In the previous three elections, there have been calls for the Government to sort out house prices - the studies by Peter Bacon et al at the request of Minister for Housing Bobby Molloy probably being the most notable development.
Is the current inaction by the Government the perfect solution to the problem! If the government does nothing in the area of housing, and house prices continue to fall at a gentle pace over the next five years, can the government ever claim in 2012 that they sorted out house prices?
What do the electorate really want, house prices to keep falling to restore our economy to normality
house prices to start to rise again?
The survey in last sunday’s Irish Independent about stamp duty would have me believe that the majority 71% want house prices to start to rise again.
So which is desired Government action or Government inaction(including no changes to Mort interest relief)?
The biggest weapon a country has is interest rate control to ease the crash. Plain and simple. We dont have this. I really dont think stamp duty changes have a real impact (forget CFI calls, they have no clue, moron former builders in suits) nor the reintroduction of first time buyer grants next year when the crash really bites.
The sizeable decreases facing future home owners are overwhelming compare dto micky mouse fiscal measure that can be proposed by the Biffo and Co IMHO.
Inaction or any action…I believe the damage is done…to maintain sustained growth would have perhaps made sense about 5 years ago, but the current climate that has been created.
I don’t believe that government complacency is ever a solution to a problem, in fact it helped create this mess.
Continued complacency will just see the effect of this crash magnified which might result in recession.
However, I would see FF capable of lobsided action, i.e. action on reducing stamp duty as enforced by their builder buddies…As discussed in a different topic…I believe this will have little or no effect.
I don’t think that a change in stamp duty will have as dramatic an effect on the market if it is a change the the basic structure and done so in a well planned way.
The change in the 2005 Budget caused most houses that previously had a value of between €270,000 -€ 310,000 to jump straigh up to €317,500 that is a masive jump in one day. All these properties where now worth the same amount, that is not fair to the person who is selling a house that has been really nicely done up and there neighbour who has done nothing to their house since the 50’s can sell their house for the same amount. Likewise it wasn’t fair for the FTB who ended up buying the 1950’s house that had not been touched up.
The current system is v unfair and needs to be sorted. And I am not just talking as an EA but as someone who has switched job and can’t afford to move closer to my new job because of stamp duty and now I ad to the daily car park that we call the M50
That’s all very well, but there are lots of things that are unfair in our taxation system. If you want action on a specific issue, you should either say which taxes you will raise to compensate or where you will make cuts. We’ve seen the CIF come out with the stupid statements about “cutting taxes raises the amount raised” as if they’ve just read a first year economics book so that won’t cut it.
At a time when we can’t even afford to replace nurses who have retired, it seems a bit rich for property owners and builders who have done very well lout of the past few years to be complaining about their burdens.
They don’t need to cut the percentages, they should band the tax, that will get rid of these invisable price floors and cielings and make it more just. further more an increase in activity in the area could increases the total amount raised by the tax along with increasing VAT take on all associated services got to do with moving. the last change was a misguided PR stunt at election time. I recently sold a place to a FTB for well over €1,500,000 and that person will pay no stamp duty, i am sure that is what the Gov wanted to do when totaly getting rid of stamp duty for FTB’s
0 - 250k no stamp duty
250k - 500k 5% Stamp duty only on the amount paid over the 250k
500k - up 10% Stamp duty only on the amount paid over the 500k
Sorry, you haven’t answered my question. You say it “could” increase the amount raised by tax. If it doesn’t, what should we cut back on or where should we increase taxes? Tell me which hospital you would close or how much you would take off the pension? Or else tell me how much you would increase income tax by.
Then tell me why the property industry is more deserving than our health services or our pensioners.
Just a wee idea:
the gov could also charge a flat 15% stamp duty for all investors which they could get back slowly but surley by offseting half of it against their rental incom tax and their CGT when they go to sell it as long as they hold on to it for a period of more than 10 years to only have gunine BTL investors and to rule out property speculators who want to flip property.
Plus they could properly close the gate on licencing agreements and look into people claiming to be owner occupiers to avoid CGT on fixer uppers and courner sites.
other than that’s the area i work in, what other reason do i have to give.
increasing taxes doesn’t always increase income from that tax. look at the Luxery tax on posh yaughts. it didn’t work. sometimes a fairer and not necisarily lower tax can encourage activity in an area and actually reduce the tax take.
I am not the only person who would move if it wasn’t for the 9% stamp duty that i would probably pay. however if it were fairer and gradualy went up to 9% i might move.
The stamp duty tax is a bit unusual by international standards in that its effectively a tax on moving house. And theres no compelling social reason why you would tax moving. If you want to tax property why not tax all property owners once a year.
The reason is to do with the psychology of taxation. A compulsory property tax, payable every year by everybody would be politically unpopular in Ireland, whereas a once off tax where the payer has to opt in to paying it, by choosing to buy a house, affects only a minority of people at any one time. Therefore it cannot mobilise large numbers of people against it, like the poll tax riots in Britain, in the 80’s
Totally agreed - and additionally, CGT should apply to all property (maybe at a lower rate for owner occupiers than for investors though). If you get taxed on profits from choosing to earn more money, you should certainly get taxed on profits from holding an asset that you choose to buy.
Of course, people in britain are still paying council tax, which is still a property tax (except based loosely on house value, not number of occupants).
That would have no dead weight loss: no negative effect on the market. but it is unjust as little old ladies who have lived in an area since year dot like Ringsend would pay the same as the guy who just moved there because of its new gentrefied status where rich people can live.
seriously it is equaly unjust to tax people for moving because they are after changing job or family situation.
The good side to that kind of tax is that it raises revinue withouth directly effecting the market in which goods or in this case houses are sold but it isn’t just.
as mentioned above if your granny is asked to pay a tax that roughly relates to the value of your granny’s property then if an area shoots up in price in relation to another area after a load of posh gits have moved in, your granny could be forced to sell her home because she can’t afford the tax. look at the areas like Ringsend Pearse Street, Railway and tramway cottages dotted all about dublin
Stamp duty isnt fair but its very easy for the revenue to collect, thats why the government like it.
Can you imagine how difficult it would be to get irish property owners to shell 1000 euros once a year like with Britains council tax. There would be hundreds of refusniks in the courts. What would you do to them, fine them or put them in jail. Fianna Fail would never implement such a property tax.
Stamp duty is such an easy tax to implement. It goes on someones mortgage, end of story. Theres no way stamp duty is going away, any time soon.
That penalises the people who have to move because their employers have changed loctaion, or who have had to trade up because they need a place that suits a family, it also would stop older people who bought their places for 10 k in the seventies from trading down when their kids have made like a fart and got out of that hole.