Why people will still invest in property in 2016

We plan to go through the maths soon of why the tax breaks that ended in 2014 were a bigger driver of a slow down in the market than the Central Bank rules, this aside, people will still invest in property.

The world of investment is relative, not absolute and for the €90 billion sitting in deposit earning 1% (at best) or less the implications are clear, you have to invest somewhere or get substandard returns which will eventually be eroded by inflation.

Along with a future of quantitative easing in Europe, the likelihood of a Dollar that will get stronger and a stock market that looks toppy to many, property will remain a focus for better or worse with many people who have money.

On the capital side you have a known shortage of property, that would lead some to believe there are significant capital gains to be had. On the dividend or yield side, you have strong rents which are still showing signs of rising.

Rents are certainly very strong versus the return on deposits even when you …

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What if your age was your tax rate?

I had a chat over coffee with a friend and we were discussing how the Economist was showing that ‘young home owners’ are a dying breed. It is also a fact that older people tend to have less debt and own more property, then we got to talking about how you could balance the scales.

My idea (which I don’t agree with, it was just to ‘throw it out there’) was that your tax rate should be your age. It could work on homes via imputed rents – very unlikely to see the light of day, but on investment property it would make a big difference and would mean that profits of the most profitably landlords would reduce over time as they age.

It might encourage them to sell or transfer property to younger generations (releasing CAT/CGT tax in the meantime), it could also all backfire, was just a thought and probably an ill thought out one at that.

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We need to lose our obsession with property ownership

This article was submitted to the Mail on Sunday for publication on the 17th of March, it is not identical to the final edit which appeared in the paper.

There was a time when a single lady having a child was a shameful thing, I know this through experiences in my own family; the comments and remarks some people made were disgraceful. Thankfully as a nation we all woke up, nowadays the birth of a child is celebrated of itself and not for the moral parameters of the backdrop they are born into.

I can’t think of a single person who in calling another ‘bastard’ is making any sincere reference to the origin of the term, it’s still derogatory, but never used an indication of birth legitimacy. The move away from shame and guilt to seeing new life for wonderful even that it is has transformed us for the better.

That those views ever existed was an example of cultural consensus at its worst, but it’s happening still, only now it’s with debt, it’s time to change this broken record.

…

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Irish Property Owners Association budget 2013 response

The Budget failed to address one of the key issues for landlords in the private rental sector, who are providing good quality homes for in excess of 600,000 people.

The so called Local Property Tax, billed for the funding of local services, should be collected from the people using the services under the “Users Pays Principle”.  “This perpetuates a blatant unfairness in the system”, said Stephen Faughnan, Chairman of the Irish Property Owners Association. “This situation will inevitably result in rents having to rise, and represents another layer of of continuing unfairness.” Property Owners in the private rental market may now be forced to participate in an unfair tax code.

The only very slight crumb of comfort in the Budget for private landlords is that the inequitable Non-Principal Private Residence Charge and the Household Charge are being abolished, but their replacement with a Local Property Tax just continues the discrimination whereby tenants and a variety of others availing of local services do not have to directly pay for those services, unlike private home owners who may live next door.

In …

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TV3 Viewers: The good things about a Site Value tax

We are posting this for viewers of TV3’s ‘The Morning Show’ with Sybil & Martin, it covers some of the main advantages about Site Value Tax.

1. It is widely agreed that we need to spread the tax base to reduce taxes on employment to be replaced by taxes on assets, and to create a less volatile tax base. This can be achieved with Site Value Tax. In terms of ‘fairness’, it is important to remember that only 50% of properties in the country have a mortgage on them, and for that reason there is also taxable capacity in the market for this, in conjunction with a reduction in income taxes.

2. The Site Value Tax currently included in the Four Year Financial Recovery Programme, is such a tax. It applies only to land zoned for development, or already developed.

3. Land is a fixed asset. A high proportion of its value is dependent on its area, its location and its proximity to related infrastructure. Infrastructure which is created via public expenditure but rarely ever re-captured for the value it …

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The importance of Land or Site Value Taxation, Fred Harrison, Karl Deeter and Stephen Reed

Land Value Tax (part1)- Fred Harrison, Karl Deeter and Stephen Reed from Irish Mortgage Brokers on Vimeo.

This is a talk that was given at the School of Philosophy and Economic Science on Wednesday the 27th of October 2010. It covers the reasons for Land or Site Value Taxation being an important aspect of any normal and functioning economy, Fred Harrison gives the economic background, Karl Deeter discusses some of the general societal issues and Stephen Reed relates to his practical experience as a Mayor who used it to regenerate his City.

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Site Value Tax: What is it? How does it work?

I volunteer with a group called Smart Taxes who are a sustainable taxation think tank. This has post is taken from their site (original in link above), and it is well worth reading if you want to hear about the reasoning behind using site value or land value taxation as opposed to ‘property taxation’.

Site Value Tax is a taxation reform included in the Irish government’s current Program for Government. It levies an annual charge on the value of all developed and undeveloped zoned land including the site under every building in residential use.  It does not include un-zoned land i.e. agricultural land, forestry and peat-lands.  It does not include developed commercial property currently subject to local rates but it is expected that SVT will replace commercial rates in due course.  It does however, include land zoned for commercial uses not currently subject to rates.  Research by Smart Taxes and other groups has shown that SVT has clear benefits over other kinds of property taxes from a number of perspectives; macro and micro-economic, environmental and social. …

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Fast Track Repossessions, what does it mean?

There has been an interesting development in the area of repossessions in recent weeks in which a property can be taken back (repossessed) without a full court procedure having taken place. Today we will consider how this will work.

First of all, there are several things which tie in together in 2009 and they form part of reason behind the new ruling. The use of circuit courts to repossess a home used to be commonplace because the decision was set in a court depending on the ‘rateable value’, but the domestic rates system was discontinued in 1978, thus, the hearings started to default into the higher echelons of judicial decision making and today the common court for repossession hearings is the High Court.

The new rule means that a Registrar will decide what is seen or not by the court and a side effect of this is that a house can be repossessed without actually going before a judge. It is important to note that a registrar is not merely a …

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