Why I'm in favour of a properly constituted property tax

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Purple said:
The facts are the we have the highest marginal rates of tax in the EU and amongst the highest VAT rate (maybe the highest?) and despite the fact that 60% of our wealth is in property we don’t tax it in any meaningful way.
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Perhaps that will change at the introduction of a property tax.
 
dereko1969 said:
I'm sorry for your current situation but frankly I don't believe that the lack of a property tax had anything to do with your decision to purchase an apartment.
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Yes, but if there was a property tax the apartment would have cost less. In that sense it's unfair but so is any change like this. If property tax is removed in the future then prices increase and so it will be unfair on people who buy just after the change.
 
truthseeker said:
Perhaps that will change at the introduction of a property tax.
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Yes, maybe it will but I don't see this as a bad thing. I'd sooner see wealth invested in areas that create employment and generate more wealth. Property does neither in fact in the long term high peoperty prices costs jobs and reduces productive employment.
 

Actually thats not why for me. Its because management fees + property tax would have pushed me beyond my comfort zone. I was already right at the edge of my comfort zone with management fees.
 

Either do I but we need a properly regulated rental market.
 
I live in an apartment and pay over €2k maintenance fee's, the council has not taken over any part of our estate and our own landscaping co have to do the verges outside the est as the council could not be bothered. We pay for all our services, and have no public transport- even during the snow our roads were not gritted etc (Dublin address). I have not been able to afford my fee's this yr, and a property tax put on next year will just cripple me! However I am employed, and am meeting my mortgage payments so there is no way as a tax payer I will be "exempt" as this charge will come straight from my pay packet!

Negative Equity, no option to sell and more than likely the valuation will be much higher than the actual market value!
 
dereko1969 said:
I haven't read his article but the part in bold was actually a recommendation from the Commission on Taxation - a €75 tax credit for anyone who gets a valuation from an auctioneer.
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It gets worse!

That said, I'm not surprised. When a Commission on Taxation is set up with all sorts of vested interests on board, but few if any of them tax experts or specialists, the results are likely to be odd.
 
truthseeker said:
Its clear you cant see where Im coming from.
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I totally see where you are coming from – you are forced to pay a tax that you feel you have no hope of escaping from. I feel the same way about the levy on pension funds – there had never been such a levy so it was not in any way foreseeable but there is no escaping it – it’s like shooting ducks in a barrel. I’m not putting another cent into a pension product but my existing pension fund will lose 2.4% over 4 years and there’s nothing I can do about it. I don’t like it. I am not in favour of it. I think it is unfair. But there is no escape.
truthseeker said:
I wouldnt have bought a property if there was a property tax. But now (due to negative equity) I have no way out of being liable. Its fundamentally unfair.
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It’s a bit hard to believe that you were okay with management fees (couple of thousand per annum?) which could go up (perhaps largely out of your control) but a €100 property tax would have made you not buy the property? Property taxes are a feature of nearly all developed economies so it was not inconceivable that they would be introduced here. And equally hard to believe is the idea that people would be selling their houses purely to avoid the property tax – I haven’t heard anyone talk about actually doing this. So if things had panned out the way you hoped and you were now sitting on some equity in your property, you would sell to avoid the property tax?
 
orka said:
It’s a bit hard to believe that you were okay with management fees (couple of thousand per annum?) which could go up (perhaps largely out of your control) but a €100 property tax would have made you not buy the property?
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No. My fees are now just below a thousand and the first years fees in a new development are always higher (there are initial set up costs that dont recur) so they went down from just above 1000 (as I expected) in the first couple of years, and have continued to go down as the management company (in which I take an active interest) seeks competitive contracts and has gotten rid of or lessened stuff which residents felt were fairly useless over time.

And I didnt think we were talking about a 100 euro household charge which would not have changed my mind, but a full blown property tax for which figures like 1000-2500 are being bandied about in the media.

orka said:
Property taxes are a feature of nearly all developed economies so it was not inconceivable that they would be introduced here.
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Im not an economist. Im not an expert on taxation. It was not something I conceived of or was on my radar at all at the time.


Well depending on how much it is, yes. I dont deem just under 1k in management fees plus, say 1k, in property tax to be worth the small apartment I live in. It adds around 70k over the term of the mortgage. Just not worth it to me - at all. My estate will never be taken in charge by the council, so I feel like its double paying. If I had some equity I would sell up and rent or buy somewhere without management fees (hypothetical situation where I have an income etc...)

My father in law (who does have equity) may well have to sell because he owns a reasonably large home but has a very very low income, so he may not be able to afford a property tax.
 
I entirely understand truthseekers position. However, whether one owns or rents a place the cost of the property tax will be borne by both parties -immediately by the owner but also -eventually- by the tenant in the form of increased rents.

If tenants think that every increased charge -NPPR, PRTB,BER,property tax -will continually be absorbed by the LL they are sadly mistaken.
So, owner or tenant, at the end of the day everyone pays.
 

My point was I felt I was paying a property tax and now we are being asked to pay a property tax again. I understand your point, the site may well have been more expensive if this tax wasn't in place, but that's not what happened, what happend was a paid a property tax.

When I compare it to the uk which would have been a 3rd of the tax cost and I took into account there was no ongoing council tax after that to pay so felt it was a fair and affordable at the time.
 
T McGibney said:
It gets worse!

That said, I'm not surprised. When a Commission on Taxation is set up with all sorts of vested interests on board, but few if any of them tax experts or specialists, the results are likely to be odd.
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Whilst there may have been some "vested interests" on board, do you really think it was them that was doing the work?

The people who actually did the work are/were Revenue employees with years of experience. And in fairness an awful lot of the board members have good relevant experience (even though there are the usual IBEC/SIPTU heads also), see here.




What exactly do you find "odd" about the Property Tax elements?

Nobody seems to have even mentioned the fact that stamp duty for PPR purchasers will be abolished if this recommendation is followed. Is that not a good thing? Moving from a transaction tax which in a moribund market can be a disincentive to purchase to an ongoing annual payment.
 

I think you answered your own question there. The Commission on Taxation was a pointless exercise if it merely involved Revenue staff re-cooking their own ideas for a table of academics, so-called social partners, economists and a few tax professionals.

I thought their idea of a tax credit-based subsidy to the auctioneers & valuers to be odd. Utterly bizarre actually, when I consider the origins of the current crisis.
 
"Nobody seems to have even mentioned the fact that stamp duty for PPR purchasers will be abolished if this recommendation is followed. Is that not a good thing? Moving from a transaction tax which in a moribund market can be a disincentive to purchase to an ongoing annual payment."

I hadnt heard that the stamp duty removal from PPRs was part of the overall proposals. If thats the case Id be a little happier with the property tax.
It this likely?
 

The staff in the normal course of events implement Government policy, whilst working for the Commission they were free to examine all sorts of issues that they normally wouldn't have, they had a blank sheet of paper. Perhaps reading a bit more of it might enlighten you.

The use of the tax credit was to find a cheap way of gathering price information and I think was a fair enough idea, rather than spending millions on a valuation database. I really don't get your "origins of the current crisis" jibe, was it really the fault of valuers and auctioneers?
 
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