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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Property Tax: We need to talk about sticks.

People often discuss economic incentives in terms of ‘sticks’ and ‘carrots’, it’s an adage that refers to getting a donkey to work, you use a carrot to entice it forward or a stick to give a more coercive physical encouragement.

When it comes to property tax the rules in Ireland are damn near shambolic. Our property tax rates are some of the lowest in Europe, for that reason under-occupancy reigns supreme and nobody has to pay the price for it other than those who are on the outside looking to get in (ie: mostly renters).

We have a tendency to under use property, this isn’t just well to do older people living in big houses on their own, it happens in low-income homes too, to an extent that you just don’t see in almost any other well run European country, in fact, elsewhere almost the opposite is true. (see the table below).

In fact, when it comes to people in the lowest quintile of income, we are exceptional because many of them own their own homes outright, this is …

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Should we enforce more regulations for the housing market?

In reference to Michael O’Flynn backs tax on those hoarding development land by

Ciarán Hancock on June 21, 2017 in the Irish Times.

Michael O’Flynn, a property developer, gives support to a tax to those who are hoarding land and waiting until the housing prices increase. This tax has to be carefully composed in order to avoid taxing those who can’t build because of issues surrounding planning, lack of infrastructure, or zoning. This would be difficult to police and enforce due to fraud or proof of these issues.

O’Flynn also suggested the government to create a government separate entity to help coordinate the planning and zoning issues as well as manage infrastructure spending. This is so the two processes can better work together and help combat the housing issue.

If the government will reduce the VAT 4.5% from 13.5% to 9%, Michael O’Flynn …

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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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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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RTE Talking Money – AirBnB (making a house pay), 17th August 2015

With Revenue set to receive the names of over 9,000 AirBnB ‘hosts’ we looked at the implications of this as well as other ways to make your house pay for itself. The obvious one is the tax free €12,000 ‘rent a room’ scheme, but it doesn’t stop there! Find out more as Karl Deeter and Jill Kerby ‘Talk Money’.

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Should we consider scrapping any gains tax on sites temporarily?

If we are to look at housing (at least in Dublin) as being of a crisis nature then perhaps we should consider some bold moves that might bring land into play that otherwise wouldn’t make it.

The talk of a site tax is a good idea, it was the tax we were meant to get from the beginning before the government reneged on their stance for it. This will help create a ‘use it or lose it’ aspect to land holding. The second trick is to encourage movement.

Scrapping the 80% windfall tax would be a start, but most of the site with planning don’t fall into that category, so perhaps scrapping Capital Gains Tax on any site sold (with planning) in 2014 would be a start. The reason for this, and the issue it intends to resolve, is that many sites have insolvent owners, or people too highly leveraged to make the site viable.

Getting rid of the 33% tax (which is harsher than it used to be because the tax …

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The nonsense of VAT reclaims for ending the black market

One of the property concessions in budget 2014 was the ‘home renovation incentive scheme’. This is intended to allow people to get the VAT back on construction work done where the spend is over €5,000 and below €30,000.

While this is viewed as a ‘construction stimulus’ it is in fact a ‘black market disrupter’ which will run from the 1st of January 2014 to the 31st of December 2015. The reclaim will be valued at between €675 and €4,050 and will be given in the two years following the year the work is done, you also must be LPT compliant in order to avail of it.

So think it through, you will pay a certain amount of VAT on top of a job (or more appropriately the builder will charge you that) and over the two years after it you get it back in two tranches.

We have to make a few assumptions here, the first is that the cost of VAT on top of work is a deterrent from purchasing a service like construction, as VAT is an end …

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The Last Word with Matt Cooper – talking property tax

On the 7th we were asked to speak with Matt Cooper about the local property tax figures which showed that 25% of properties in Ireland are worth less (at least on a tax submissions basis) than €100,000.

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Taxing sites: Isn’t that what a site value tax would have done?

When I heard that Dublin City Council was considering a tax on undeveloped sites I nearly choked on my coffee. The introduction of the Local Property Tax was contentious, for many it was contentious not because we were being taxed but because of ‘how’ we were being taxed.

That’s because a sizeable group of people believed that a site value tax would be a better alternative. Our government promised this on page 15 of their programme for government where they stated that they would ‘consider, arising from the previous Government’s deal with the IMF, various options for a site valuation tax‘.

That the Local Property Tax isn’t even going to local authorities this year is a serious snub, but to then turn around and in the same year see a Council look for a separate and additional tax on sites only demonstrates that we are …

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