Taxing a second home is not a new thing ? That's the kind of thing that could have taken the heat out of the Celtic Tiger Mushroom Growth but taxing developers a bit more in the right way could have done it as well.

How much is the tax anyway ? And aren't we now talking about a new property tax now which could be anywhere between 200 and 500 euros per year ??

They announced a tax on second homesof €200 in the last budget. The Irish Times conjects it could be pushed as high as €600 now. I wonder does this include mobile homes - alot of people have those. I wonder will they provide us with any services for this €600. We have a house in Wexford with no bin collection service and no mains water supply from the council or sewage facilities from the council.

Auditor #9 wrote:

Taxing a second home is not a new thing ?

I'm surprised how few people know about this.
It is €200 per year.
On Budget Day it was announced that it would be levied by local authorities but since then there has been a u-turn on that aspect since central government figure they need the money more.

Auditor #9 wrote:

Taxing a second home is not a new thing ? That's the kind of thing that could have taken the heat out of the Celtic Tiger Mushroom Growth but taxing developers a bit more in the right way could have done it as well.

How much is the tax anyway ? And aren't we now talking about a new property tax now which could be anywhere between 200 and 500 euros per year ??

Is there a problem? If you can afford two houses surely you can afford to pay a tenner a week?

Well 600 is more like 20 euro a week. I would imagine quite alot of people will end up selling second homes which of course has a knock on effect for the local economy in many parts of Ireland which is highly dependent on people who own holiday homes spending money. Particularly older people who have held them in families for years or who bought along time ago. That isn't to say that I don't support the move, it is merely what might happen as an effect of the move.

If this is applied to rental houses it will push rents up. The people paying the rents will get a tax allowance, I think. Plenty of work pushing paper around though.

cactus flower wrote:

If this is applied to rental houses it will push rents up. .

Hardly when there is a massive oversupply of rental properties.

If applied to rental houses it has the potential to push rents up. But then again, given the oversupply which is, or is about to, flood the market there is a considerable chance of huge deflationary pressure on rents. In that context, it may not make alot of difference.

You took the words right out of my mouth .

evercloserunion wrote:

Auditor #9 wrote:

Taxing a second home is not a new thing ? That's the kind of thing that could have taken the heat out of the Celtic Tiger Mushroom Growth but taxing developers a bit more in the right way could have done it as well.

How much is the tax anyway ? And aren't we now talking about a new property tax now which could be anywhere between 200 and 500 euros per year ??

Is there a problem? If you can afford two houses surely you can afford to pay a tenner a week?

Nope, no problem unless it is that the fee is too low for a second house (I was thinking of €200 was the amount for the property tax???? that is being talked about being introduced for every house in the country)

I've a feeling the Government failed in dealing with the likes of this during the BOOM! In my opinion - Tax the first home lightly, if at all, the second home heavily and the third severely. On subsequent homes you'd want to have a big nose because that's what you should be paying through.

@ JohnFas

My understanding is that it is applied on rentals, btw.

Did the medical card fiasco so overshadow the Budget that nobody noticed this? I'm disappointed because it was something I liked in the Budget.

And a fiasco it was too. If it hadn't been for the populism of McCreevy giving in it the first place it would not have created such an issue. If we desire low taxes we must have things like means testing for free healthcare, save for hospitalisation. You can't run a good universial healthcare system when you have amongst the lowest tax take (excluding property tax, at the time) in Europe.

johnfás wrote:

If applied to rental houses it has the potential to push rents up. But then again, given the oversupply which is, or is about to, flood the market there is a considerable chance of huge deflationary pressure on rents. In that context, it may not make alot of difference.

There is a huge oversupply, but ultimately the tenants will pay. With rental prices already down lower, either the rents will be pushed up, on the standard of maintenance and fittings will go down, or properties will be taken off the market if they become uneconomic to rent.

I have always been entirely in favour of property tax, which I think should be in the form of a local rate. It is always going to be the occupants who pay ultimately, whether they are tenants or owner occupiers.

Auditor #9 wrote:

I've a feeling the Government failed in dealing with the likes of this during the BOOM! In my opinion - Tax the first home lightly, if at all, the second home heavily and the third severely. On subsequent homes you'd want to have a big nose because that's what you should be paying through.

A feeling? There's an understatement.

cactus flower wrote:

johnfás wrote:

If applied to rental houses it has the potential to push rents up. But then again, given the oversupply which is, or is about to, flood the market there is a considerable chance of huge deflationary pressure on rents. In that context, it may not make alot of difference.

There is a huge oversupply, but ultimately the tenants will pay. With rental prices already down lower, either the rents will be pushed up, on the standard of maintenance and fittings will go down, or properties will be taken off the market if they become uneconomic to rent.

I have always been entirely in favour of property tax, which I think should be in the form of a local rate. It is always going to be the occupants who pay ultimately, whether they are tenants or owner occupiers.

I don't know. I have several friends who are renting with the lease being up this summer. They are quite prepared to move on in the summer and are expecting to strike a hard bargain with potential landlords. Ultimately the tenants will pay, but with a huge oversupply and alot of investors desperately needing the cash to meet their obligations, there is increasing bargaining power moving to the renters.

There is no such thing as a property which is uneconomic to rent. If I own an investment property that is costing me 1,500 a month to fund the mortgage of. If I can't get a tenant I will lower the rent until I do. 100 a month is better than 0 a month in that context. Particularly when the bank is on your back.

eoinmn wrote:

Auditor #9 wrote:

I've a feeling the Government failed in dealing with the likes of this during the BOOM! In my opinion - Tax the first home lightly, if at all, the second home heavily and the third severely. On subsequent homes you'd want to have a big nose because that's what you should be paying through.

A feeling? There's an understatement.

On the other hand I think it should be the opposite for cars somehow

Auditor #9 wrote:

On the other hand I think it should be the opposite for cars somehow

We don't own enough cars?

Oh, maybe you mean you want to tax a second car less than a first car?
Either way I don't see why. Can you expand on the idea?

We already tax cars and have mandatory insurance.

Really, we should abolish car tax and make petrol more expensive. Then the people who drive more pay more and the people who drive bigger, less efficient cars, pay more. Of course you'd need to also invest in public transport....

eoinmn wrote:

Auditor #9 wrote:

On the other hand I think it should be the opposite for cars somehow

We don't own enough cars?

I wouldn't mind being able to have a second one without being "penalised". I wouldn't be able to drive the second one at the same time obviously. What if I wanted a van for working, or a leisure car that I consider classic or a different type of engine... ?

My initial purchase of the car might be a couple of grand extra in the economy but I wouldn't have the tax to pay. Maybe there should be lower tax on second-hand cars or components - that would be kinda Green wouldn't it? I don't understand why wanting to preserve an old car isn't considered green. I know a good few people with glinting cars from the early nineties - "well minded" cars. It's green I'm sure. A stimulation of the second-hand economy ... it would be CO2 conservative overall.

edit
I think I agree with you johnfás.

Auditor #9 wrote:

I wouldn't be able to drive the second one at the same time obviously.

Your spouse or children might be able.

Auditor #9 wrote:

? I don't understand why wanting to preserve an old car isn't considered green. .

It *is* considered green. Apart SIMI I don't know anyone who pushes the line that second hand cars aren't green.

johnfás wrote:

cactus flower wrote:

johnfás wrote:

If applied to rental houses it has the potential to push rents up. But then again, given the oversupply which is, or is about to, flood the market there is a considerable chance of huge deflationary pressure on rents. In that context, it may not make alot of difference.

There is a huge oversupply, but ultimately the tenants will pay. With rental prices already down lower, either the rents will be pushed up, on the standard of maintenance and fittings will go down, or properties will be taken off the market if they become uneconomic to rent.

I have always been entirely in favour of property tax, which I think should be in the form of a local rate. It is always going to be the occupants who pay ultimately, whether they are tenants or owner occupiers.

I don't know. I have several friends who are renting with the lease being up this summer. They are quite prepared to move on in the summer and are expecting to strike a hard bargain with potential landlords. Ultimately the tenants will pay, but with a huge oversupply and alot of investors desperately needing the cash to meet their obligations, there is increasing bargaining power moving to the renters.

There is no such thing as a property which is uneconomic to rent. If I own an investment property that is costing me 1,500 a month to fund the mortgage of. If I can't get a tenant I will lower the rent until I do. 100 a month is better than 0 a month in that context. Particularly when the bank is on your back.

If the mortgage, maintenance and management of the property is costing more than the rent, and the property value is going down, its likely you would cut your losses and sell.

If you owned a property outright and the maintenance, fittings and management of the property is costing you as much as the rent, you would be better off to take it off the market. Plenty of people who own rental property are not under any kind of economic pressure and will keep properties off the market until they get a rent they think is economic.

As there is an oversupply, developers have stopped building houses. Banks aren't lending to purchasers. There is a public waiting list of tens of thousands of households and local authorities aren't building. Even with emigration up, there is a housing shortage coming at us down the line. Undoubtedly, in the short term there will be bargains, but in the long term, the tenants will pay.

I'm in favour of all residents/property owners paying a local property tax or rate that goes straight to the local authority to fund local services.

The interesting prospect has come to my mind that in the short term, there may be private sector rents that are much better value than social housing. That could pose a problem to local authorities.

You'd sell if you can sell. Thus another problem in the current market. There are two houses on my road for sale with asking prices of half a million less than a house of the same size that sold 18 months ago. I have not seen a single person viewing either of them.

johnfás wrote:

You'd sell if you an sell. Thus another problem in the current market. There are two houses on my road for sale with asking prices of half a million less than a house of the same size that sold 18 months ago. I have not seen a single person viewing either of them.

Well I suppose conditions of total market failure, in which we are looking at the prospect of starvation, is not the best time to be talking about the functioning of markets.

We don't know what is going to happen. In the US whole neighbourhoods are falling into ruin. Perhaps the State should be nationalising empty property, rather than empty banks.

O'Rourke talking to Mary Coughlan and Joe McHugh as Coughlan is having a break from the all-night negotiations ...