materials, labour etc it's not achievable unless private sector building is basically robbed and ransacked. Which given the history of SF, is well within their capabilities.
 
As T. McGibney has stated the main problem is that rental income is treated as ‘passive’ / ‘unearned’ income which is treated differently by Revenue to for example, self-employment income. As I see it, in practice it is self-employment for smaller landlords and income not being eligible for pension relief is a massive issue. A smaller significant issue is the PRSI treatment of ‘unearned income’ where many will pay 4% at Class K for no benefits whatsoever. Whereas paying the same rate as Class S (self-employed) would provide benefits.
 
Royal Blue said:
A smaller significant issue is the PRSI treatment of ‘unearned income’ where many will pay 4% at Class K for no benefits whatsoever.
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I agree this is a travesty. It's Pay-Related Social Insurance that is levied on non-pay income and provides no insurance whatsoever.
 
Looking a bit more into rental tax rates around the world, I think I can say we've one of the highest rates in the world if the property does not have a mortgage, and you're on the top rate of tax already.

52% tax on income would push us close to the top, however it seems that countries with high income tax do try to incentivize rental by giving some reasonably generous reliefs to rental or else give lower rates than income tax.

If we have the highest rate of tax - that would be useful to know as it becomes very hard at that point to argue it does not have some relationship to our difficult rental market. Mortgage interest relief would be a valid counter argument - but a lot of properties are mortgage free.
 
RonnieShinbal88 said:
Because units rented out have higher occupancy than when they are sold to homeowners.
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Occupancy is of zero concern to developers, it has no impact whatsoever to their bottom line.

RonnieShinbal88 said:
I'm talking specifically about what is being discussed here on why over the next 6 months/year/2 years would you not do soemthing to stop small landlords leave the market.
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And as I've said a number of times already, the primary focus needs to be on improving supply. I'm not sure there is any measure that would be politically acceptable that would have a real and meaningful impact on the number of units available for rental. The government and opposition are committed to rent controls and security of tenure for tenants at the expense of a landlord's rights over their property, there's no prospect of that changing in the short term.

With a shortfall of 10's of thousands of units per annum, rental stock will continue to shrink as more and more people looking to buy homes and are willing to pay over the odds to do so.
 
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Leo said:
Occupancy is of zero concern to developers, it has no impact whatsoever to their bottom line. They only care about getting units sold.
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To simplify an example lets take a landlord selling a 1 bed and someone living with parents buys the rental unit.
The tenants are evicted and the property is off the rental market, the rental market demand increases one unit.
There is nowhere for them to go - government looks to builders to create new supply.

If a couple are in a one bed and they are planning a family and buy a 3 bed rental, 3 tenants are on the market but only one room is freed up in the one bed. There is a net demand for new rental units.

Not every transaction will result in an extra rental unit demand, but the net effect over 5000 units selling will be an increased demand for rental units. The alternative is that all of the upsizing transactions are offset by downsizing transactions, someone paying more in rent for a bigger place moving to a much lower mortgage relative to rent, buys an even smaller place - doesn't seem likely or tally with any of my experience.

It's much more likely that people renting are likely to be saving for house and will upsize later, people saving for a house might be living with parents and relatives etc.

I thought it was fairly uncontroversial that rentals going off the market reduced net rental unit availability and I thought I had seen the government refer to the same previously but I don't have any official figures.
 
In a nutshell Renters house share but owners are less likely to do so.
 
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