Stamp duty is a mobility tax.

Rant

Stamp duty in Ireland is a mobility tax. It borders on evil and should be banned.

charging large a percentage up front means that people are forced to hold property for long periods.

It places an unfair burden on property owners, a burden that by right should be shared amongst the whole of society and not just those who purchase property.
Stamp duty

Stamp duty is unfairly structured and creates layers artificial layers within the housing market

Allowing First time buyers (or any other special interest group ) to avoid stamp duty is stunningly unfair. This will be become more clear later in the down turn.

If the government wished it could base the tax over the life of an average mortgage, with repayment on sale or gifting of the property.
(the gov could issue some bonds to cover the temporary short fall incurred)

It could just charge a tax per annum, based on property values.

It could just charge a sales tax to the property seller not the buyer ( clearly some grandfathering would be required)

Stamp duty is was never intended to bring financial hardship to the general public, and this unintended consequence should be rectified

I shall say it again .

Stamp duty is was never intended to bring financial hardship to the general public, and this unintended consequence should be rectified

rant over feeling a little better.

7/10. Good rant. More anger needed for maximum effect. Stamp duty as a mobility tax is going to become much more evident as negative equity and the demise of bridging loans means that more houseowners end up being unable to move.

Stamp duty is necessary. Other country with bubbles such as NZ has forums where people are screaming out for such a facility. If you remove stamp duty houses will be the same price. Same thing happens with any incentives. How can allowing FTBs one chance to avoid stamp duty be unfair.

I do agree though that stamp duty does stop liquidity of the market. Perhaps a property tax over the lifetime of a property could be more egalitarian if it was worked properly to avoid a poll tax scenario. Definitely taxing empty property should happen.

Income tax was never meant to be permanent yet now it is. All taxes are unfair in my book but to argue for one to be reduced you have to either
a) Say who should pay more tax to make up for it or
b) Say what will be cut to pay for it

There is negligible tax on property in this country. Incomes are taxed, investments and savings are taxed yet property taxes affect few property owning people. Why is that? There’s a good argument for a property tax replacing stamp duty, but I can’t see any government imposing this unless the public finances really dry up.

Stamp duty is a transactional tax and should be flatrated. However, doing it now is a waste of time. The property market needs to stabilise first.

Hear hear! Having lived and worked in the States labour mobility (compared with here) is striking - it is simply the norm for people to move across states, and across the country, to find work and to progress their careers. This kind of mobility is good both for the economy and for the individual. Stamp duty is a huge impediment to this kind of dynamic labour market in Ireland.

So if we are correct about what lies ahead (property crash coupled with economic slowdown and job losses) … we are faced with the vista of young families in far-flung, poorly serviced suburban sprawl (thinking particularly of Dublin’s so-called suburbs like Gorey, Carlow, Drogheda etc), heading into negative equitity, and then if they are unlucky enough to loose a job, finding themselves unable to commute to the next job that comes up. Given the woeful state of our transport networks, distances that really should be commutable in this country are not. So we’ll have people who want to and need to work, but can’t move house to get the work because of the crippling levels of stamp duty?

To prevent this we have to phase out stamp duty and phase in an annual tax of some sort. But as usual political action will probably only be taken once this has become a massive problem… the ususal shutting the stable door stuff!

c) Find an alternative source of revenue.

When the state wishes to zone agricultural land for development, it buys
the land, zones it and sells it to the highest bidder at the huge profit that previously went to individuals who manager to get land zoned (sometimes by questionable means.

Putting the profits into state coffers removes the temptation for corruption (no point). And finds an alternative source of revenue removing the need to stamp duty.

Can never happen. Land owners can use zoning to generate more profits than the land ever could, and politicians like the brown envelopes and other “tips” a little too much.

-Rd

Exactly right. All taxes are crap. But as taxes go stamp duty is not too bad.

DIRT tax is the most disgusting and wicked tax that was ever devised. It punishes people for being virtuous and saving money in bank accounts, which happens also to make money available for reinvestment in the economy instead of consumption. Should be repealed immediately.

It always amazed me that in the government’s decentralisation plan, the unions did not demand that if a person had to move house because their job was being moved, they should not pay stamp duty.

step 1 is very simple - no stamp duty on PPR

A part of me can’t help but think that if we also had no stamp duty on run down houses we would have Sarah Beeney on TV3…

I would agree that SD is wrong, as it penalizes mobility and having children. It also contributed to bubble as people would have to sell house at inflated price just to nominally break even. Taxes are not avoidable, but current agreement is that they should not penalize positive things in society. For example in my country general public is unhappy with applying VAT to ceratain charity donations - it is same case as with SD. I think that people should own houses, and property taxes (SD or annual value based tax) are just another obstacle of owner occupiers. It would be better to tax all personal captial gain on property with PAYE/PRSI in my on opinion, as that penalizes greed, not house ownership. In my opinion, a tax on outstanding loan that is secured against the house, would be also nice option.

Totally agree with evilcart here.

Am still smarting from paying nearly 30k stamp duty last year. :frowning:

We were very unhappy where we used to live and it felt like we were being unfairly taxed just because we wanted to get out of a desperate situation.

I’m not a business person, so I don’t understand the overall rationale beind stamp duty, but I would have felt slightly better about paying a taxation on the house we were selling rather than the one we bought.

There should be a local property tax (rates) that go towards funding local government.

There are a few reasons for this.

  1. Without a clear local tax, local government will never be taken seriously. Currently, LG is financed primarily by corporate rates, and motor tax. Businesses don’t get a vote, and the average Joe never associates their motor tax with local government. As long as people don’t associate LG as having a direct cost on them personally, they’ll not pay much interest in what local representatives do and will always look to central government whenever they identify a problem (even if it’s LGs responsibility)

  2. There should be a tax on property because ownership of property imposes very real external costs through environmental pollution, the costs of servicing the property, the cost of traffic congestion etc…

  3. The tax could be structured in such a way as to encourage people to live in certain areas for planning purposes. (eg Lower taxes for people who live in designated urban centers (or villages) and higher taxes for one off houses) high taxes for excessively large houses, lower taxes in areas where there is a need for rural regeneration or in sustainable developments

  4. It would discourage the kind of speculation that destroyed the property market (buy a house, leave it empty for a year, and sell it for a 40 grand profit)

  5. It would reduce the burden of local taxation from commercial business, especially micro businesses like B&Bs and corner shops who currently have to pay very high rates relative to their turnover.

  6. It could free up road taxes to be used to improve road networks and save lives. (even basic things like white lines, road signs and cats eyes that so many secondary roads (and even national roads) are lacking.

  7. Secure independent financing of local government would be beneficial for Irish democracy. Currently Central government has a strangle hold over local government. They need to be more autonomous, and also more accountable.

Double taxation is the way of things by our current run of governments:

Buy a car you pay VAT and VRT
Buy a house you pay VAT and Stamp Duty.

Remember that for whatever is a 300k house on the market, much like cars, a huge percentage (around 25% of the final cost price) goes directly to government on tax. Introducing “property” tax or whatever, would be a third tax on houses/homes.

It’s a free market for everyone, as long as everyone is a registered corporation and not an individual citizen.

stamp duty is biased to every one except the developer.
this is why there was a huge increase in buiding property in this country and anyone wanted to avoid stamp duty would opt for the new build. this is a total distortion of the market. i know people who sold and went for new build again avoiding this punitive tax. it was always a tax loop hole for developers to sell more property.

If that referred to my post, I should have said before, but I would only support a local property tax if it was accompanied by the abolition of stamp duty. (or at the very least, an equivalent reduction in taxation elsewhere)

I disagree. All income should be taxed. Why should someone with 500K be able to generate tax-free income through the virtue of having a large wad alone? The savings aren’t being taxed, only the interest after all.

For a start, for most people it’s double taxation. Taxed income is saved and taxed again. Secondly it is inequitable - why should bank deposits be taxed and not (as this topic covers) property assets?

It’s not being taxed again, the income it earns is being taxed.

Secondly DIRT is fantastic, if it wasn’t for DIRT you’d be paying marginal rate income tax on deposit interest (because income from interest is still income and thus would be liable to income tax if the DIRT exception did not exist).

And thirdly, I disagree that it’s the worst tax, I’d say employer PRSI is worse. Quite literally, a tax on jobs.

The probability of there being “stamp duty reform” mkII is infinitely times higher than there being reform of tenants’ rights.

You got it there AAW.

I’d prefer the current system of one-off stamp duty – at least after the one-off payment you’re done and dusted with the gombeen bureaucracy. Imagine if there were property taxes and council rates – there’d be no end to the chopping and changing of the rules, not to mention the gimps with clip boards and hi-viz jackets knocking on your door asking questions.

Local governments ought to be weened off money: give them back the power to apply council rates and it’ll be an absolute free-for-all for them and their mates. All county councils should be halved in size and the money saved spent on training as many new doctors as possible – drive the wages down to sensible levels and stop this 600 points baloney.

As D&D said, only the income generated by the savings is taxed. The flat 20% rate is very generous anyway. You can even get it on EU deposit interest.
Property tax is distinct from a debate about income tax though. A property you live in isn’t generating you any income.