Will any stamp duty be collected in the coming three months?

The commission on taxation recommends the abolition of stamp duty and its replacement with property tax. Presumably all purchases of property that would incur a stamp duty charge will now be deferred until after the budget in december.

FTBs are not affected as they don’t pay stamp. However I can’t see any other houses in Ireland being sold until December.

You are correct , not least based on what happened this time 3 years ago when McDowell started mouthing about stamp duty .

This is likely to be announced in the December budget but may not take effect until the Finance Act in April 2010 .

Does anyone think that asking prices will rise ( by the stamp duty amount) or not ??

McDowell crashed the Irish property market! :smiley:

I’m guessing some form of stamp duty will apply to the commercial property sector though?

McDowell certainly *took the blame *for crashing the Irish property market ( in 2007 at the general election) because he was perceived to have introduced an uncertainty into a shaky market but he only mouthed off in response to a significant revenue drop that had occured over the late spring and summer of 2006 .

However it is nothing like this outright abolition proposal .

Only by truly mental (or brave) vendors.

No usually changes in stamp duty have applied with immediate effect from midnight day of budget.

Lots of sale agreeds will be trying to delay signing deeds now until the budget

The market had already popped before McDowells comments.
His comments certainly exaggerated the situation, but did not cause it.

I wonder, if there was anyone who didn’t buy in anticipation of a reduction in stamp duty, could it be said that McDowell prevented them from buying so near the peak ?

He made his comment in september 2006

archives.tcm.ie/businesspost/200 … y17437.asp

after it was abolished up to 317k for all FTBs in the December 2006 budget a lot of €299k gaffs were suddenly asking €317k . Mr A would not have been dealing with low end stuff back in the day and has most likely forgotten and there was no PIN or IPW back then so you gotta take my word for it lads . :smiley:

PIN started in June 2006.

That particular change in stamp was earlier then that 2Pack, probably 2005.

I agree with Mr. A’s analysis.

Actually it was later ( June 2007 backdated to March) , they only fiddled with allowances in December 2006 . The key point is that it had an effect on the market between September and the Budget and especially in Dublin given the prices there.

independent.ie/national-news … 37828.html

and the nub of it

You’re confusing the abolition of stamp duty on second hand homes for FTBs with the change in allowance up to 317k which happened alot earlier.

2005 at least, one of OW’s mates got caught up in it. Immediate reaction was to bid 317k.

Cue much gnashing and frothing of OW’s teeth.

It was shortly after that we banned him from talking about property in polite company and were reduced to this. 8)

That stamp duty change caused a jump in prices after the Dec 04 budget , it was the widening of the FTB exemption on a second hand home in 2004 from €190,500 to €317,500, thats the one yeah sorry. Referenced here.

historical-debates.oireachtas.ie … 40007.html

But the McDowell ‘uncertainty’ did not cause prices to jump , they cause the market to freeze in anticipation of big changes and the big changes were …Interest Relief doubled in December 2006 for FTBs and then FTB stamp duty was abolished in June 2007 ( backdated to March 2007) on top of that .

The essential point is that the STB/Mover/Investor market is likely to adopt a wait and see approach as they work out how the government replaces €2bn of stamp duty at peak and €200m or something now with a c. €1.5bn residential property tax instead . That market will freeze till the budget, I expect a lot of “n/a” data for the 3 bed semi in them PTSB numbers :stuck_out_tongue:

On a €400k house in Dublin you pay 0% of 125k + 7% of €275k or €10.2k now , that may be €0 in December .

To replace stamp duty with something reliable that is sustainable the government wants c.€1.5bn property tax divided by 1.95m houses or an AVERAGE tax of €770 per home in Ireland in 2010 and water charges on top of that again .

Note !

That’s properties not houses right? What’s that based on, connections?

It’s all a cunning plan by Lenny to make sure that there is NO market in property so no one can say NAMA is over paying! :angry:

So… what effect will this have on values?

Basically- people won’t need to buy a ticket from the state to be able to buy a house.

So, the equity for leveraging borrowing is increased.

eg- @80% LTV

Equity of 10k enables 40k borrowing= 50k available capital
Equity of 20k enables 80k borrowing= 100k available capital.

ie the diversion of 10k tax, to 10k equity enables 50k more to be bid on property!!

However, the newly cautious purchaser of irish property will incorporate the new property tax into their cashflows, and may be restricted in what they are prepared to commit to funding their property.

Also, funders will recognise it impacts on “affordability” and should be prepared to lend less… wouldn’t they?

So in summary it could increase funding available for the average property by 50k, but the brakes on individual’s cashflow should limit this. In the meantime the jury must be out on the impact this will have on values.

There is also the significant question of impact on homeowners that have already bought their tickets. If there is no relief for them it may force sales in the event that they are unable to service their mortgages. This would reduce prices, but how desperate are the government to tax this group in this way?

Interesting times.

Yep . So the plan is to get €1.5bn annually out of 1.95m gaffs . €1.1bn on the new rates and €400m on new water charges once they roll out meters but initially it will come from some metering ( Adamstown is all metered) and a supplement to property tax where there is no meter (yet) and based on a complicated formula of gaff size and persons .

The Commission shows examples of €0.92bn or €1.11bn on **page 176 **but I understand it will be 0.4% of the midpoint not 0.25% or 0.3% of the band midpoint .

Local and Social are 150k units, make that 1.8m units or €800 per annum average .

It is valid for inferred values of gaffs…and grossly out of date as well as counting what should be exempt.

Valuation Bands

Valuation band No. of houses** Charge per property** Projected gross yield Waiver Net yield
A 0 - 150,000 140,000 225 32 8 24
B 150,001 - 300,000 1,165,000 675 786 197 589
C 300,001 - 450,000 330,000** 1,125** 371 93 278
D 450,001 - 600,000 120,000** 1,575** 189 47 142
E 600,001 - 750,000 30,000 2,025 61 15 46
F 750,001 - 1,000,000 11,000 2,625 29 3 26
G 1,000,001 -1,500,000 2,000 3,750 8 1 7
H 1,500,001 and higher 1,000 MV
0.30% – – –
Total 1,934,000 1,476 364 1,112

If the bands are set up like that, I wonder would it actually accelerate the crash?

A lot of vendors should cop on that lower property tax is now a benefit of the property they have for sale… so someone looking for an unrealistic 350K-400K currently might drop to 299 and throw into their daft.ie ad “CHEAPER PROEPRTY [sic] TAX!!! < 300K ! BAND!!!”

The 475-525k’ers drop to 449, etc., etc…?

Surely it should be linked to your BER cert… :unamused: