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 Post subject: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Mon Aug 21, 2017 10:10 am 
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In the current edition of the construction industry magazine PassiveHousePlus there is an excellent article by Mel Reynolds outlining the deliberate policies that have been introduced by the Fine Gael government to encourage hoarding of land and ensure that only a paltry supply of new housing would be made available. Some of us here have been pointing these policies out for years but it is good to see that they are finally getting a more widespread airing.

I would urge everyone with an interest in the Irish and UK property sector to subscribe to this magazine.

Capital Gains Tax Exemption 2012.
Section 604A of the 2012 was brought in to encourage the sale of sites by NAMA at fire-sale prices and the hoarding of those sites for 7 years in order to avail of a zero rated Capital Gains Tax.
Only 8800 new units have been constructed since then.

Vacant Site Levy Tax 2016
Posponed until 2019, and when they are finally introduced they will be easy to minimise by structuring the funding appropriately. Ideally designed to allow land hoarders to benefit fully from the 2012 CGT exemption.

Capital Gains Exemption 2016
Section 739k of the 2016 Planning Act is a further five year CGT exemption to encourage the hoarding and non use of development land. The 5 year period starts from the date of purchase and is designed to prevent a glut of property from undermining values at the end of the 2012-2019 scheme. Revenue commented that this would act as a "lock on the residential market".

Planning and Development (Amendment) (No.2) Bill 2017
The 'don't use it, don't lose it' bill. It allows 10-12 year old planning permissions to be extended further with no pressure on the land owner or developer to actually build.

That's a rough summary of the article. Worth reading the original.

The only sector of society that benefit from these policies are land speculators and landlords. Tenants and young couples seeking to enter the market are being completely screwed, and because the policies are distorting the market to such a massive degree ultimately they are unsustainable and this bubble will burst.


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Mon Aug 21, 2017 12:02 pm 
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Good post

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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Mon Aug 21, 2017 12:25 pm 
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Do you have a link to the original article ?


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Mon Aug 21, 2017 2:08 pm 
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mr_anderson wrote:
Do you have a link to the original article ?
No, subscription only. Available in all good bookshops.


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Mon Aug 21, 2017 5:27 pm 
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Coles2 wrote:
mr_anderson wrote:
Do you have a link to the original article ?
No, subscription only. Available in all good bookshops.



I only frequent bad ones. :(


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Mon Aug 21, 2017 8:05 pm 
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Joined: Apr 9, 2014
Posts: 1907
Coles2 wrote:
In the current edition of the construction industry magazine PassiveHousePlus there is an excellent article by Mel Reynolds "........

Planning and Development (Amendment) (No.2) Bill 2017
The 'don't use it, don't lose it' bill. It allows 10-12 year old planning permissions to be extended further with no pressure on the land owner or developer to actually build.

That's a rough summary of the article. Worth reading the original.

The only sector of society that benefit from these policies are land speculators and landlords. Tenants and young couples seeking to enter the market are being completely screwed, and because the policies are distorting the market to such a massive degree ultimately they are unsustainable and this bubble will burst.


An article from an architect is no different than an article from an EA. They are both vested interests.

I have some direct experience with the planning laws having brought a number of development sites in the last few months. Planning permission lasts five years unless the previous owner applies for an extension which if granted will extend the planning for a further 5 years.

Re-applying for planning permission is no joke given the fees I am paying to architects.


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Mon Aug 21, 2017 9:22 pm 
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Joined: Dec 2, 2013
Posts: 2396
Luan wrote:
Coles2 wrote:
In the current edition of the construction industry magazine PassiveHousePlus there is an excellent article by Mel Reynolds "........

Planning and Development (Amendment) (No.2) Bill 2017
The 'don't use it, don't lose it' bill. It allows 10-12 year old planning permissions to be extended further with no pressure on the land owner or developer to actually build.

That's a rough summary of the article. Worth reading the original.

The only sector of society that benefit from these policies are land speculators and landlords. Tenants and young couples seeking to enter the market are being completely screwed, and because the policies are distorting the market to such a massive degree ultimately they are unsustainable and this bubble will burst.


An article from an architect is no different than an article from an EA. They are both vested interests.

I have some direct experience with the planning laws having brought a number of development sites in the last few months. Planning permission lasts five years unless the previous owner applies for an extension which if granted will extend the planning for a further 5 years.

Re-applying for planning permission is no joke given the fees I am paying to architects.


Jesus Christ
I saw this good post this morning and I thought to myself 'I bet that FG vested interest shill Luan is going to find something to post'. Do you never get embarrassed by yourself ?


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Mon Aug 21, 2017 9:28 pm 
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Joined: Dec 2, 2013
Posts: 2396
Coles2 wrote:
In the current edition of the construction industry magazine PassiveHousePlus there is an excellent article by Mel Reynolds outlining the deliberate policies that have been introduced by the Fine Gael government to encourage hoarding of land and ensure that only a paltry supply of new housing would be made available. Some of us here have been pointing these policies out for years but it is good to see that they are finally getting a more widespread airing.

I would urge everyone with an interest in the Irish and UK property sector to subscribe to this magazine.

Capital Gains Tax Exemption 2012.
Section 604A of the 2012 was brought in to encourage the sale of sites by NAMA at fire-sale prices and the hoarding of those sites for 7 years in order to avail of a zero rated Capital Gains Tax.
Only 8800 new units have been constructed since then.

Vacant Site Levy Tax 2016
Posponed until 2019, and when they are finally introduced they will be easy to minimise by structuring the funding appropriately. Ideally designed to allow land hoarders to benefit fully from the 2012 CGT exemption.

Capital Gains Exemption 2016
Section 739k of the 2016 Planning Act is a further five year CGT exemption to encourage the hoarding and non use of development land. The 5 year period starts from the date of purchase and is designed to prevent a glut of property from undermining values at the end of the 2012-2019 scheme. Revenue commented that this would act as a "lock on the residential market".

Planning and Development (Amendment) (No.2) Bill 2017
The 'don't use it, don't lose it' bill. It allows 10-12 year old planning permissions to be extended further with no pressure on the land owner or developer to actually build.

That's a rough summary of the article. Worth reading the original.

The only sector of society that benefit from these policies are land speculators and landlords. Tenants and young couples seeking to enter the market are being completely screwed, and because the policies are distorting the market to such a massive degree ultimately they are unsustainable and this bubble will burst.


+1 You could add to this the government driven Nama policy of selling in bulk to international property fund landlords and the governments own REIT legislation. Both of which encourage concentration of property ownership.


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Tue Aug 22, 2017 7:25 am 
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Joined: Sep 13, 2012
Posts: 4851
Surely REITs dilute property ownership? As an asset class they are popular with pension funds.

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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Tue Aug 22, 2017 11:51 am 
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Joined: Apr 9, 2014
Posts: 1907
GameBlame wrote:
Luan wrote:
Coles2 wrote:
In the current edition of the construction industry magazine PassiveHousePlus there is an excellent article by Mel Reynolds "........

Planning and Development (Amendment) (No.2) Bill 2017
The 'don't use it, don't lose it' bill. It allows 10-12 year old planning permissions to be extended further with no pressure on the land owner or developer to actually build.

That's a rough summary of the article. Worth reading the original.

The only sector of society that benefit from these policies are land speculators and landlords. Tenants and young couples seeking to enter the market are being completely screwed, and because the policies are distorting the market to such a massive degree ultimately they are unsustainable and this bubble will burst.


An article from an architect is no different than an article from an EA. They are both vested interests.

I have some direct experience with the planning laws having brought a number of development sites in the last few months. Planning permission lasts five years unless the previous owner applies for an extension which if granted will extend the planning for a further 5 years.

Re-applying for planning permission is no joke given the fees I am paying to architects.


Jesus Christ
I saw this good post this morning and I thought to myself 'I bet that FG vested interest shill Luan is going to find something to post'. Do you never get embarrassed by yourself ?

:roll:

Mel Renyolds is an architect - a profession that is one of the prime beneficiaries of an increase in building volumes. As such he is a vested interest.

For the avoidance of doubt, I have never voted for FG :) Also I am in no way embassed by my postings on the pin.


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Tue Aug 22, 2017 12:30 pm 
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First Time Buyer

Joined: Feb 25, 2008
Posts: 93
Luan wrote:
GameBlame wrote:
Luan wrote:
Coles2 wrote:
In the current edition of the construction industry magazine PassiveHousePlus there is an excellent article by Mel Reynolds "........

Planning and Development (Amendment) (No.2) Bill 2017
The 'don't use it, don't lose it' bill. It allows 10-12 year old planning permissions to be extended further with no pressure on the land owner or developer to actually build.

That's a rough summary of the article. Worth reading the original.

The only sector of society that benefit from these policies are land speculators and landlords. Tenants and young couples seeking to enter the market are being completely screwed, and because the policies are distorting the market to such a massive degree ultimately they are unsustainable and this bubble will burst.


An article from an architect is no different than an article from an EA. They are both vested interests.

I have some direct experience with the planning laws having brought a number of development sites in the last few months. Planning permission lasts five years unless the previous owner applies for an extension which if granted will extend the planning for a further 5 years.

Re-applying for planning permission is no joke given the fees I am paying to architects.


Jesus Christ
I saw this good post this morning and I thought to myself 'I bet that FG vested interest shill Luan is going to find something to post'. Do you never get embarrassed by yourself ?

:roll:

Mel Renyolds is an architect - a profession that is one of the prime beneficiaries of an increase in building volumes. As such he is a vested interest.

For the avoidance of doubt, I have never voted for FG :) Also I am in no way embassed by my postings on the pin.


You are trying to obfuscate and change the subject, that's what people do when they don't like the OP.

The facts in the post speak for themselves that at the same time as denouncing homelessness and houselessness in general, the govt has taken measures to further incentivise land hoarding.

If you can speak to this specifically and give evidence why it's not the case then please do so. If you will post irrelevant comments then please stop.


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Tue Aug 22, 2017 12:43 pm 
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Real Estate Developer

Joined: Dec 12, 2007
Posts: 888
Coles2 wrote:

Capital Gains Tax Exemption 2012.
Section 604A of the 2012 was brought in to encourage the sale of sites by NAMA at fire-sale prices and the hoarding of those sites for 7 years in order to avail of a zero rated Capital Gains Tax.
Only 8800 new units have been constructed since then.

I'm guessing this isn't what the article says. The writer seems to make reasonable arguments otherwise so wouldn't have implied that NAMA was encouraged to sell at fire-sale prices. I'll take a stab that the original would be along the lines of "Section 604A of the 2012 was brought in to encourage the purchase of sites at fire-sale prices".

Do some people actually believe that NAMA was set up to fire-sale assets? As in the exact opposite of what it was designed to do? Any chance the original poster could post the sentence used?

Also selling property assets at below 2007 prices is not neccesarily a fire-sale.


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Tue Aug 22, 2017 1:22 pm 
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Joined: Dec 2, 2013
Posts: 2396
sorehead wrote:
Coles2 wrote:

Capital Gains Tax Exemption 2012.
Section 604A of the 2012 was brought in to encourage the sale of sites by NAMA at fire-sale prices and the hoarding of those sites for 7 years in order to avail of a zero rated Capital Gains Tax.
Only 8800 new units have been constructed since then.

I'm guessing this isn't what the article says. The writer seems to make reasonable arguments otherwise so wouldn't have implied that NAMA was encouraged to sell at fire-sale prices. I'll take a stab that the original would be along the lines of "Section 604A of the 2012 was brought in to encourage the purchase of sites at fire-sale prices".

Do some people actually believe that NAMA was set up to fire-sale assets? As in the exact opposite of what it was designed to do? Any chance the original poster could post the sentence used?

Also selling property assets at below 2007 prices is not neccesarily a fire-sale.


^ this is semantics really. The CGT exemption encouraged "transactions" during a fixed period by incentivising hoarding by new purchasers. So good for purchasers good for sellers who wanted out quick.

And which sellers wanted out quick ? Nama policy change due to FG and Troika. What Nama was "designed to do" is as irrelevant now as say the Green party's reasons for going into government in 2007. What they actually were told to do matters. Brian Lenihan's treacherous dissembling about what Nama would do when up and running is just a footnote in history, used to get it over the line in the Dáil


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Tue Aug 22, 2017 7:01 pm 
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Joined: Jan 4, 2012
Posts: 573
Government acting in a way such as to provide large benefits to a few with the cost widely dispersed across the population should surprise no-one. This is the likely consequence when government controlled entities such as NAMA are created to intervene in the housing market and overall economy. This tends to happen with or without any long term strategy on the part of the ruling party but simply due to the massive rewards possible from government lobbying.

Below is a quote that illustrates the "concentrated benefits and diffuse costs" concept.

Quote:
One of the key concepts of Public Choice is concentrated benefits and diffuse costs. That means that the benefits of any government program are concentrated on a few people, while the costs are diffused among many people. Take ADM’s ethanol subsidy, for instance. If ADM makes $200 million a year from it, it costs each American about a dollar. Did you know about it? Probably not. Now that you do, are you going to write your congressman and complain? Probably not. Are you going to fly to Washington, take your senator out to dinner, give him a thousand-dollar contribution, and ask him not to vote for the ethanol subsidy? Of course not. But you can bet that ADM’s corporate officers are doing all that and more. Think about it: How much would you spend to get a $200 million subsidy from the federal government? About $199 million if you had to, I’ll bet. So who will members of Congress listen to? The average Americans who don’t know that they’re paying a dollar each for ADM’s profits? Or ADM, which is making a list and checking it twice to see who’s voting for their subsidy?


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 Post subject: Re: 'Help to Hoard' - How Government made the Housing Crisis
PostPosted: Wed Aug 23, 2017 10:59 am 
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Joined: May 26, 2008
Posts: 29
ok I have to take issue with some of this,

In particular the Capital Gains Tax Exemption 2012 was introduced to encourage people to buy Irish property so if this wasnt introduced then we would have even more oversea purchases and a bigger property crash. We can't undoo this this but we could introduce taxation to re-balance.

Certainly not affording occupiers have first refusal on any name sale is unforgivable given our history of the land league. NAMA was needed but poorly run.

We also need to stop the blame of the past mistakes and push for policies that deliver for individuals. A proper property tax is required, one that favours owner occupiers firstly foremost and secondly those that introduce deliver new builds or social housing.

owner occupation is the best way to share wealth and stop the state having to pay the rents for citizens.


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