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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TodayFM Last Word features Irish Mortgage Brokers and Joan Burton to discuss bank taxation

We took part in a conversation with Matt Cooper on The Last Word about bank taxation with Joan Burton from the Labour Party. We tried to make the point that short term thinking about bank taxation is a mistake, that we are better off getting the maximum amount of money back to the state rather than losing bank value in order to score a short term political win.

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U.S Housing Giants Continue Losses

Fannie Mae and Freddie Mac are known to be “too big to fail”….at least that’s what the U.S had said up until the 2008 financial crisis.

In 1968 Fannie Mae and Freddie Mac had become a government-sponsored enterprise, a term insinuating that the government would always be there to bail them out if needed.

In 2008, the government was there to do just that.

With extreme lending of subprime mortgages, the economy quickly began to fail. Individuals were able to get mortgages they were unable to repay, something that would have been easily foreseeable, had the lenders set stricter requirements.

In this time, Fannie Mae and Freddie Mac had borrowed over $187 billion. And now, finally, they have repaid to the full amount and more…leaving the Trump administration to decide what to do next.

With reporting of a fourth-quarter net loss, it is obvious they have yet to recover to pre-crisis standards, and neither is it surprising that they are looking for taxpayer help with the new tax bill that has been passed by the trump administration.

This crisis begs …

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The Housing Markets most Pressing Issue

Ireland’s “most pressing issue”…

The lack of housing.

Economist Philip O’Sullivan is reported as saying that tens of thousands more houses need to be completed annually to meet current demand. Why is it that there’s such a shortage of homes?

It is on schedule right now that 21,500 homes were built this year and 24,000 for next year. Though, a good number in the race to meet demand needs, it is nothing near the needed 30-50,000 homes being built to sufficiently meet the demand.

The society of chartered survey of Ireland has predicted that this housing crisis could continue for another 10 years. Paul O’donoghue, a writer for Fora sad that drastic measures need to be taken immediately to push for the development of homes.

With too little of homes available to meet demand, it is the law of supply and demand that says the price of the homes will increase as well. Equilibrium is expected to be reached by 2026.

This, falling in line with the prediction of the housing crisis to continue for nearly …

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Claire Byrne Live ‘The Paradise Papers’ explained 6th November 2017

Our compliance manager Karl Deeter was on Claire Byrne Live on RTE 1 last night to explain the ‘Paradise Papers’. This was a cache of documents that helped to expose tax avoidance on a large international scale. He explained the difference between avoidance and evasion as well as asking whether or not these papers were ‘good’ because if a person didn’t break the law should they lose the right to privacy?

These papers are likely to expose actual evasion and on that basis they need to be examined, we are confident that the news coming out of the Paradise Papers is far from over.

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A new tax on rents over €2,500

This year a new tax bill in Dublin was introduced that has not been welcome amongst the public. As we see rents rapidly increasing in Dublin, a 1 percent stamp duty on rents over €2,500 becomes ever more pertinent than before.

 

This 1 percent duty was initially set at around €1,500 month. It was then raised to €2,500 after the financial crisis to help relieve some of the pressure on tenants.

 

However, it has now came to that level where a more massive amount of people are hitting this €2,500 a month target.

 

With housing rates increasing rapidly, an analysis by Goodbody Stockbrokers claimed around 55 percent of three-bedroom Dublin homes are above this €2,500 level on the Daft.ie. A third of all these properties are in the same area.

 

What does this mean for many families?

On …

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Bank of Ireland restructures their equity

Over the weekend, Bank of Ireland went through some major changes to their structure.

This is needed to avoid a future bail out. Fitch, one of the world’s top three credit ratings firm, said the Irish banking system had around 15 percent of non-performing loans. This is about three times the average amount of the European Union countries.

Despite this, Fitch still gave Ireland a rating of A because of the potential economic growth. They gave Ireland this rating on Friday because the economy is supposed to grow 3.5 percent this year which makes Ireland one of the top growers from the EU area for the third consecutive year.

Even with this high rating, Fitch warns Irish banks that this massive amount of problem loans is weighing the country’s rating down.

Bank of Ireland responds by restructuring their equity to protect Ireland if a crisis occurs. This new system protects the Irish bank accounts and minimizes taxpayer bailout.

How it works?

Bank of Ireland will issue two types of equity: senior and junior. This puts the liability of crisis to …

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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 ‘The Right Hook’, Jonathan Healy speaks to Karl Deeter

We were speaking to Jonathan Healy who was covering for George Hook on ‘The Right Hook’ about the ‘home renovation initiative’ which is set to end at the end of 2016. We covered some of the general terms and conditions of how it worked then went on to analyse whether it was a good idea or not given the various happenings everywhere else in the market.

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