Office extensions in the docklands

The Dublin City Council has granted planning permissions to a business associated with billionaire Denis O’Brien for additional floors on an office building in the Docklands. In the beginning of 2019, Jepview Ltd had plans to replace the fourth floor penthouse inside the Malt House building. Jepview planned to build an additional four storeys to make a nine storey office building. However, the council determined that the plan may be excessive and Jepview reduced one of the planned floors.

The council revised plans earlier this year after the conservation officer revealed that effective development will consist of five floors of vertical extension over an existing 4 storey victorian warehouse building. The officer also stated that the proposed addition should be reduced by at least two storeys to ensure the glass extension remained appropriated.

The office deemed that getting rid of only one floor was sufficient. The vertical expansion grant of the Malt House building uses the city council planner. Specifically, the proposal”exhibits a distinctive contemporary design which will make a positive contribution to the subject site and Dublin’s urban fabric”. …

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Skyrocketing Inheritance Taxes due to Increasing Property Prices

The exchequer reported an all time high collection from the inheritance tax which is one component in the capital acquisition tax (CAT). The amount recorded that was collected amounts to €466.3 million. The increase in revenue from the inheritance tax is due to increasing property prices and unchanged tax free thresholds. The revenue figure of inheritance tax collected depicts an increase in revenue by 10% in comparison to the collections in 2017. Inheritance tax collections comparatively increased by 48% in comparison to the Celtic Tiger era in 2007. This dramatic increase across the span of 10 years is due to the rising housing costs.

Over half of the inheritance tax was paid on the behalf of grandchildren, nieces and nephews who inherited upwards of €32,500 from relatives in 2018. The rapid growth in inheritance tax collection is due to another year of increasing property prices. Furthermore, the increase is due to the controversial unchanged tax free thresholds. Many people argue that these thresholds should be immensely increased. The tax free threshold for inheritances left to children was at its highest in …

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Housing in half of all counties are unaffordable

According to the Irish independent, homes are becoming so expensive that first time buyers cannot afford to purchase a home in half of the counties in Ireland. Not only are the housing prices too high to quantify as affordable, but mortgage requirements do not make buying homes possible for first time buyers. In other words, a buyers average income does not amount to the fund needed to deposit. A buyer’s income on average also does not quantify to high enough earnings to qualify for a mortgage.

The lack of affordable homes have always been an issue in Dublin and Cork, but the trends in the housing market are causing widespread housing unaffordability throughout the state. Recently, a survey conducted by the EY-DKM economic advisory determined Co Roscommon, Co Clare and Co Offlay have been defined as additional counties that are now too expensive for buyers.

The most unaffordable counties of Co Wicklow, Co Kildare, and Co Meath have been defined as the most unaffordable in terms of saving for a deposit. These counties take an average of 15 plus years …

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Central Bank warns of a financial stability threat due to cuckoo funds

Cuckoo funds or offshore venture funds in Ireland’s commercial property is causing apartments to be bought up by the big businesses that make up the cuckoo funds. The increasing dominance of offshore investment in Irish commercial property is causing risks that they will also import a boom bust cycle. According to research from the Central Bank, the threat is also that house prices will fall and the banks will be weakened.

Warnings have been definably seen as two of the biggest property investors in recent years look to sell a large portion of their office blocks. The Central Bank continues to explain that foreign financed funds are more vulnerable to negative shocks outside of Ireland. In other words, foreign investors are not as concerned with the Irish economy as they are concerned with the general economy and their investments. Foreign investors are not concerned with the health of the Irish economy and could potentially get rid of all Irish assets to pursue easy profits elsewhere.

Although there is high risk associated with cuckoo funds and foreign investors, these investments are …

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OPW’s failures in property management – overpaying for properties

A former employee of the Office of Public Works (OPW) will discuss in a private session of the Public Accounts Committee (PAC) that they have shown to have immense failures in the property management unit.

The main purpose of the OPW is to support the implementation of policy. The Office of Public Works also advises the Minister and the Minister of State in property. This property includes heritage properties and flood risk management.

The former employee worked in the property management unit. The previous employee revealed that the Office of Public Works wrote numerous reports that showed the shortcomings and failures in the way that the OPW deals with property.

The OPW has been under recent pressures due to the move of the Department of Health headquarters onto Baggot Street. According to the PAC, the move led to an overpayment of €21 million. The former employee will assess on the value of money in the OPW’s total property and report to the PAC related to the overspending of OPW. According to the employees report the overspending of a single session exemplifies …

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Government denies the warning signs of Cuckoo Funds

Cuckoo Funds has been recently used to describe big investors investments poured into developing build to rent housing. However, on average the developments funded by cuckoo funds are not affordable for the average individual or family. Some of the main investors that comprise of the cuckoo funds are large institutional investors like pension funds, real estate investment trusts (REITs) and special private rental firms. Investors are increasingly interested in attempting to tap into the growing demand for Irelands rental market.

Cuckoo funds are known for buying properties and charging insanely high and unaffordable prices for the properties. However, the Housing Minister Murphy has denied that housing is unaffordable. Murphy continued to argue and defend the government’s record on housing and claimed that the government has protected renters.

However, individuals have accused the government of ignoring the red flags of activities related to cuckoo funds. Multi-national venture funds have been able to sweep up properties and resell them for immense costs. Cuckoo funds have created 3,000 new housing units in 2018.

The government has not yet claimed to see the dangers …

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Finance Minister Announces €1.25 Billion allocated to Social Housing

According to Finance Minister Donohoe, the Land Developmental Agency has identified sites where a potential  3,000 homes could be built. State bodies are working with the government to locate land that can deliver an additional 7,000 units.

Donohoe also pledged an increase allocation of €121 million to the Housing Assistance Payment. This additional €121 million serves as a emergency accommodation. Donohoe reveled a €60 million increase in funding will also go towards emergency accommodations.

Also, landlords will have 100% mortgage relief on loans used to pay for rental properties. This new relief for landlords will be in effect in the next year. This action will help reduce the risk of becoming a landlord.

Homelessness services were also planned to receive an increase of funding of  €30 million. This funding is to help alleviate the burdens of the housing crisis. The total spending on homelessness in 2019 is now boosted to €146 million. Donohoe’s report revealed that housing needs for 25,000 people will be met in 2019 due to the increase in supply of housing stock. The increasing trend in supply of housing has …

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The Help to Buy Scheme

The Help to Buy (HTB) scheme is an incentive for first time property buyers. The scheme helps individuals with deposits needed to buy or build a house or apartment. The incentive is that the scheme will give individuals an income tax and deposit interest retention tax (DIRT) refund. This refund extends up to four years of income tax and DIRT tax paid in Ireland in arrears. The incentive has a limitation to a maximum of 5 percent of the purchase value of a home up to a value of €500,000.

To qualify for the scheme, individuals must be first time buyers. The property bought or going to built must be newly built with the construction subject to the value added tax (VAT) in Ireland. The requirements of the Help to Buy scheme also involves taking out a mortgage on the property with a qualifying lender. The loan to value ratio must be at least 70%. This loan to value ratio denotes the percent of the loan that covers the purchase value of the property.

The scheme is estimated to contribute about …

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Housing crisis only expected to get worse until 2023

According to Focus Ireland, the most optimistic statement on housing released by the government reveals that the housing crisis will continue get worse until 2022 or later. This statement is considered very optimistic as housing issues will likely progress into 2023.

The Department of Housing targets 48,000 new home completions by 2023. If this target is achieved, 2023 could be the first time that housing supply could potentially exceed housing demand. Figures provided by the Department of Housing have shown the first time that an admission denoted housing and homelessness will only continue to get worse in the next few years.

Although the Department of Housing has set a target of 48,000 new homes to be built by 2023, this target could be missed. If the target is completed or surpassed then burdens associated with the housing crisis could be significantly reduced. The problems that could be reduced would include reduced homelessness and new homes would create more supply for social and affordable housing. However, if homes were to be sold at current market values then the impact on …

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Heightening Taxes to Boost Spending

According to the Nevin Economic Research Institute (NERI), the government needs to look at generating extra funding for housing. How do you generate additional government funding? Taxes.

The need for increased spending on housing can be gained from heightening employer-related PRSI, property, gift and inheritance, and carbon taxes. Irelands government spending and tax revenue amounts to much lower than the average EU spending and revenue.

According to the Department of Finance, in 2018 just over €55.5 billion was received by the Exchequer. Tax on income and wealth amounted to 10.5% of the Irish GDP in 2017, while tax on individual or household income amounted to 7.3%.

Countries in the EU that have progressively developed more stable housing and social housing taxes and tax revenues are comparatively much higher than Irelands. For example, Denmark has established housing that over 22% of dwellings are social rented. Denmark’s tax on income and wealth amounts to 29.7% of their GDP and tax on individual or household income equates to 25.4% of Danish GDP.  Denmark exemplifies a similar country in the EU where the housing market …

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