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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Government spending more than planned to help the housing crisis

With the government paying about €260 million in the first half of 2017 above the previous first half of 2016, it means the government is trying to throw money at helping the housing crisis.

The Department of Housing has spent around €312 million during this time. The rapid increase is said to be in main part because of the Government’s housing programme.

The Minister of State from the Department of Finance, Patrick O’Donovan has responded that the impact from the increased government spending has already been seen through the amount of commencement notices being filed. Since a commencement notice has to be filed when someone has begun construction of a new home it is a good indicator of the health of the housing market. The previous 12 months from May, commencement notices have amounted to 15,579. This is up 42 percent of the previous twelve month period.

Recently there has been a housing shortage in Ireland that has taken over the housing market. It is making it harder to obtain a house and a mortgage.

The amount of total pre-approved …

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Uncharted territory – or maybe we just can't see ahead?

Often companies and economists make forecasts and predictions about the direction of the economy, so it is interesting that two of the largest banks in the UK, Nationwide and Halifax, have decided to scrap any forecasts for 2009. They will continue to give their monthly figures regarding house prices and statistics but gone are the predictions. Halifax said they couldn’t give predictions because of their merger with Lloyds, Nationwide were more brutally honest ‘We can’t because we are finding it too difficult at this time’.

The interesting date in the near future for UK banks is the 16th of January, because that is the date that the FSA have set for the end of the short-selling ban, this will result in one of two things. First is that short sellers will pile in and sentiment with order backlogs will cause a brief spike in prices -if shorts are not naked ie: you are actually paying to hold the option to buy/sell …

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Uncharted territory – or maybe we just can’t see ahead?

Often companies and economists make forecasts and predictions about the direction of the economy, so it is interesting that two of the largest banks in the UK, Nationwide and Halifax, have decided to scrap any forecasts for 2009. They will continue to give their monthly figures regarding house prices and statistics but gone are the predictions. Halifax said they couldn’t give predictions because of their merger with Lloyds, Nationwide were more brutally honest ‘We can’t because we are finding it too difficult at this time’.

The interesting date in the near future for UK banks is the 16th of January, because that is the date that the FSA have set for the end of the short-selling ban, this will result in one of two things. First is that short sellers will pile in and sentiment with order backlogs will cause a brief spike in prices -if shorts are not naked ie: you are actually paying to hold the option to buy/sell …

Read More →