What will the Local Property Tax changes mean for you?

On 2 June 2021, Finance Minister Paschal Donohoe confirmed the details of the Local Property Tax (LPT) changes. Once the changes go into effect on 1 November, the government estimates that just over a third (36 percent) of property owners will see an increase on their bill, just over half (53 percent) will see no change at all, and 11 percent will see their tax payments reduced.

First off, what is the Local Property Tax? The Local Property Tax was introduced in 2013, and it is an annual charge on all residential properties in the State. Basically, if you own a residential property, you will have to pay this tax. The charges are currently based on self-assessed valuations carried out in 2013. The amount you pay is based on the valuation of your property, and there are 20 different LPT bands, with the lowest two having fixed rate charges of €90 and €225. The problem with these valuations is that property prices have surged since 2013, while the valuations of property for LPT purposes have not changed since 1 May 2013. …

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How the Biden administration’s new proposition might affect Ireland

A key part of Ireland’s appeal to international investment has been its pro business infrastructure and low corporate tax rate of 12.5%, and for decades major U.S. corporations have made use of that infrastructure and tax rate. Some prominent examples include Google, Facebook, and Apple, which famously made use of the notorious “double Irish” tax loophole in the 1990s. International firms have become an integral part of the Irish economy of today, to say the least.

However, U.S. President Joe Biden has introduced a new tax proposition that might change that dynamic. It has suggested that U.S. corporations be subject to a global minimum corporate tax rate, with U.S. Treasury Secretary Janet Yellen recommending a rate of 21%. This would work in the following way: if a U.S. firm has operations in Ireland and pays the lower Irish tax rate for those operations, the U.S. government would be able to apply additional taxes on that revenue until it reaches a rate of 21%. The rationale behind this proposal is to make ensure a more fair and level playing field, while …

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Tax Situation For Irish Abroad

Citizens of Ireland who are deciding to move abroad and live in another country should be aware of their upcoming tax situation. When you decide to leave Ireland, you are still considered an Irish resident and you will have to pay taxes on your income and gains. It is only after you have been out of Ireland for more than one tax year that you become exempt. Due to the fact that Ireland taxes income from other countries for the first year, you may be concerned about your income being taxed by two countries. To alleviate the harm of your income being taxed twice for an entire year, Ireland has double taxation agreement with many countries. Some of the countries Ireland has a double taxation agreement with are: 

Australia  China France Germany  Greece Italy  Japan  Mexico Russia South Africa Spain Switzerland United Kingdom United States of America + 60 other countries that can be found here: https://www.companyformations.ie/blog/irelands-extensive-list-of-double-taxation-treaties-with-71-countries/

 

While you are not taxed twice in these seventy-four countries that Ireland has established a double taxation agreement, your Irish income …

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Ireland vs US: Where your taxes go

In the article Ireland vs US: Taxation , some of the differences between government mandated income tax in Ireland and the United States were highlighted. With multiple differences in how taxation occurs in each country, there are bound to be variations in how these funds are utilized. 

Additionally, because the United States and Ireland are nations that differ significantly in size and population, the total budget and how much of that comes from tax dollars will contrast significantly. In 2017, Ireland’s total expenditure was €69.1 billion; the United States spent $4 trillion. These differences in total expenditure make sense in some ways, given that Ireland is home to 4.804 million people, while the United States houses 327.2 million. 

Ireland’s three largest areas of spending within that year are Social Protection, Health, and Debt Servicing/ EU payments. €20.12 billion, 29.11pc of the total spending, funded Social Protection. Social protection encompasses the funding of many social welfare benefits that you must be eligible for to receive. There are many categories that fall under the social welfare umbrella including disability and illness, …

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Ireland vs US: Taxation

The fourth of July is one of the most widely celebrated national holidays in the United States. In 1776 the Continental Congress declared that the 13 british colonies were to be free from the confines of British rule and would become a new, independent nation. Within the Declaration of Independence, there were 27 grievances against the current and former actions of King George III; Thomas Jefferson, an advocate for independence, wrote almost all of these. 

Grievance 17 focused mainly on taxation without representation, which to this day is still a widely supported part of the Declaration and Constitution. Although this outcome is supported by both US political parties, the amount of income that is taxed and what the taxed money is used for is highly contested.  

In the United States, taxation occurs at the local, state and federal levels. For income, the United States imposes a bracket system on the amount of income you earn. In 2018, the tax rate started at 10pc of total income until you were to earn above $19,050. Between the incomes of $19,050 and $77,399 …

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Moncrieff Show: news review on economic matters 25th August 2014

The Moncrieff Show on Newstalk had us on to talk about interest rates, economics and taxation. In the unmistakable style that Sean Moncrieff is known for, suffice to say, he kept Karl on his toes!

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Preparing for retirement

Most people need to work to earn an income to support their family and themselves. When we reach retirement age and stop working, this earned income stops, so naturally there is a fall off in the level of our income. Therefore making plans to replace this income, in part or whole is a priority.

There are four possible means of making provision for your retirement and these are usually referred to as the “Four Pillars”.

First Pillar – State pensions, there are two types of State Pension systems in existence. The Social Insurance System, pensions are provided as of right at the age of 66 (earliest), to individuals who have paid the required Pay Related Social Insurance (PRSI) contributions during their working lives. The Social Assistance System, pensions are provided as of right at the age of 66 (earliest) this is by way of a “means test”, so only those who can prove they have a very limited financial means and resources. An individual come only qualify for one state pensions.

Second Pillar –  Private provision. Again, there two main …

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MyHome.ie Property Investor Report, 1st March 2012

We are please to bring you some interesting analysis on the residential investment property market in 2012. A big thanks in advance to MyHome.ie who made this possible by giving access to their data. You can get the report here or by clicking on the image to the right.

It was created by Karl Deeter of this firm and Frank Quinn, a lecturer in valuations at Senior College Dun Laoghaire. The valuation models used are Discounted Cashflows, the Investment Method and one developed by Karl which is an after tax comparison against bank deposit returns.

Tom Dunne of Dublin Institute of Technology Bolton Street kindly critiqued the report.

The general findings were that property is still overpriced in our main cities for investors (buyers face different costs/taxes/incentives). This over-valuation will adjust but one big inhibitor to investing in property at present is the taxation of it.

The coverage thus far (eg:

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