Ireland moves to control rent rises

caronoel

By reducing the tax burden on Landlords:
http://www.telegraph.co.uk/investing/buy-to-let/irelands-scrapping-of-buy-to-let-tax-is-warning-to-britain

I do hope Hammond is sitting up and taking note

Imposing exhorbitant tax on landlords will simply result in a substantial rise in rents paid by tenants

Thrugelmir

caronoel wrote: »

I do hope Hammond is sitting up and taking note

Eire has suffered years of severe austerity in order to balance the books. Unlike the UK where the correction has been more gentle and is yet incomplete. Comparing apples with pears has no meaning. There's no certainty that the tax regime will remain in place forever either. Eire has some years to go before the policy totally reversed as well.

padington

Thrugelmir wrote: »

Eire has suffered years of severe austerity in order to balance the books. Unlike the UK where the correction has been more gentle and is yet incomplete. Comparing apples with pears has no meaning. There's no certainty that the tax regime will remain in place forever either. Eire has some years to go before the policy totally reversed as well.

The policy just jacked up rents and took money out of the economy, exactly the kind of money that would have otherwise been spent and stimulated the economy. Bad move there, bad move here.

Maybe good politics but bad economics.

Thrugelmir

padington wrote: »

The policy just jacked up rents and took money out of the economy, exactly the kind of money that would have otherwise been spent and stimulated the economy. Bad move there, bad move here.

Maybe good politics but bad economics.

Austerity isn't a la carte menu where one can choose what one wishes. Only fair that speculators bear their share of the pain as well.

padington

Thrugelmir wrote: »

Austerity isn't a la carte menu where one can choose what one wishes. Only fair that speculators bear their share of the pain as well.

It's a bad tax because it hits generation rent hard. Rent in Ireland has gone up terribly. It will do the same here. That will pull spending money out of the economy and be doubly bad for all.

Thrugelmir

padington wrote: »

It's a bad tax because it hits generation rent hard. Rent in Ireland has gone up terribly. It will do the same here. That will pull spending money out of the economy and be doubly bad for all.

You are picking on one measure that was introduced in 2009 out of a whole raft of taxation increases to raise revenue. The Uk has to do likewise. That's the reality. Every taxation change has an impact. People just have to accept it and get on with life.

Marktheshark

Ignoring the most important factor in rent levels.
Supply and demand.

The population is rising 8x faster than we are building houses.
Forget tax affairs, Landlords are in it to make money, the more demand outstrips supply the faster rents rise.
Landlords do not put rent up because of their tax bill, they charge what they can get away with in a renters market.

The sad truth, it can only get worse, much worse.

chucknorris

Thrugelmir wrote: »

Austerity isn't a la carte menu where one can choose what one wishes. Only fair that speculators bear their share of the pain as well.

I honestly thought that you would have appreciated that loan interest is a perfectly legitimate business expense. I must add that I do agree that we are all in it together etc. but how come other businesses can still deduct their loan interest as an expense in full?

It doesn't actually affect me that much, but it still doesn't make it right, the withdrawal of the wear and tear allowance affected me more, but I can see the logic in that, so I have no problems with it, it was just bad luck to lose that benefit.

chucknorris

Marktheshark wrote: »

Landlords do not put rent up because of their tax bill, they charge what they can get away with in a renters market.

We did, we were renting at about 10% below market value, when the tax changes were announced we increased our rents by about 5% (more than we would have otherwise). But then the rental market seemed to also increase significantly (presumably other landlords were doing the same), so we did it again the following year.

We (my wife and I, I'm not speaking for all landlords) don't charge what we can get away with, because we want a wider choice of tenant, and also to reduce the risk of rental voids.

caronoel

chucknorris wrote: »

We did, we were renting at about 10% below market value, when the tax changes were announced we increased our rents by about 5% (more than we would have otherwise). But then the rental market seemed to also increase significantly (presumably other landlords were doing the same), so we did it again the following year.

We don't charge what we can get away with, because we want a wider choice of tenant, and also to reduce the risk of rental voids.

Mrs Caronoel and I both charge below the local market levels in Clapham, but we will have no choice but to significantly raise rents this year to recoup some of this crude populist tax grab.

System

BTL landlords got off lightly IMO.

I would have restricted them to new build properties and increased LTV as starters.