Sorry that I cannot link to articles immediately here but RTE has been sending out multiple headline articles over the past number of days, most importantly statements by Brian Cowen that in essence how he is regretful that a property tax was not introduced to cutail or limit the property boom.
The issue that I have is that a property tax is NOT the method that should be used to limit the boom in property but that instead there should have been methods to restrict borrowing, speculation and devious practices such as usery that would have easily and effectively minimized the craziness that’s been going on.
I belive that there is actually a likelyness of influincing the masses here throught the propoganda machine that a Property Tax is good and it will fix the madness, rather than through other more proper mechanisms (sensible borrowing structures, proper regulation etc.).
Anyone else see and feel this message coming out through RTE in recent days?
Anyone else see that this is the begining of a general property tax in the next year or so?
What the government needs to do is stay away from the property market altogether. Government interference such as tax incentives to developers, rent supplements (read subsidies for landlords) and mortgage relief (which was often taken into account when considering how big the mortgage would be) all encouraged speculation, taxpayer sponging and realising misguided fantasies (finally I own my dream home!)
Ahern has just admitted that property incentives should have being abolished earlier.
I’m talking about direct taxation applied upon those who own property, including their own PPR (Principal Private Residence).
I believe that governments are essentially defunct in the main, they serve the main purpose of benefiting those at the top with exhorbitant payments, either throught taxation or borrowing or both.
But back to the current situation being that the government I believe is due to introduce standardized property tax on all homes, PPRs as they would say, shortly. It was just that way that they (i.e. the RTE propogandists as per the instruction of their civil service masters) put out a news clipping of Brian Cowen suggesting that property tax was the cure to the economic troubles that have occurred here.
I see this as a staging exercise and one that is bad for everyone who lives. Damn it this government can get away with anything here and nothing is done about it. The people who work in government (as I do) and mainly to blame!
Haven’t people already paid enough tax on their property? How much have they paid in VAT and stamp duty - excluding first time buyers? In fact, any more taxes on property would further the case for renting. Even if the government brought in taxes for property, that wouldn’t necessary stop bubbles from forming in other asset classes.
Property prices in Ireland are mostly a derivative of credit availability, and we’ve had access to cheap credit for a decade thanks to the Bank of Japans, the Federal Reserves and the ECBs loose monetary policies of printing money to hold down interest rates, this led to the carry trade, securitisation and exponential growth of exotic derivative instruments that exponentially blew the debt bubble up.
Property such as land and buildings are not portable, so they are an easy mark for a government seeking yet more revenue now that capital gains and stamp duty revenue from property transactions continue to shrink. The assertion made by political parties across the spectrum that property tax would have curtailed or limited the boom has no basis in fact, you only need to look at the example of the property boom in the United States where they have property taxes to see that this is an outrageous lie. There is also a myth that property taxes are a stable source of revenue, but as the United States example has shown this is also untrue.
No they were much to blame as FF. The opposition have a role to do when they are in opposition and that is to call the government out on their policies. Neither FG nor Labour fulfilled that role when it came to the governments economics policy.
In 2007 Enda Kenny promised to reduce stamp duty to reinvigorate the housing market which was beginning to stagnate. By then a lot of people realised our economy was on the brink of collapse.
In 2007 the then labour leader wanted also want to reform stamp duty making it easier for people to buy houses.
Both parties wanted to lower taxes and increase public spending. In fact, when you lower taxes you also need to cut back on public spending.
Clearly these parties hadn’t a clue on the direction of the Irish economy.
Their sh!t might smell nicer than the rancid odour emanating from FF, but, there were FG & Labour county councillors involved in planning decisions across the country, so they cannot claim to have totally clean hands. They operate within the same political framework as all other political parties in this state, they either cater to clientelism or they don’t get elected.
as much as it kills me to admit it!
Anyone remember back a few years ago when the Revenue Commissioners said they would chase adults for Capital Acquisitions Tax/(first time buyers reliefs etc)
in case where their parents had put their names on the mortgage/deeds in order for the mortgage to be approved. Instead of the opposition saying that the Revenue Commissioners were correct according to the law, the opposition from my memory rounded on the Revenue Commissioners.
How many Labour councilors have been before/implicated by tribunals? As to whther they would have one the same thing, well, we will never know. Personally, I think the country would be very different now had FG/LAB hel on in 1997. But that’s just an opinion.
It doesn’t look like they’re going to get this right either. At the very least, they should be making clear their intention that:
(a) this is to be a Land Value Tax rather than a Property Value Tax - there are very many reasons, but the most easily understandable reason is that taxing the buildings doesn’t encourage the building of high value worthwhile buildings - which has many knock on effects related to quality of housing and employment etc.
(b) that the intent of this tax is designed to take the weight of taxation away from labour (and onto land) - thus incentivising and encouraging productive work and labour etc.
(c) that the intent of this tax is to ensure the most productive uses of land relative to where the land is located eg. urban, rural, agricultural etc.
But no, they’re just going to slap on a flat ‘property tax’ on top of everything else, and further stoke public sentiment against a taxation model that actually contains many solutions to this country’s woes if one intelligently appraises the model (of land value taxation).
EDIT - I wonder are they purposely trying to confuse the two taxes (land value tax and property tax) in the minds of people to further their own rent-seeking interests?
The property tax is an easy target but that shouldn’t deter the government. In a country where 50% of the workforce pays no income tax the money has to be collected from someone. It would be very un-popular to take the money from old age pensions / dole payments / taxing low paid so the middle classes must make up the difference by paying more…
A flat rate tax is most likely, though it is going to be more than €200 when the dust settles, I would think €750 tp €1,000 would be required per household.
Of course it won’t apply to the tinkers they are a cultural minority, with a seperate legal system. Nor will it (or even a reduced rate) apply to those on social welfare, even though they benefit most from government spending.