Sunday, 27 January 2013

Dublin City Property Hit With Huge Tax...

Revealed: huge inequity in rural/city property tax...

Small apartments in capital will be charged more than rural 'mansions'

THE gross inequity of Finance Minister Michael Noonan's property tax is today laid bare as it has emerged Dubliners on the lowest rung of the property ladder will pay higher property tax than the owners of large four-bedroom homes across rural Ireland.

One-bed apartment owners in the golden triangle of south county Dublin will be forced to pay on average €315 in property tax, higher or equal than that paid by the owners of large detached houses in 19 other counties outside the capital, a Sunday Independent national property survey published today reveals.

The figures have reignited angry calls this weekend from within Fine Gael to have the terms and scope of the property tax amended in the Finance Bill to address the "injustice inflicted on the people of Dublin".

Dublin South TD Olivia Mitchell said: "What is happening is that many young people who bought apartments at the peak, paid huge stamp duty and are now caught in negative equity will be subsidising those in country mansions. It is grossly unfair," she said.

According to our county-by-county analysis, owners of large homes in counties Mayo, Roscommon, Leitrim, Cavan, Longford, Westmeath, Offaly, Laois and Wexford will pay, on average, lower property tax than owners of the smallest apartments and houses in areas such as Stillorgan, Dalkey and Blackrock.

For example, owners of large four and five-bed houses in Taoiseach Enda Kenny's constituency of Mayo will pay a mere €225 a year in property tax, while people in the same-sized house in south Dublin will be forced to pay €945, a difference of €720 a year, our survey says.

But worse still, those who own large rural homes who will pay the €225 property tax will be charged €90 less than owners of small one-bedroom apartments or houses in south Dublin. While the figures contained in the survey are based on averages, the reality is that the owners of larger homes in Dublin will pay in excess of €1,000 every year in property tax.

In counties Kerry, Galway, Donegal, Monaghan, Limerick, Waterford, Tipperary, Sligo, Longford, Louth, Kilkenny, Meath and Carlow, owners of the largest properties will pay on average €315, the same as the one-bed apartment owners in south Dublin.

The survey examined the latest available sales data based on actual sales figures drawn from the Residential Property Price Register as well as information contained in quarterly reports on the property market by and

Reacting to the findings of our survey, angry Dublin Fine Gael TDs have reiterated their claims that what is being introduced is not a property tax but merely another form of income tax.

Dublin South TD Olivia Mitchell said: "We all know this so-called property tax is not a sustainable model for collecting money. These figures demonstrate clearly that the property tax is massively unfair."

She added: "I know the rural people have said they don't have the same services, and their subvention should come out from general taxation. This is not a property tax and the people of Dublin are being done a grave injustice."

Her colleague Eoghan Murphy, who represents the Dublin South East constituency, branded the property tax as a "deeply retrograde measure".

"This can in no way be perceived as fair, no way. It doesn't make any sense. I am all for a local services tax or charge, but this is just another form of income tax," he added.

"If this is going ahead, we must make allowance for those who paid stamp duty at the peak, but we must see exactly to what degree Dublin taxpayers will be subsidising those down the country."

Dun Laoghaire TD Mary Mitchell O'Connor said her major concern about the tax was for those who paid stamp duty at 9 per cent who would be burdened by this new tax.

She said: "This proposed tax takes account of people's ability to pay through a series of deferral arrangements but it does not take account of those who paid stamp duty of up to 9 per cent at the top end of the market. Many of those buyers had to borrow the money to pay that stamp duty. It would be galling if other counties did not pay and expected Dun Laoghaire residents to subsidise them."

Peter Mathews TD said many people in south Dublin simply won't be able to pay the tax or would have to sacrifice "dental work" for their children.

"I can see that there's going to be for those people who would in theory like to pay it, an inability to pay it. If you have a €650 after-tax bill on a modest enough house in south Dublin, that's a lot of money. Sure they're giving up things that they would have considered worth fighting for, things like dental correction work for children; all those things are being cut out," he said.

He added that owners of one-bed apartments in Dublin were far more likely to have borrowed heavily than owners of four-bed detached houses outside Dublin.

"You might find also that the income-generation capacity of the one-bed apartment owner is far more volatile than the owners of the four-bed house," he said.

In March, homeowners will receive correspondence from Revenue as to the amount of property tax they will have to pay when the tax comes into force in July. This year homeowners will only be liable for half of the full charge. The full tax will be levied from January 1, 2014.

Report by DANIEL McCONNELL and RONALD QUINLAN - Sunday Independent

Monday, 21 January 2013

Dubliners Hit Hard...

How this crippling new homes levy will hit Dubliners 3 times as hard...

DUBLINERS face having to pay almost three times as much property tax as householders outside the capital. The controversial tax is due to be rolled out across the board this summer at a 0.18pc rate of the value of the property.

But the discrepancies between how much householders in the capital will have to pay compared to people living in towns and cities elsewhere suggests the tax may be one of the most divisive ever.

Today the Herald highlights the disparity between the charge on homes in Dublin and two medium-sized towns, close to Cork and Galway cities.

We have selected three types of houses - a four-bed detached, a three-bed semi-detached and a three-bed terraced - for comparison purposes. The big difference between the houses in each type is their location and price.


Homeowners are due to receive an estimate on their bill from the Revenue in March.

They must submit their valuation by May 28 and this will determine the rate for the next three years.

The disparity between what residents of Dublin and elsewhere will pay has already caused a rift in Fine Gael.

Olivia Mitchell is one of those TDs who has railed against the calculation method.

The Dublin South TD said the tax is grossly unfair on those living in the capital.

"I am hoping that Minister Phil Hogan will realise that the situation as it applies to Dublin is really unfair," she told the Herald.

"Yes, houses are dearer here but I want for us to pay for what we get in Dublin and not services in other parts of the country.

"I would like to see that the big houses will pay more than smaller houses right across the country but that everyone only pays for the services that are provided in your area. It is a local tax and it should remain a local tax."

Ms Mitchell admits that it is unlikely that there will be any change at this stage, but hoped there would be next year.

Michael Kitt, Fianna Fail TD for Galway East, agreed the current property tax system was unfair. However, he described it as "utter hypocrisy" for a Government backbencher to voice concerns at this late stage.

"I think it is utter hypocrisy to be raising this issue now when we were guillotined from discussing the matter properly in the Dail and were only given a few hours to discuss the matter.

"I believe she's right in that it is unfair and people in the east are getting hit harder.

"But it will be a huge hit to families all over the country who are already struggling to pay mortgages and bills. This will be hard on families, no matter where they are," he added.

Environment Minister Phil Hogan agrees there is an imbalance in the way in which the tax will be levied.He compared the property levy to motor tax, explaining that the vast majority of motor vehicles are on the east coast, but these help pay for roads throughout the country.

"Obviously the monies that come in through the motor tax, or the property tax, are predominantly going to be coming from the east coast of Ireland and major urban areas," he said.


As the issue continues to build steam, the Dublin Chamber of Commerce have come up with a table based on property website Daft's asking prices to highlight the significant differences around the country.

Director of policy Aebhric McGibney said the tax is "inherently unfair" and that many people are living in the capital out of necessity rather than by choice.

"Two people who have exactly the same type of house will pay a vastly different type of tax depending on where they live," he said.

"Someone in north County Dublin could pay €400 but then someone in Carlow or Mayo will pay just €90. A lot of people don't have a choice, they pay a lot more of their salary to have the privilege of being near to their job.

"It seems perverse to provide an incentive to people to live further away from their job. The property tax as structured could create the urban sprawl in the Dublin area in rural areas," he added.

Repoet by Claire Murphy, Caroline Crawford and Ralph Riegel - Evening Herald

Friday, 11 January 2013

Irish Property Crash 2013

Another year over, what do we know?

Five years on from the crash, what have we learned? There is no magic solution but we are still thinking like an island.

In the end, not even sex could sell Belmayne. Nearly six years ago the north Dublin estate seared itself in the nation’s memory, with images of couples cavorting on kitchen counters, all in the desperate hope of arousing interest in an increasingly flaccid property market. At the now infamous launch party, the developer of Belmayne, Donal Caulfield, wearing a diamante-studded Roberto Cavalli beanie, promised buyers “gorgeous living” in four-bedroom houses with curved walls, all for €600,000. (Below: one of the famous “gorgeous living” ads)
The “gorgeous living” hoardings are long gone, as are the prices. No-nonsense signs on the Malahide Road now advertise houses in Belmayne starting from €245,000.
Belmayne is just one attraction in north Dublin’s property market Ground Zero. In 10 minutes you can drive from the evacuated fire hazard of Priory Hall, past the boarded-up boxes of Balgriffin and hundreds of homes from Kinsealy to Baldoyle buckling on unstable foundations.
Entering Belmayne through its massive stone portal, a throwback to a more confident era, is a pleasant surprise. The streets are tidy, as are the cream plaster and brick facades. Green spaces have just been planted, fences have been added and there’s talk of allotments.
A new Chinese restaurant has opened, two men are adjusting the sign on a new Polish shop, and around the corner the Macari’s takeaway is doing a steady trade. When it opened, in the dark days of April 2010, Macari’s was the only business here but it is now surrounded by other stores. Customers say that, overall, Belmayne has become a more neighbourly place.
“We’re quite happy here,” says the owner, Lydia Macari, who is the third generation of the chipper dynasty. “Residents are positive now and take pride in the area, houses are filling up, and the area’s more inviting. If you’re driving by, you can finally see a bit of light.”
There’s still a lot to do: a fence behind the final row of houses exposes the muddy expanse on which half of Belmayne was never built. Missing, too, are promised facilities such as schools, a library and a medical centre. Remedial construction work is ongoing, although there is no quick fix for the reality of negative equity. But in dealings with local authorities and Belmayne’s developer, resilient residents seem determined to improve what they can.
Turning things around in Ireland – which is, for some of our neighbours, the Belmayne of Europe – is a bigger challenge.
As 2013 begins, with the countdown running on the EU/IMF programme, expectations are growing on what lies ahead. Will a return to financial markets close the book on a chastened chapter or just open another?
It will be difficult to convince our European neighbours to relieve us of our legacy banking debt. As this crucial year begins, can at least minimum consensus be found on the past crisis to agree any resolutions for a common future? Recent attempts by politicians to stitch together a collective narrative – “We all partied”, “You are not responsible for this”, “We went mad borrowing” – have backfired spectacularly.
Political perspectives 
“I sense among voters a higher awareness that if a political party proposes something that is too good to be true, it probably is,” says Paschal Donohoe, the Fine Gael TD for Dublin Central. “In the next general election, anyone aspiring to government who puts forward a manifesto that is uncosted or that raises unrealistic expectations will deal a terminal blow to their party.”
In Galway West, Fianna Fáil TD Eamon Ó Cuív says the country has undergone a three-step process: first, the spendthrift ways of the boom and then, early in the EU/IMF programme, a hope that there was an easy way out. “Now, having changed government with new drivers in the saddle, there is a realisation there is no magic bullet and only a minority think the need to balance the budget is not real,” he says.
“Some people might think that the day the EU/IMF leave they will remove all strictures in terms of getting the deficit down but new lenders, the markets, will be no less severe in demanding a good performance.”
Next month’s repayment of the debt relating to Anglo Irish Bank coincides with the 70th anniversary of one of the most famous speeches by his grandfather Éamon de Valera. Often dismissed for its idealised imagery of “cosy homesteads”, the speech sounds a warning to a nation in hard times not to succumb to easy temptations.
Quoting the Young Irelander Thomas Davis, de Valera said that striving for an ideal Ireland was not a Utopian pastime for the Dublin elite in the good times but the “solemn, unavoidable duty” of all Irish, at all times. De Valera’s own ideal Ireland was one made up of “people who valued material wealth only as a basis of right living”.
Lessons for the future 
The journey from de Valera’s “right living” to Belmayne’s “gorgeous living” has brought the country to a crossroads where, as anyone who reads de Valera’s speech will see, no one ever danced. What Ireland does best is to get on with it.
In Baldoyle, not far from Belmayne, business is going well for FP Fogarty Belting. For 40 years the company has manufactured many of Ireland’s industrial conveyor belts that carry everything from bread to baggage. Comfort food and emigration are company mainstays at the moment but the director, Daragh Fogarty, says that, like many, he now has to work harder for less. “Customers are making big capital investments, which is a good sign that they see a future in their business,” he says. “The Irish food sector is thriving and I know we’re lucky not to be in a sector like construction, which is still on its knees.”
After buying his home, Fogarty bought an additional investment property, at the height of the boom, that is now worth a fraction of the purchase price. “I’m not blaming the banks for lending me money though it’s true there wasn’t any regulation,” he says. “Banking friends of mine had a wild life. When they went out they regularly put the company credit card behind the bar. That’s not happening now.”
Tighter financial regulation is an important lesson of the recent crash that will stand to the country, says John McHale, professor of economics at NUI Galway. He is also a member of the Fiscal Advisory Council. “With the economy stabilising, even a slow return to growth in domestic demand could see things turn around surprisingly quickly,” he says. “When a boom comes again, if the Government goes back to the old habits of spending money when it has it – the McCreevy philosophy – the Fiscal Advisory Council would be quite outspoken in its response.”
Other economists, such as Michael Taft of the trade union Unite, say such views prejudice an already limited debate on Ireland’s next chapter. “We tend to think as an island, not interested in how other countries dealt with their crises by maintaining demand or keeping people at work on a part-time basis,” he says. “Instead we just say, ‘We’re spending too much’, and cut.”
He is concerned at the lingering damage of crisis-era attacks on the public sector. “Beating the drum against one way of doing things, the public way, means you have only the other way: the private way,” he says. “That doesn’t give choices, strengthen democracy or improve people’s capacity to participate as citizens. Instead, they are reduced to participating as consumers.” As Ireland heads toward the bailout door, Taft would like to see broader debate about the consequences of economic decisions. A century on, he says, the time has come for people to embrace the slogan of the 1913 Lockout: “No decision about us without us.”
Will it be an inward debate or is Ireland ready to hear unvarnished truths from foreign perspectives, such as that of New York-based writer and builder Barry McKinley? “The sense of entitlement that developed during the Tiger years has all but disappeared, but I have a feeling that as soon as we can afford our bad habits, we’ll happily go back to them,” he says. “Nevertheless, we’ll come back from the brink: we always do.”
The danger of predictions 
The economic meltdown has been a disaster for some and has offered clarity to others. But, after discarding God and losing faith in Mammon, who decides in modern Ireland what de Valera’s idea of right living actually means? Is there anything wrong with a little gorgeous living now and then, once it’s not lying spreadeagled on an overpriced kitchen island? With many people struggling to get through this month, let alone this year, it may seem cruel or Utopian to be thinking about a better future. But, like all new year’s resolutions, thinking about the next step is not about senseless self-denial now.
Thinking about a better tomorrow in a tough today has a long Irish tradition, from Davis to de Valera. “De Valera’s language is quaint but the idea is not so off the wall,” says Éamon Ó Cuív. “Right living might be an old-fashioned term, but if you put it into a modern context, he is saying that economic success is simply a means to an end, of ensuring everyone in this country has the best quality of life possible to enjoy our culture, our environment and our community.”
Other voices What’s changing in Ireland?

PASCHAL DONOHOE Fine Gael TD, Dublin Central 

Has Ireland changed, for good or ill? Entire families emigrating was the worst change; the amazing performance of high-tech businesses is a sign of the best kind of change.

Will change persist or will old ways return? Banking union and strengthened euro governance will make it difficult for old ways to return.

Has there been any change in the political culture or in the expectations of the electorate? All policies have costs and consequences. You might defer them but you cannot avoid them.

What have you learned about yourself and about Ireland? For myself: never take anything for granted. For Ireland: our strength is awesome but digging so deep for so long comes at great social cost.

JOHN McHALE Professor of economics, NUI Galway 
Has Ireland changed? Financial regulatory and supervisory regime are greatly improved, and there are stronger fiscal rules and institutions.

Will change persist? Institutional changes will persist after the bailout, making boom-bust cycles less likely.

Has there been any change in the expectations of the electorate? It’s surprising there hasn’t been more focused demand for institutional change and accountability across the public and private sectors.

What have you learned? Irish pragmatism has been an asset. The challenge is to combine this with demands for reforms of institutions that have clearly failed.

BRENDAN CONNELLAN Former Wall Street trader, now a New York-based playwright 
Has Ireland changed? During the boom Ireland become much more crass. Now there’s an effort to reclaim our interest in the arts, which may not pay the bills but makes us happier.

Will change persist ? There will be no going back to the comfortable ways of a cosy little island being pleased with itself.

Has there been any change in the political culture? It’s likely there will be a new party in Ireland within two years, something like the PDs of old, that will have 20-25 per cent of the vote in no time.

What have you learned? Ireland is more robust than it seems and is perversely well suited to buckling down in a crisis but tends to repeat its mistakes in a cycle.

MICHAEL TAFT Research officer with the union Unite 
Has Ireland changed? People are having to live with a lot less.

Will change persist? Even though there are limitations on the economy, there is not just one programme to which everything is reduced. There are choices to be made.

Has there been any change in the political culture? It’s the same political rhetoric; it could be called a one-policy state of squeezing wages, services and the idea of a public realm.

What have you learned? There is a loss of morale and confidence. A lot of people are hanging on but I don’t think they can be led into a selfish life.

RALF SOTSCHECK Ireland correspondent of Germany’s Tageszeitung daily 
Has Ireland changed? The relaxed vibe is gone, in favour of the “time-is-money” philosophy. One indication: more car horns.

Will change persist? The banks haven’t changed their ways. Without fundamental bank reform the next crisis is a certainty.

Has there been any change in the political culture? Ireland’s political culture has been based on greed and corruption for 40 years. People are sick of the choice between cholera and plague.

What have you learned ? The EU has become a rich man’s club that protects rich people at the expense of middle- and lower-income people.
Report by - DEREK SCALLY - Irish Times

Wednesday, 9 January 2013

Irish Property Prices To Fall Another 20pc ...

HOUSE prices could decline by another 20pc from their current levels while variable rates are due to go up again, an international agency has warned.
And ongoing rises in mortgage arrears mean borrowers in this country are effectively on strike, credit ratings agency Fitch said.
But despite this, there is likely to be a moderate rise in lending to first-time buyers this year.
The agency, in a report on the global mortgage market, said property prices here could fall as much as 20pc, but it has assumed a 10pc decrease.
Since the bursting of the property bubble, prices have dropped by 50pc, to take the average value to €160,000.
Another 20pc fall would take the average price nationally to €128,000.
The agency, which rates the economic solidity of countries and companies, said there were signs that prices have stabilised, but a glut of unoccupied properties outside the cities and muted mortgage lending meant price rises were likely to be limited this year.
The number of people behind on their mortgage repayments is set to continue to rise. Most of the 86,146 mortgage accounts where no payments had been made for three months or more were actually six months in arrears, Fitch noted.
In a section of the report headed, 'Irish borrowers on strike', Fitch said that despite economic stabilisation, arrears continue to go up.
Lenders were unable to carry out large-scale repossessions because of a loophole in the law. This was encouraging some people to stop paying their mortgages, Fitch said.
"In addition, borrowers in arrearsare also likely to benefit from significant debt write-offs when personal insolvency legislation becomes effective," the ratings agency said.
Unemployment and high levels of negative equity meant that the arrears situation was set to get worse. But it said housing affordability was the one bright spot in the market here.
Mortgage rates would remain low, but it warned that banks had already pushed up their variable rates last year. Both Bank of Ireland and AIB imposed steep rate hikes on their variable rate customers last year.
The average variable rate across the market is now 4.3pc, but by the end of this year it is likely to have climbed to 4.7pc, the ratings agency said.
"Fitch anticipates depressed mortgage lending, continued declines in house prices and pressure on incomes and consumer confidence," it said.
The ratings agency said that access to mortgage lending will continue to hamper property markets in a number of countries, including Ireland.
A rise in mortgage lending in the first half of last year, and a greater proportion of mortgages being taken out by first-time buyers were seen as positive signs. But it said that despite this, mortgage lending continues to be subdued.
On Sunday, Permanent TSB said it had €350m available to lend for new mortgages this year. The money is coming from €12bn that customers have on deposit with Permanent TSB. It has received €4bn in taxpayer bailouts.
The €350m in new mortgages could mean an extra 2,000 house sales, based on the typical €166,000 home loan advanced last year.
And former building society EBS has committed to ramping up lending. Last year, the majority of mortgage loans were issued by AIB and Bank of Ireland, with KBC Bank and EBS issuing a small number of loans.
Fewer than 10,000 mortgage loans were issued in the first nine months of last year, according to the Irish Banking Federation.
Fitch said there were too few lenders active in this market, while those that are lending have major issues with arrears.
But despite that, the report noted: "The first-time buyer market offers some small hope. Fitch expects the current low transaction levels to moderately increase."
Report by Charlie Weston - Irish Independent

Monday, 7 January 2013

Property Tax Estimate In The Post

Revenue table of local property tax bands at a tax rate of 18% for 2013 and 2014:

Revenue is to send homeowners an estimated value of their home and property tax due, in letters to be issued in the coming weeks.

The local property tax payable on the market value of a property is to come into force from July and will be administered by Revenue.
Revenue will write to residential property owners in March including notification of an estimated amount of local property tax, a booklet on the operation of the tax, valuation procedures and payment methods and a form for completion.
The completed forms with a self-assessment of property value will have to be sent back to Revenue by May 7th on paper or May 28th electronically. The return will be valid until 2016 unless circumstances change.
If Revenue believes the amount of property value declared does not reflect the market value, it may question the declaration.
If people refuse to pay or do not send back the form the tax will be deducted at source, by sheriff or court action or attachment orders based on Revenue’s estimate of value, Revenue said
Revenue will develop a register of residential properties using sources such as Revenue data, household charge data and Private Residential Tenancies Board data.
The amount to be paid will be based on market value as of May 1st 2013 and will be divided into market value bands starting at €0 - €100,000 and going up by €50,000 per band up to €1 million. The liability at 0.18 per cent will be calculated at the mid-point of the band.
Properties valued over €1m will be assessed at 0.18 per cent for the first million and 0.25 per cent on the value above a million.
Payments can be made in one single payment or instalments from July.
Among houses exempt from the tax will be newly constructed properties which are unoccupied and unsold, mobile homes and houses in certain ghost estates.
Temporary exemptions include until the end of 2016 include new and previously unused properties purchased from a builder or developer between January 1st 2013 and October 31st, 2016 and second hand properties purchased by a first time buyer this year.
Report by GENEVIEVE CARBERY - Irish Times

Saturday, 5 January 2013

Homeowner Warning For 2013...

Homeowners warned against 'fixing' values...

HOUSEHOLDERS are already planning to deliberately undervalue their houses to cut down on their property tax bills, a government TD has claimed.

There are fines of up to €3,000 in property tax legislation for those who knowingly make a false declaration.

But FG Dublin North TD Alan Farrell said he had learnt that some householders in his constituency were discussing a 'price-fixing' system – so that all the people in their street or estate would provide the same deliberately low value to the Revenue.

"I think there would be nothing worse in the present economic environment if we had a two-tier system where some people were fiddling the system, while others are doing the right thing," he said.

The property tax will be charged at 0.18pc of the current market value of a house, with householders paying six months of the tax this year from July 1.

Mr Farrell, who worked as an auctioneer before he was elected to the Dail, urged the Revenue to publish the guidelines for house owners to calculate the value of their houses as soon as possible. He said otherwise it could lead to residents being pressurised by their neighbours.

"I find this to be extremely worrying. No individual should be put in a position where they feel obliged to undervalue their property, or mislead the Revenue Commissioners," he said.

He also called on estate agents to provide free valuations of houses for people as a gesture of goodwill rather than charge high fees.

The Government's own civil servants warned in advance of the dangers of people deliberately under- valuing their houses to minimise the amount of tax they have to pay.


As a result, the property tax law gives Revenue the power to come in and inspect a home to assess its value for the property tax. There is also a €3,000 fine for deliberately making a false declaration.

A Revenue spokeswoman said it would be providing house owners with guidance about how to value their properties early this year.

"If you follow Revenue's guidance honestly, we will accept your property value assessment," she said.

Junior Minister Brian Hayes said he believed that the Revenue Commissioners would be able to collect the correct property tax from households.

"They have a superb record of collecting tax. If there's a problem, it will be dealt with," he said.

Report by Michael Brennan - Irish Independent