Daft Property - Irish Property News

Homeowners' guide to calculating and paying the new tax... From next week 1.9 million homeowners will start getting letters from the Revenue outlining how they are to pay a new local property tax which is to replace the household charge that was introduced two budgets ago. Property tax? But I paid a fortune in stamp duty when I bought my house at the height of the boom. Surely I can’t owe more money on a property that is now worth half of what I paid for it? Yes you can. The Government, has decided to ignore the massive amounts of money it collected from us in property-related stamp duty over the last decade or so and start on a blank page when it comes to property tax. The good news (for the Government) is that it should raise €500 million a year from the new tax. How much will this one cost me?  Well it depends on where you live, but the good news is that the majority of people will be expected to pay less than €500 a year thanks to the all but total collapse of th...

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 ...

Number of mortgages in arrears hits new peak of 14pc... ONE in seven mortgage holders is now in arrears, according to calculations by a leading ratings agency. Large numbers of these homeowners are understood to be avoiding getting into talks with their banks on restructuring their mortgages. Moody's also said house prices would fall another 20pc. The rating agency said its calculations show 14pc of residential mortgage holders are now in arrears, which works out at 107,000 households. This is a new peak, it said. Figures released by the Central Bank last month showed 10.2pc of mortgage holders were three months or more behind on their payments. "The steep decline in house prices since 2007 has placed the majority of borrowers deep into negative equity," it said. "Irish house prices have already fallen by 49.9pc between September 2007 and April 2012, and Moody's expects that house prices will fall a further 20pc from today's levels." Central Bank figu...

Record 70,000 now behind on mortgage payments... MORE borrowers will be pushed into arrears on their mortgage payments because of rising unemployment, a ratings agency predicted yesterday as new figures show the number in trouble surged to 68,248 in July. That figure represents an increase of 12,485 in the numbers who are behind by three months or more on their mortgage payments when compared with last April. Overall, almost 9pc of homeowners are now in arrears. Ratings agency Moody's said it expected more borrowers to be pushed into arrears as jobless numbers increase. Moody's figures tend to be more up to date that those of the Central Bank which last month said arrears had risen to 7.2pc in June, leaving 55,763 homeowners three months or more in arrears. The Moody's figures imply that 22,231 have not paid their mortgage for a year or more, calculations based on their statistics show. These homeowners are at serious risk of losing their homes, home-loan experts ...

Noonan: no lottery style payout for mortgage debt crisis... FINANCE Minister Michael Noonan yesterday promised that the Government will act swiftly to deal with the mortgage-debt crisis -- but insisted the solution will not be a "big pool of money in substitute for the lottery". The comments came as Mr Noonan insisted it was "not realistic" to expect the Government to sanction universal "debt forgiveness" for borrowers who bought at the peak of the market or have run into trouble with their mortgages. At a meeting of the Finance Committee yesterday, Mr Noonan repeatedly stressed that he would not second-guess the work of an interdepartmental group due to report on solutions to the mortgage crisis at the end of September. But he categorically ruled out any role for universal debt forgiveness, insisting it was "not possible" and that "nobody should think there's going to be some big pool of money to be handed out as a substitute fo...

Insurer refuses to pay for pyrite damage in buildings... HomeBond leaves owners facing bills of €70,000. Thousands face bills of up to €70,000 to repair pyrite damage to their homes after a leading building insurer refused to meet claims. HomeBond, the building insurance agent, has contacted the owners of affected properties to tell them they will not accept liability or pay out on claims. Some homeowners who had already been offered compensation have now been told that these offers no longer stand. Junior Minister and Meath East TD Shane McEntee, who has represented many of the affected families, described the move as "shameful". It follows a High Court case in which it was ruled that a quarry from which pyrite-infected material was sourced was culpable for the condition of the buildings it supplied. Last year it was estimated that around 20,000 claims had been made to HomeBond in relation to pyrite -- a mineral that expands in the presence of moisture and oxygen...

Euro crisis to freeze mortgage rate for year... HOMEOWNERS will be spared mortgage increases for up to a year -- but face heavy losses in the value of their pensions as markets plunged all over the world. The deepening euro crisis means interest rates are unlikely to rise for another year -- a reprieve for those on tracker mortgages. But the short-term relief could be seriously offset by the decline in the value of pensions and investments. They were worth hundreds of billions less after all the main European markets crashed by between 3pc and 4pc. US markets also closed well down - at 4.8pc - last night. And there are fears even more losses could pile up later today. The European Central Bank (ECB) left its key interest rate unchanged and gave no signal of an imminent rise at its monthly meeting in Frankfurt. Markets reacted by betting there would now be no further rate rise until well into 2013 -- as the euro crisis means the ECB cannot raise rates due to the fragile ...

Figures dispel myth that we're top home buyers in Europe... HOME ownership in Ireland is in line with the average in the European Union -- debunking the myth that home ownership here is among the highest in the EU. The Spanish, Greeks, Portuguese and people in a host of former Eastern Bloc states all have higher ownership levels than Ireland, figures obtained by the Irish Independent show. Some 74pc of Irish people own their own home. This is in line with the average for the 27 members of the EU. Ireland ranks 18th in home ownership levels out of 31 countries looked by the the EU statistics agency Eurostat. The figures are for 2009, the latest available. The highest home ownership is in Romania (96pc), followed by Lithuania (91pc), Hungary (89pc), Slovakia (89pc), Estonia (87pc), Latvia (87pc), Bulgaria (87pc), Norway (85pc), Iceland (84pc), Spain (83pc), Slovenia (81pc), Malta (79pc), Czech Republic (77pc) and Greece (76pc). Ireland comes in at 73.7pc, while 70pc of pe...

Finding new ways to solve the personal debt crisis Many homeowners have trouble making monthly repayments but there are ways to ease the burden... WITH about 86,000 homeowners now struggling to repay their mortgage, and four times more debtors seeking free legal advice than did in 2007, Ireland is in the midst of a personal debt crisis. We need solutions, and we need them quickly. What could they be? Write off mortgages A homeowner who is battling to repay a massive mortgage should be allowed to write off some of their loan, according to Michael Dowling, spokesman for the Independent Mortgage Advisers' Federation. This should make their mortgage more affordable and prevent them from either having to sell their home at a lower price than they paid for it -- or having it repossessed. "We need long-term solutions," said Dowling. "No one should be asked to leave their family home. But to make the debt-forgiveness solution palatable to other homeowners who are...

More than 60,000 homeowners fall 90 days behind on repayments... THE number of homeowners who are three months or more behind on their mortgage repayments has jumped to 60,000. Ratings agency Moody's released statistics yesterday showing 7.62pc of the home loans that have been sold off to investors are now 90 days or more in arrears. If this figure is applied across the entire 782,427 mortgages in the market, it means just short of 60,000 homeowners are now three or more months behind on their repayments. Figures from the Central Bank last month put the number of homeowners in arrears in the three months to March at just shy of 50,000, or 6.3pc of all mortgages. Now Moody's has produced figures for April showing the percentage in arrears has gone up from 6.65pc in February. This means an additional 8,000 mortgage holders fell behind on their payments between February and April. However, the Central Bank pointed out that the number of repossessions remained low at ...

More pain for PAYE workers as tax hike looks likely... THE GOVERNMENT is on the brink of breaking its election solemn promise not to raise income tax. The tax rise threat emerged as the European Central Bank (ECB) hinted that it is preparing to introduce a 0.25pc hike in interest rates next month -- which will add almost €400 yearly to the average €250,000 mortgage. The blow to struggling homeowners will be further compounded by a new property tax and water charge set to be introduced in the new year. Finance Minister Michael Noonan told the Dail yesterday: "I am not going to rule out any tax initiative, or any tax increase or any tax reduction." He added that the "fraught" condition of our public finances meant he was not in a position to predict take hikes, including income tax. The minister was also forced to concede that EU states such as France and Germany are looking to take an interest in the national assets of bailed-out states such as Ireland. ...

ECB interest rate hike to affect over 75% of Irish homeowners... THE EUROPEAN Central Bank (ECB) raised its main lending rate by a quarter of a point to 1.25 per cent yesterday in a move that will add about €40 on to the monthly repayments of a person with a €300,000 tracker mortgage. The announcement marks the first time in more than two years that tracker mortgage holders will feel the pinch of rising interest rates and it is expected to be the first of at least three rate increases over the next 12 months. It will see the cost of mortgages climb for more than three-quarters of Irish homeowners. For every €100,000 owed on a 30-year tracker mortgage of 1.5 per cent plus the ECB rate, a quarter point increase adds about €13 on to the monthly repayments. As a result of the ECB announcement, a person with a €300,000 tracker will see their monthly repayments rise by about €480 annually while someone with a €400,000 mortgage will have to pay a further €52.50 monthly, or €630 each y...

Property tax on way within year... THE Government has been ordered by the EU/IMF to impose a property tax on all homeowners within a year. The controversial annual tax is expected to be announced in December's Budget -- even though it was not in the Programme for Government. The imposition of the tax and the precise timeline for its roll-out are key requirements for Ireland to avail of the EU/IMF €85bn bailout package. And the Department of the Environment confirmed that the tax will rise within a year of being introduced. Details of how and when the so-called 'site-valuation tax' will be introduced and increased are in a briefing note prepared by civil servants for Environment Minister Phil Hogan. The document has been obtained by the Irish Independent. Under the heading "EU/IMF requirements", the document states that Ireland must "adopt a property tax by end Q4 (quarter 4) 2011", adding that this tax must then be increased by the end of 201...

Struggle to pay bills is about to get much worse... With a swathe of EU interest rate hikes coming our way, mortgages will shoot up by thousands of euro a year: THE President of the European Central Bank (ECB), Jean-Claude Trichet, shocked us all last week when he suggested that the next ECB rate hike could be as early as this April. There are already 60,000 homeowners struggling to pay their mortgages. With a raft of European interest rate hikes on the cards, many of them will find it even harder to pay their mortgage in a few weeks' time -- and tens of thousands more homeowners will share their fate. We all knew that the ECB interest rate -- which influences the amount of interest you pay on your mortgage -- was on its way up. Yet surging oil prices and a pick-up in eurozone inflation mean this rate hike will now happen a lot sooner than we ever expected. Some economists believe the ECB rate could increase four times this year. As the ECB rate has been at an all-time ...

BANKS RISK making people homeless and adding further vacant houses to an already struggling property market if they raise mortgage interest rates too much, Minister of State for Housing Michael Finneran has warned. He has urged a new government to use its influence with the banks to ensure families do not lose their homes as a result of aggressive interest rate increases. “I am appealing to the banks . . . It would be a terrible, unfortunate thing that we have vacant properties all around this country and we created more vacant properties because people were not able to make repayments. That would be a scandal, and should not be allowed,” said Mr Finneran yesterday at the launch of a new service for homeless people. He said many families were now at the “pin of their collar” and there was a certain level at which they would not be able to make repayments on their homes. He said the number of family homes repossessed in the recession was still very low due to the leniency of the...

Grinding despair of negative-equity generation hangs over all our lives... All truth passes through three stages. First it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident. Arthur Schopenhauer Ireland, 2031. A teenager and his teacher are walking out of an economics class. "My God, what lunacy," says the teen. "I can't believe that the banks were allowed to behave like that." "I know," answers his lecturer. "Imagine, they were able to sell full-recourse mortgages to naive first-time buyers, often way over 100 per cent, without any risk to themselves whatsoever. No wonder they all went mad and pushed money on any poor sod they could." "And then when the crash came, all the big property borrowers and the banks were protected by the Government via Nama and the bank guarantee, while all the small homeowners were screwed?" "Correct, son." "That's not capitalism,...

Up to 300,000 homeowners in negative equity Further 30,000 will struggle with mortgage payments after Budget tax increases kick in... THE spectacular fall in property prices is even worse than was stated by a government economic think tank last week -- up to 300,000 homeowners are now in negative equity. Expected interest rate hikes will mean another 30,000 people -- roughly the population of Dundalk -- will struggle to meet their mortgage payments by the end of the year. The recession, joblessness and rising interest rates already mean that 70,000 borrowers have missed payments or renegotiated their mortgages. Now financial institutions are expected to increase their standard variable rates. It is also widely expected that the European Central Bank will increase its interest rate before the end of the year. This would also hit those on tracker mortgages. Michael Dowling, of the Independent Mortgage Advisors Federation (IMAF), said: "With rising unemployment, higher ...

Householder to carry heavy can for errant banks... HOUSEHOLDERS will be hammered. That is the clear message from the four-year austerity plan issued yesterday by the Government. In plain language, if you own a home, have a pension and a son or daughter in college, you will end up more than €4,600 a year worse off by the time all of the changes in this plan have been implemented. Many of the changes will impact early on in the four-year plan, putting additional pain on family budgets. Middle Ireland is set to pay an extortionate price for the failures of our banks, our regulators and the Government. And significantly, there are no measures in the four-year plan to levy the errant banks. Instead, homeowners will bear the brunt. Personal finance experts last night warned the taxes, levies and charges would push many families over the edge financially. The downturn has left many consumers just one bill away from financial collapse. The severe measures in the four-year plan could be enough ...

HOMEOWNERS face paying an €80-a-month property tax under a plan drawn up by the country's top economic think-tank. The charge would be based on the value of homes, and middle-income earners would end up providing most of the tax generated, the study by the Economic and Social Research Institute says. Homeowners who bought their house and paid stamp duty in recent years would be given a waiver, as they would be regarded as having already paid a property tax. Those on low incomes and people getting social welfare benefits would be exempted from the payment. Even with these exemptions, a property tax could still bring in close to €1bn a year, as the Government draws up plans for a €15bn package of cuts and taxes over the next four years. There are 1.7 million households in the country, but the exemption scheme would mean up to 235,000 householders would not have to pay the tax, the ESRI says. But the study, which sets out how a property tax would work, warns that exempting those with ...

Be prepared for a double whammy of property and water levies... PROPERTY tax isn't going away -- and it might be introduced at the same time as water charges. Homeowners who thought they would be spared the controversial taxes for the foreseeable future have been told that they are still firmly on the Government's Budget agenda. As the Cabinet prepared to meet for its final session before the summer break, Justice Minister Dermot Ahern reignited the debate over domestic taxes. It had been believed that property tax would be shelved, despite the Government's need to make a €3bn adjustment in December's budget. But yesterday, Mr Ahern said: "That may include a property tax and charging for water - which are in every other European country." Dragged He also warned that low paid workers could be dragged back into the tax net. "There's a relatively small percentage of people who are paying tax. But 50pc of people are not paying a bob of tax. That is not su...