FG Stamp Duty Reform - Election Promises #2

[zakalwe]

heard on newstalk earlier at lunch that today FG are releasing their Stamp Duty plan if elected.

anyone any details.

should i hold off buying until the election or the budget following the election?

[Johnny]

heard on newstalk earlier at lunch that today FG are releasing their Stamp Duty plan if elected.

anyone any details.

should i hold off buying until the election or the budget following the election?

RTE News are reporting that FG are holding a press conference at 145 to launch the policy.

[rockofcashel]

heard on newstalk earlier at lunch that today FG are releasing their Stamp Duty plan if elected.

anyone any details.

should i hold off buying until the election or the budget following the election?

I'd hold off for another 12-18 months, but it's nothing to do with FG's proposal

As other threads have discussed, the property market is on the slide, and many specuvestors are desperately offloading at the moment. You'll save more in any capital fall than you will on saving stamp duty.

I'd have to say for FG, this is typical of closing the door after the horse has well and truly bolted. They wait until the rate of house sales has slowed to its lowest level in a decade before they wake up to the issue.

[Sidewinder]

This Stamp Duty nonsense really does my head in. The bursting housing bubble has got f*** all to do with Stamp Duty. That's just the convenient scapegoat everyone is wheeling out to avoid facing the truth.

We, collectively, got completely carried away in a massive speculative frenzy fuelled by ultra-cheap credit, rampant greed, dodgy builders, criminally irresponsible financial regulators, and everyone buying into a groupthink myth that we were all entitled to make loadsamoney by not doing anything productive, just selling our houses to one another at ever-increasing prices.

We turned our economy into a gigantic pyramid scheme. Which is currently collapsing. We drove house prices to levels only rivalled in all of human history by the great Japanese frenzy of the late 80s. Prices are totally out of line with any rational valuation measurement. And with ultra-cheap credit drying up and credit standards tightening, well...

FTBs got rationally priced out a couple of years ago, though the Irish obsession with property kept the party going. For years it has been impossible for young couples to buy a house. They resorted to gifts from parents, credit cards, credit union loans, lied about their income to get 100% 40-year mortgages. So widespread was the mania that people started seeing this as normal, when it is, in fact, lunacy. 40% of all houses were being bought by speculators - who have been massively subsidising their tenants every month in the touching belief that 20% capital gains will go on every year forever. These investors are now dumping their properties as the promise of capital gains comes to an end (the "soft landing" ), hence the massive increase in inventory and corresponding reduction in rental supply and therefore hike in rents.

Stamp Duty is an excuse, to avoid having to face the ugly truth. The market stalled about 3 months before McDowell ever opened his mouth. Why? Because after every trick had been pulled, every loophole exploited, every last red cent squeezed out of FTBs in every way possible - house prices had simply risen way out of reach. Even with both sets of parents and the credit union giving a dig out. And without FTBs, the pyramid collapses.

Oh, and the small matter of us being wildly oversupplied with housing units.

[rockofcashel]

can i get you to write some "economics for dummies" debating cards for me Sidewinder, or at least permission to use some of your arguments.

You put the arguement very succintly

[Sidewinder]

Feel free, RoC. Getting the truth out is far more important than my ego

I think you'll find though that most people don't want to face the truth.... and after the dust settles will we get any credit for having been right all along? Not a bit of it, we'll still be "cranks" and "subversives". It gets easier once you accept that this is the Way Of Things.

*meditates on the ineffable*

[zakalwe]

sidewinder,

you're absolutley right.

i bought a house i could barely afford 2 years ago. i sold it a few months ago and am currently renting while having the proceeds sitting on deposit earning 4%. i know i could get a better return but need to keep it liquid in case i spot something interesting and have to move quickly. anyone any good ideas of what to do with the stash (and some nag in the 2.30 in cheltenham is not going to tempt me!)?

my bro rang me up about a 4 bed semi in foxrock that "looks good" at 800k. i mean, wtf, 4/5ths of a feckin million for an nondescript house in a good area!

i saw an apt that was originally quoting 660, then 610 (had sale agreed but the sale fell through) now 595 and was told they'll take 580. 80k fall in the asking isn't boosting confidence about it as a good buy!

having said that, any stamp duty tax reform would be most grateful as stamp is dead money and i've already paid 35k in stamp before so i feel that i've contributed enough.

[aodh_rua]

Without getting into the macroeconomic effects of tinkering with the market, surely a marginal rate of stamp duty is a fair change to make. From the media reports this is part of the FG policy, and I think it is one that is needed. We don't levy any other taxes afaik, where going 1c over changes the tax liability on the whole sum.

[qtman]

Without getting into the macroeconomic effects of tinkering with the market, surely a marginal rate of stamp duty is a fair change to make. From the media reports this is part of the FG policy, and I think it is one that is needed. We don't levy any other taxes afaik, where going 1c over changes the tax liability on the whole sum.

The Marginal Rate is a good idea in the sense that it removes much of the significance of the Stamp Duty from the transaction. For instance, if you have a FTB and a STB bidding for the same house, the Stamp Duty increment point is a big deal.

FG are selling this as a means to make housing cheaper, which it is not. It is economically impossible to make housing cheaper by reducing the taxation associated with housing.

If anything, a cut in Stamp Duty could making housing more expensive, in that it introduces greater levels of demand and price expectation into the market.

[hiding behind a poster]

I'd have to say for FG, this is typical of closing the door after the horse has well and truly bolted. They wait until the rate of house sales has slowed to its lowest level in a decade before they wake up to the issue.

Incorrect, Rock. FG announced the broad thrust of this policy in early 2004 - when house prices were still rocketing along.


(By the way, what parts of the policy do you disagree with, if any, and why?)