An alternative way to stimulate the market

Might not fit Cuntry Toms remit but…

How about a property tax setup as such.

if one owns 3 properties, annual tax of 3% on all of them.
if one owns 4 properties, annual tax of 4% on all of them.
if one owns 5 properties, annual tax of 5% on all of them.
and so on up to say upper limit of 10% .

Tax to become effective on 31st December 2008.

I think that would make for a brisk autumn selling season. :wink:

Whats the % based on??

STAY THE HELL OUT OF THE PROPERTY MARKET!!!

The market it righting itself. Tax meddling in the market caused it to inflate too much, and Tax meddling now to either support it or depress it will ultimately cause the pain to be greater than it needs to be.

Just let the market be. Let it correct in it’s own good time.

-Rd

The value of the property. This could be determined by previous sales in that area

Calm down, the govt is already involved in the market, in it’s own good time could be a very long time.
Better for the country to get to get the crash over with as quickly as possible, think such a move would help bring this about.

I’m with dlatonr on this one - it is utterly a ridiculous economic strategy to manipulate the Irish propety market. Leave the god damn market alone, so it can find it’s own natural settling point. This Government has f#ucked up enough through their consistent incompetence.

Property ownership and being a landlord is a business. We need professional landlords to do well, and we need to quick buck merchants to go out of business. That’s happening.

What you are proposing is a tax that discourages the larger landlord with a lot of properties, and rewards the smaller landlord with one Buy To Let bought with equity from their PPR. This is the exact opposite of what we would like to achieve.

By any chance are you waiting for your chance to buy a house, and looking for a tax to speed up the decline in house prices so you can buy sooner?

If so then you’re proposing a tax to help a fairly small group (FTBs) at the expense of everyone else.

And when you’ve bought what then? This tax will be exerting a pressure that keeps the value of your house down. Will you realise then that it’s in the best interests of the economy to have this tax lifted?

-Rd

FTBs are one of the two meaningful groups in the property market, and actually the ones you want to help - the others are the final sellers, and since they will often take their money to another economy, helping them seems rather stupid. Trader-uppers / downers are just diluted FTBs / final sellers (although they are disproportionally hit for transfer taxes as well).

The proposed tax may well be in the best interest of the economy - property is primarily an expense and a horribly non-tradeable one at that, so keeping it cheap is good for everyone (in general). Just because some have hedged this expense, and some will actually benefit from this expense growing, doesn’t change the fact that it is an expense.

Frankly, I think it’s a pretty poor form of entrepreneurship and not one to be encouraged. The small island economy we live in will only grow through export led production. It’s much better for the long term economic viability of the country to encourage investment in these type of businesses than property.

Who is the “we” you refer to?
How do you differentiate between the quick buck merchants and long term landlords? To my mind investment and speculation are pretty much the same thing, people looking for a return.

I’m looking for the crash to be over as soon as possible, as I think this is the best for the country long term. Are you hoping it will be a long drawn out affair?

Hmmm, “everyone else”, what proportion of the population own three or more properties??
FTB’s a small group? Are you serious?
Given our cultural tendency towards property ownership FTB’s are pretty much everyone without a property.

For the vast majority of people a house is first and foremost a home. I think the tax regime should reflect this. The massive long term damage that has been done to our economy by the fixation with property is a shame. And part of the massive bubble was there being no impediment to large property ownership, young couples looking to buy a home were competing in the same market as speculators/investors.

Off topic but there’s an infatuation with exports in Ireland. In reality exports are part of the national production that you give up in order to buy imports. An efficient functioning affordable rental market is far more important to the national wellbeing/economy than a lot of the export industry.

I know what you’re trying to achieve. I think a quick correction would be the best think all round too. I’ve said it here lots of times.

I just don’t agree that using tax to achieve it is a good idea. Like most meddling it’ll do more harm than good.

Which might be why we already tax corporations at much lower tax rates than landlords who pay income tax.

If this little country is to prosper we’ll need a mobile work force and we’ll need to be an attractive place to set up shop. This means we need a strong and professional Residential Rental market.

Investors buy roulette wheels. Speculators play roulette.

There’s a difference between making house prices collapse quickly and having house prices revert to fair value quickly.

What you are proposing could cause house prices to overshoot as far on the downside as they did on the upside, and stay undervalued for a long time. That wouldn’t be a great state of affairs either. it would mean even more people in even more severe negative equity.

Regardless, we’re arguing over a hypothetical here. No government of any shade will ever introduce a tax (unpopular) which makes house prices fall (unpopular). It will never happen. EVER.

I’m just explaining why I’m glad it won’t.

If I could propose an amendment to your original idea.
Focusing your effort on taxing empty properties might be an option. Hoarding empty properties is not in the country’s interests since they serve no function.

Landlords providing a service, who’s properties are filled with happy tennants are indeed providing a valuable and useful service. They are as important to this country as Farmers, Doctors, Journalists, Truck Drivers, or Computer Programmers.

-Rd

From my understanding, as we are a tiny country poor in natural resources it is only through trade that we can really increase the wealth of the country. To be able to pay for our imports we also need to be able to sell our exports.

I’m not sure one can measure the difference in value to the national wellbeing/economy of the rental market versus the export industry.
So for arguments sake I disagree :slight_smile:

for there to be any capital for business people need to own property and property needs to have value. ie properties get remortgaged to create capital for business . some grow and become the microsofts or dells of the world.
if people think a utopia would be low property prices then then they are crazy and dont understand what property is or what it represents.

I would support an annual tax on empty properties (save maybe 1 holiday home).

There’s no point in getting homes where people are living and renting onto the ‘market’ as they are providing necessary shelter, if you have an empty property though you should have to rent it, sell it or pay tax on it. The tax could go straight to rental allowances for lower income families, thus ensuring that those who artificially restrict the market supply are the ones who pay for the increased rental rates.

That absurd. Property (if by property you mean land) is not Capital. You’ve never heard of the four factors of production (land, labor, capital, enterprise)?

Cash in the bank is capital, as are investment instruments. (I suppose a block of apartments is in the same category.) All of those instruments can fluctuate in value. So your capital value can decrease, regardless of the price of property.

Finally, to support a dsytopia with high and increasing property prices indicates that you don’t understand what society is.

Wasn’t very effective in the last decade if one compares how much investment went into property compared to other industries.

I understand, in a gold rush the shovel maker makes money, the pan handler might. Still say tis very difficult to differentiate the two over the past number of years.

To be fair that is just speculation, who knows how far they would overshoot, there will be negative equity no matter what.

I agree we do have a crowd of gutless wonders running (ruining) the country. I believe it is a tax that would effect a small percentage of the population so not sure how unpopular but yeah would have been better if it had been in place years ago, but to put it in place would be one brake against another bubble happening again.

I agree yeah thats a good idea, I also think a tax on undeveloped rezoned land would be a good idea.

I agree landlords are necessary but don’t think that makes them exempt from being taxed. In a country that through population growth alone was going to experience a housing boom, they only added fuel to the fire.

genki33 wrote:

A man/woman after my own heart.

-Rd

Oh, a Croke park going male, though i have watched Sex In The City. :slight_smile:

Ah! Croke Park tickets, now there’s something we need to bring down the price of, and it’s far more urgent than house prices.

All fine and dandy for these Waterford types who only have to buy an All-Ireland ticket once or twice every 50 years. Kilkenny people have to allocate an annual budget.

-Rd

Yeah but they only show up for the final so it’s about the same cost overall…

ducks for cover