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 Post subject: Budget 2017
PostPosted: Wed Sep 28, 2016 7:15 am 
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Too Big to Fail

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Posts: 3073
Location: Cathair na dTreabh
Held on 11 October
Being widely leaked two weeks in advance

Two lowest USC rates being reduced to 2.5% and to 0.5%
A reduction in capital gains tax for start-up companies to 10% on earnings up to €10m.
A special deal for farmers that will allow more flexibility in their tax payments.
Inheritance tax exemption to be raised to €320,000.
Incentives to encourage the regeneration of historic dwellings.
Doubling the €550 income tax credit for the self-employed.
Tax relief for landlords on mortgage interest for residential properties to be raised by 5% each year for 5 years.
€10k benefit for first time buyers
A hike to cigarette prices and diesel.


Last edited by temene on Tue Oct 11, 2016 11:21 am, edited 1 time in total.

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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 7:38 am 
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Posts: 655
temene wrote:
Tax relief for landlords on mortgage interest for residential properties to be raised by 5% each year for 5 years.


How're they spinning this one?


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 7:55 am 
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Evil_g wrote:
temene wrote:
Tax relief for landlords on mortgage interest for residential properties to be raised by 5% each year for 5 years.


How're they spinning this one?


"It'll lower prices as landlords will be able to make the same after tax return for a lower rent"

This is of course is absolute nonsense - if the market can sustain X gross why the hell would any sane person not charge X

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Borrowers seeking mortgages have had to resort to saving deposits, forcing many to sit by and watch house prices tumble without being able to do anything about it. Sunday Independent - June 1 2008

I know a lot of them, like [Jimmy] Flynn, [Noel] O’Flaherty and the Baileys. You meet the Baileys at Croke Park every time you go there. You can’t avoid getting a slap on the back going in from them. Most of these guys lost their shirt. I feel sorry for them - Bertie Ahern


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 8:47 am 
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Too Big to Fail
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Posts: 4394
Location: Mesopotatia
Evil_g wrote:
temene wrote:
Tax relief for landlords on mortgage interest for residential properties to be raised by 5% each year for 5 years.


How're they spinning this one?


Maybe it's just for the SME landlord and not the Hedge/Vulture/Investment funds :twisted:

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The real damage is done by those millions who want to 'get by'. The ordinary men who just want to be left in peace. Those who don’t want their lives disturbed by anything bigger than themselves. Those with no sides and no causes. Those who won’t take measure of their own strength, for fear of antagonizing their own weakness. Those people who roll up their spirits into tiny little balls so as to be safe. Safe?! From what?
Sophie Scholl


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 9:00 am 
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Renting And Proud! wrote:
Evil_g wrote:
temene wrote:
Tax relief for landlords on mortgage interest for residential properties to be raised by 5% each year for 5 years.


How're they spinning this one?


"It'll lower prices as landlords will be able to make the same after tax return for a lower rent"

This is of course is absolute nonsense - if the market can sustain X gross why the hell would any sane person not charge X

There has being plenty of comment on here about how we need "professional" landlords and how it should be run as a business. In any other business the full amount of interest is counted as a legitimate overhead. It seems rather absurd that in the landlording game that it's set to some other arbitrary percentage.

You could also argue that landlords now pay PRSI contributions on their full rental income. And that's before legitimate overheads are deducted (IIRC), I've yet to see any sort of reasonable explanation of how rental income is "Pay Related". There's no sense in that either, but again if the landlord is charging what "the market can sustain", this comes off their bottom line.

Two sides of the one coin.


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 7:21 pm 
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The full75% of the interest is already allowable by landlords who are actually professionals with a separate company. It's just that individual landlords want to be able to deduct the interest like a company, but not have to pay corporation tax like a company. Landlords want it both ways. If you want to be treated as a company, register a company.

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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 7:29 pm 
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Real Estate Developer

Joined: Nov 20, 2014
Posts: 994
Mantissa wrote:
The full interest is already allowable by landlords who are actually professionals with a separate company. It's just that individual landlords want to be able to deduct the interest like a company, but not have to pay corporation tax like a company. Landlords want it both ways. If you want to be treated as a company, register a company.


If only it was so easy and didn't incur further taxes and costs...


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 7:37 pm 
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Joined: Oct 6, 2011
Posts: 459
Quote:
€10k benefit for first time buyers


Any more info on this one? Will the 10k be for all first time buyers, whether single or joint applicants, whether purchasing new builds or second hand property?


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 7:43 pm 
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satechi wrote:
Mantissa wrote:
The full interest is already allowable by landlords who are actually professionals with a separate company. It's just that individual landlords want to be able to deduct the interest like a company, but not have to pay corporation tax like a company. Landlords want it both ways. If you want to be treated as a company, register a company.


If only it was so easy and didn't incur further taxes and costs...



It takes 5 minutes online. Yes it requires annual filings but that's the trade off for the advantages of being treated as a company.

The reality is it's much more advantageous not to be treated as a company.

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“If you're afraid - don't do it. If you're doing it - don't be afraid!” ― Genghis Khan

"Do, or do not; there is no try" -- Yoda


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 8:07 pm 
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Real Estate Developer

Joined: Nov 20, 2014
Posts: 994
Mantissa wrote:
satechi wrote:
Mantissa wrote:
The full interest is already allowable by landlords who are actually professionals with a separate company. It's just that individual landlords want to be able to deduct the interest like a company, but not have to pay corporation tax like a company. Landlords want it both ways. If you want to be treated as a company, register a company.


If only it was so easy and didn't incur further taxes and costs...



It takes 5 minutes online. Yes it requires annual filings but that's the trade off for the advantages of being treated as a company.

The reality is it's much more advantageous not to be treated as a company.


Hold your horses, I am not an accountant or tax expert but from top of my head (please anyone correct me if something is wrong), extra costs would be:

* Yearly accountant fees (1000-2000)
* You would have to pay solicitor fees, stamp duty etc again when "selling" to your company
* I am fairly sure VAT would have to be paid too (any experts around?)
* Corporation tax would be payable at 25% on rent received
* The company might have trouble raising loans for future purchases, since the property is no longer yours you might be impacted too
* There are longterm implications such as inheritance? capital gains? what if corporation taxation changes?

So once you do all that then you still have the problem of actually paying YOURSELF, any salary would of course include the usual wide range of taxes which you would be paying anyways if it was in your name

Maybe it could be worth it if the money is somehow funneled into a pension or something, but I really do not see how someone with 1 to dozen (or more?) properties would be at an advantage of moving the assets into a limited company. No matter how easy it is to actually register a Ltd company is.


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 8:32 pm 
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thatsthepoint.jpg

I see you've figured out that being treated as a company isn't as attractive as you originally though :-)

Now stop complaining about being treated as an individual rather than a company and thank fuck your only issue is that you can't deduct interest.

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“If you're afraid - don't do it. If you're doing it - don't be afraid!” ― Genghis Khan

"Do, or do not; there is no try" -- Yoda


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 9:26 pm 
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Posts: 994
Sorry massive migrane, brain fried anyways I don't have any loans to deduct interest from :D


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 9:29 pm 
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Joined: Dec 2, 2013
Posts: 2311
Mantissa wrote:
The full interest is already allowable by landlords who are actually professionals with a separate company. It's just that individual landlords want to be able to deduct the interest like a company, but not have to pay corporation tax like a company. Landlords want it both ways. If you want to be treated as a company, register a company.


I don't think you're right on this


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 9:40 pm 
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GameBlame wrote:
Mantissa wrote:
The full interest is already allowable by landlords who are actually professionals with a separate company. It's just that individual landlords want to be able to deduct the interest like a company, but not have to pay corporation tax like a company. Landlords want it both ways. If you want to be treated as a company, register a company.


I don't think you're right on this


It's actually 75% of the interest I believe, not all of it. Corrected above.

Maybe an accountant can weigh in to confirm?

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“If you're afraid - don't do it. If you're doing it - don't be afraid!” ― Genghis Khan

"Do, or do not; there is no try" -- Yoda


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 Post subject: Re: Budget 2017
PostPosted: Wed Sep 28, 2016 10:17 pm 
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Joined: Dec 2, 2013
Posts: 2311
Poc wrote:
Renting And Proud! wrote:
Evil_g wrote:
temene wrote:
Tax relief for landlords on mortgage interest for residential properties to be raised by 5% each year for 5 years.


How're they spinning this one?


"It'll lower prices as landlords will be able to make the same after tax return for a lower rent"

This is of course is absolute nonsense - if the market can sustain X gross why the hell would any sane person not charge X

There has being plenty of comment on here about how we need "professional" landlords and how it should be run as a business. In any other business the full amount of interest is counted as a legitimate overhead. It seems rather absurd that in the landlording game that it's set to some other arbitrary percentage.

You could also argue that landlords now pay PRSI contributions on their full rental income. And that's before legitimate overheads are deducted (IIRC), I've yet to see any sort of reasonable explanation of how rental income is "Pay Related". There's no sense in that either, but again if the landlord is charging what "the market can sustain", this comes off their bottom line.

Two sides of the one coin.


The 75% restriction applies to ordinary corporates as well as individuals. The gradual increase back to 100% over 5 years will put income tax and prsi on rental income on a par with any other leveraged investment and treat interest as a fully deductible expense. Also level with a what a normal corporate gets.

The real scandal is that Reits and others have such a tax benefit compared to individuals in how they are taxed on net income. It allows them to pay more for property in Ireland than an individual would - as the after tax yield for Joe soap and Joe soap Irl Ltd is so poor.


Last edited by GameBlame on Wed Sep 28, 2016 10:22 pm, edited 1 time in total.

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