Fine Gael’s Tax Regime Under Scrutiny

Ireland is known throughout the world of having a very low corporate tax rate, which draws in many multinational companies. In addition, foreign property investment funds are also paying very low taxes and are walking away with massive profits. Many believe this is hurting the average taxpayer and are calling for an increase on taxes to foreign investors.

A main critique to this is the current housing shortage and how it may encourage less houses being built. However, this fund is buying large chunks of land and holding it to draw prices up and then selling these properties at premium prices. The housing shortage is due to the lack of affordable housing, not high-end luxury houses. Pearse Doherty, finance spokesperson, has been raising this issue publicly after he learned that only approximately 13 million Euros were collected on taxed profits out of the hundreds of millions that the companies earn. One of the tax loopholes that companies use is the Fine Gael’s tax regime. These loopholes allow them to avoid cooperation taxes on rental income and tax on gains if …

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The Tonight Show on VMT, 14th January 2019

We were pleased to see our points about property tax on the Tonight Show on VMT given time to get worked through. The full show is available online at Virgin Media.

"If your income went up 100% would you want more tax money? Of course you would. So stop being hypocrites." – @karldeeter disusses property tax and asset millionaires. #TonightVMT

The Tonight Show, Monday to Thursday at 11pm on Virgin Media One. pic.twitter.com/Cl2cYxpxXW

— The Tonight Show (@TonightVMTV) January 15, 2019

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McWilliams Ireland: Are we in a property bubble? (2nd November 2017)

David McWilliams’s show ‘Ireland’ looked at the issue of property prices here and asked if we are in a ‘bubble’. He spoke to Karl Deeter from Irish Mortgage Brokers about this who made two points. The first was that we are too late to change the outcome of the property cycle, the second was that the biggest land hoarders in the state is the state itself and that Government should release land to flood the land market and drive down the primary costs of construction.

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The most expensive places to buy in Ireland

The most expensive property sold in 2017?

€8.4 million was paid for a house in Fintragh of Shrewsbury Road according to the Daft.ie. Five streets have had transactions of €3 million or more in the last 18 months: Shrewsbury Road, Ailesbury Road, Temple Gardens, off of Palmerston Road in Dublin and Westminster Road in Foxrock.

Only one percent of all homes in Ireland are worth €1 million and over according to the Property Price Register.

Highest number of over a million home transactions is Herbert Park in Ballsbridge.

Total spent on housing since 2016?

€800 million was spend on housing alone since 2016 according to the Property Price Register. That averages around €12 million every week paid for in housing. The average price for a house the first quarter of 2017 was €230,000.

Ten years ago, however, the average home was worth around €370,000. After the crash, the average price of a home was around €165,000 five years ago.

Total of all Ireland’s Property worth?

If you would combine all the valuations of all the properties in Ireland it will …

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Should there be a tax on hoarding land?

There is evidence for property owners hoarding land because there is an expectation for rising house prices in the future. However, this only contributes to the housing shortage crisis. If the budget for 2018 included such a tax for property owners who choose to hoard land, it will give a financial incentive to build on the land now.

Property taxes are supposed to reflect the market value on the properties but all the valuations have been halted leaving a lot of room for political unrest.

Increasing the property tax, according to John Fitzgerald from the Irish Times, will give the government extra proceeds to fund for housing. This will give incentive to better utilize properties and give extra cash to the government to help out with the housing shortage.

It will also allow people with homes help the …

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Today FM ‘Last Word’ speaks to Irish Mortgage Brokers, 27th April 2017

Matt Cooper had several guests in to discuss the new proposal for 800 sites owned by the government to be released in order to provide new housing.

There was  Jim Bainam from the Department of Housing, Karl Deeter from Irish Mortgage Brokers and Sinn Fein TD Eoin O’Brionn.

There were differences of opinion in terms of the ‘how’ regarding the sites, in terms of ‘how they are delivered’ via housing bodies, local authorities or privately, but all of the panellists were positive about a move to increase housing supply.

The main thing to remember in our view, is that it doesn’t really matter who builds what because the local authority remain the tax authority on all housing so they can get the housing with no capital outlay and then capture the property tax in future years if a private developer does it.

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First time buyers who don’t buy new homes

First time buyers have been asking ‘what about those of us who are not buying a new home? Why don’t we get any help like the people using help to buy?’. The answer is that you do, at least for the remainder of 2017.

There is still a DIRT relief for first time buyers scheme in action, it started in 2014 and is ongoing until the 31st of December.

The scheme doesn’t help you get a deposit, rather it’s a refund after you buy, see the notes below taken from the Revenue.ie website:

Section 266A of the Taxes Consolidation Act 1997 provides for refunds of Deposit Interest Retention Tax (DIRT) for first-time buyers who purchase a house or apartment to live in as their home. It also applies to first time buyers who self-build a home to live in.

Who can claim it?

A first-time buyer of a house or apartment who purchases or self-builds a property between 14 October 2014 and 31 December 2017 may be entitled to claim a refund of DIRT.

The first-time buyer must not have …

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Newstalk: Talking Point on housing, Saturday 9th April 2016

This week on Talking Point the host Sarah Carey did a great job of examining housing issues with the panel of guests which in studio included Lorcan Sirr of DIT, Dermot Lacey a Labour Party Councillor and Karl Deeter of Irish Mortgage Brokers.

Many relevant points were made about tenure, about supply constraints and solutions as well as discussions about things that don’t often make the press – such as permanent tenures and the like. It is well worth listening back on given the breadth and expert insight of the show.

 

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VAT cuts in construction, who would get the benefit and why?

VAT is an end user tax, the ‘cost’ to businesses is zero. That fact is often overlooked in all debates about VAT, a business has input and output VAT, if they take in more than they charge they send the balance to Revenue, if they pay out more than they take in they are in a refund situation.

So why would dropping the VAT rate make any difference at all if the cost to the business doesn’t change as a result of it?

The normal implication is that the end user would benefit because you would have a ‘cost plus’ that would result in a lower end price, which intuitively makes sense until you consider the other issue of bottom up costs and obvious capacity for additional profit taking.

What that means is there are bottom up costs like various levies, regulations, and carry costs that make the break even point higher than it might naturally be, certainly higher than it ought to be if you go by international standards. If current costs are above break even a lower VAT …

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