New home buyers to claim VAT back on their income tax from 2017

D

Deleted member 34656

Very confusing thread.

This is an extension / renovation grant which will make old stock more attractive. It's for new buyers, not new houses.

Will only work for houses with enough garden for an extension and that can get planning permission.

Seems unfair on people who bought a starter home at huge money and now have three kids. They can't sell and move and they don't get a vat rebate if they extend.

Hmmm.
 


Voluntary

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Very confusing thread.

This is an extension / renovation grant which will make old stock more attractive. It's for new buyers, not new houses.

Will only work for houses with enough garden for an extension and that can get planning permission.

Seems unfair on people who bought a starter home at huge money and now have three kids. They can't sell and move and they don't get a vat rebate if they extend.

Hmmm.
The renovation grant was only mentioned as a comparison. This is about new housing. It's also not about new buyers, but about new buyers of new housing as this relates to VAT return. I understand you can only return VAT on VAT paid after the new legislation comes into effect, there's no VAT being paid on second hand houses (as this was already paid, and who knows how much now).

Regarding fairness - well, no financial incentive, social welfare etc etc is fair. Government targets most vulnerable groups in the society and sets it's other goals, all the taxation is about taking from one people and giving to another in one way or another.
 
D

Deleted member 34656

The renovation grant was only mentioned as a comparison. This is about new housing. It's also not about new buyers, but about new buyers of new housing as this relates to VAT return. I understand you can only return VAT on VAT paid after the new legislation comes into effect, there's no VAT being paid on second hand houses (as this was already paid, and who knows how much now).

Regarding fairness - well, no financial incentive, social welfare etc etc is fair. Government targets most vulnerable groups in the society and sets it's other goals, all the taxation is about taking from one people and giving to another in one way or another.
The vat on renovations will be refunded to existing homeowners petunia they might extend it to buyers as well.
 

theObserver@hotmail.com

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I didn't give this much thinking but I must admit this is an interesting idea.

Tax break for new house buyers mooted by Michael Noonan



Taking a 300k new home as an example, 13,5% VAT equals over €40,000. If no upper limit is applied to the amounts to be claimed back, tax paying house buyers would get quite large financial relief.
In this particular example a family on 60-80k income would probably live tax free for 2 years after buying a new house.

Noonan may be right on giving tax breaks to buyers instead of giving them to developers.
This would also mean the VAT back would go to Irish taxpayers and not offshore investment funds who don't pay income tax here.

What do you think?
What I think is the current lending rules will be eventually relaxed and the celtic tiger era panic buying will resume. Consider that rent is actually higher now than during the boom and the number of available rental properties is lower. The only thing holding property prices to a half reasonable level is the difficulty most people have in getting loans and once those rules are relaxed ....

I also think we much higher apartment blocks in the city center more than new houses.
 

Voluntary

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The vat on renovations will be refunded to existing homeowners petunia they might extend it to buyers as well.
Renovation grant is only on new renovations, not old ones. Similarly new house grant will be on new housing. Wherever VAT is applicable. House buyer cant claim vat back on what the previous owner paid (eg renovated a house)
 
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Voluntary

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What I think is the current lending rules will be eventually relaxed and the celtic tiger era panic buying will resume. Consider that rent is actually higher now than during the boom and the number of available rental properties is lower. The only thing holding property prices to a half reasonable level is the difficulty most people have in getting loans and once those rules are relaxed ....

I also think we much higher apartment blocks in the city center more than new houses.
We can only comment on real plans and the current state. Wishes washes are just wishes washes. Wouldn't put any money on someone feelings or predictions. The current state is: Mortgage limits are in place.
 
D

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Renovation grant is only on new renovations, not old ones. Similarly new house grant will be on new housing. Wherever VAT is applicable.
Yes. The idea is to allow people in negative equity to make their existing house bigger or better instead of moving which they can't do.

The new buyers option would encourage people to buy small houses and embiggen them, or old houses and embetter them.

I don't see any benefit to developers. Should help smaller contractors though. And families. And old houses.
 

mr_anderson

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No, as future taxes/incomes cannot be guaranteed, also the 3.5 limit is on gross, so no taxes/tax breaks are taken into consideration.

So this is another argument in favor of giving tax breaks to home buyers instead of developers. Reduced VAT on new builds at source would automatically be included in the Loan To Income calculations.
3.5 x income mortgage.
Plus an additional loan that gets paid off with each refund.
 
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This has nothing to do with putting money in people's pockets this is targeting the Building Industry who do jobs without VAT.

Rachel and Steve (annoying F**kers over the fence) get a renovation done by Steve's uncles cousins friend who doesn't charge VAT on the quiet.
Everybody is happy apart from neighbour who wishes that a meteorite would land.

Now annoying F***S can reclaim VAT from Govt but suprise suprise Builder hasn't done any VAT work in latest return to Revenue.

FFS took 10 seconds to figure he targeting the black economy rather than having any interest in renovators.
 

stopdoingstuff

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yeah, let's solve a supply problem by increasing demand. retards.
 

mr_anderson

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It's been calculated that 83k on each 230k new build goes back to Exchequer in levies and taxes. This is over 30% of each new build costs.

What people miss is that purchasers borrow to fund this €83,000.

€83,000 @ 4.5% over 25 years is €139,936 (hope my calc is correct)

So you end up paying €139,936 over the term of the mortgage (25 years in this example) just for the tax element of your house.
 

hammer

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Yeah right. That €83000 includes Paye/PRSI paid by developers on workers salary.

Should they stop handing it over ?
 
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Yeah right. That €83000 includes Paye/PRSI paid by developers on workers salary.

Should they stop handing it over ?
Not just developers.

VAT on fuel needed to move items onto site.

Paye / PRSI for the guys who make the bricks, store them deliver them and everybody else that is involved in the clearing of site and construction on a house.

People demand to know why people are allowed make a profit from construction of a house forgetting that factory making bricks and every bit along the line makes a profit and pay people.

Course people could make their own bricks and do it all themselves...
 

stopdoingstuff

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either go mad free market and allow high rise or go mad interventionist and build subsidized housing. all this fannying about solves nout. the actual problem is that no land owner or vulture fund benefits from falling prices, but screw them.
 

GJG

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Volumes sold would increase as more people would get interests in buying houses (tax back), however prices would probably not increase that much as are limited by the Central Bank income limits.
This proposal is terribly stupid. Not a single extra home will be sold unless more homes are built. The bottleneck is caused by land hoarding. Hoarding land is basically free, and enormously profitable. Free because there are no taxes on unused land, and even its capital value can be leveraged to invest elsewhere. Allowing out more than a trickle of supply would collapse the value of their hoard, so the hoarders will never do it unless a cost is attached to restricting supply.

No, as future taxes/incomes cannot be guaranteed, also the 3.5 limit is on gross, so no taxes/tax breaks are taken into consideration.

So this is another argument in favor of giving tax breaks to home buyers instead of developers. Reduced VAT on new builds at source would automatically be included in the Loan To Income calculations.
A tax break for home buyers is a tax break for developers. Using taxpayers' money to bid up the price of the houses is only a slightly more roundabout way of putting taxpayers' money into developers' pockets, further rewarding and encouraging them to constrict supply.

With the Central Bank income to loan enforced limits I don't really see a potential for large house prices increases.
With such limits in place, long term house prices may only increase in line with incomes.
You can no more explain away the laws of economics than a promoter of a perpetual-motion machine can explain away the laws of physics. If you have more money chasing a fixed supply of housing, then you increase the prices by exactly that amount of money. All that is changed is that the taxpayer is poorer and the developer is richer.

They still have to comply with the CB regs.

Answer this very simple question and the light will dawn: is the quantum of Irish mortgage debt (a) increasing or (b) decreasing?

Once you know the answer (hint: it's a consonant), then you'll know why your fears of a new credit bubble are baseless.
CB regulations only govern the supply of the mortgage, other funding sources have an equal capacity to inflate prices in a fixed-supply market.

Ireland has insanely high housing prices, and insanely high debt levels which are a drag on our economy. Just because we are not at the peak of a debt bubble right now doesn't justify such an insane scheme.

What people miss is that purchasers borrow to fund this €83,000.

€83,000 @ 4.5% over 25 years is €139,936 (hope my calc is correct)

So you end up paying €139,936 over the term of the mortgage (25 years in this example) just for the tax element of your house.
This is the same fallacious argument used by the motor industry, expecting every cent of tax they pay to go towards road-building. Builders, their employees, and their suppliers, like motorists, all live in the same society as the rest of us. They are effectively demanding that the rest of us pay for educating their children, policing their society and treating them when they are sick.

Almost anything you buy includes a high proportion of tax; where that tax is lower than standard, that is a subsidy. What justifies the taxpayer subsidising an already wealthy and profitable industry, when it will benefit the buyers not one whit?

There's thousands of hectares of farm land in and around Dublin which could be acquired cheap via compulsory purchases for strategic purposes and transferred into a development land.
Implement this and current land hoarders will be rushing to build on their land as with plenty of development land coming into the market they'd be afraid of loosing the value long term. It's a simple supply / demand issue. The land is only so expensive as there's a lack of it (while in the reality there's a lot of it, but artificially restricted)
Bullseye.
 

hammer

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"A tax break for home buyers is a tax break for developers. Using taxpayers' money to bid up the price of the houses is only a slightly more roundabout way of putting taxpayers' money into developers' pockets, further rewarding and encouraging them to constrict supply"

+ 32,000,000,000
 

RodShaft

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He hasn't fixed the last boom, and he wants to start another one...
 


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