Has the Minister done enough to entice you to buy?

Has the Minister done enough to entice you to buy?

Has the minister done enough to entice you to buy?The news that the Mortgage Interest Relief scheme is to be extended for qualifying loans until 2017 is good for both existing home owners whose relief is due to expire and for new purchasers who will still be able to obtain mortgage interest relief for qualifying loans. The real benefit of this extension will be seen … as and when interest rates start to climb late next year as the relief will climb in line with higher mortgage repayments thus cushioning some of the impact of higher rates.

However this continuation of the relief scheme is unlikely to be enough to encourage first time buyers to purchase in the coming years. In addition buyers might put buying intensions on hold due to the minister reaffirmed a commitment to introducing a property tax at a future point in time but did not specify when that would be. With the property tax potential buyers could be reluctant to purchase and pay stamp duty now given that stamp duty will likely be eradicated or substantially reduced upon introduction of the tax.

Have your say

  • Would buyers remain reluctant to purchase and pay stamp duty now given that stamp duty will likely be eradicated or reduced as a property tax is introduced?
  • Or would the continuation of the relief scheme be enough to encourage first time buyers to purchase?
There are 19 comments for this article
  1. Rboland at 1:48 pm

    There was a line in the government’s 2009 taxation report that stated (I’m paraphrasing here) that it would be unfair to charge a person with a 1200 sqFt house the same property tax as someone with a 1200 sqFt house in a “more affluent area”. No rationale is given for this… I interpret this as yet another attack on people in the parts of Dublin where we don’t graffiti our own neighborhoods. Why hasn’t the estate agent’s lobby made something out of this? Why should people in Dublin Southeast continue to be taxed to the hilt while there’s effectively zero residential stamp duty outside “the pale” in places like Mayo where you get paid the same salaries but your home costs a fraction of what it does for us?

  2. tom at 7:28 am

    WOW i live in los angeles area and the population is approx 18 million and houses here are half what irish property is and as an ex pat ireland needs to wake up. Dublin is a periferial town on the out skirts of europe with huge unemployment and high taxes and the audacity to think homes in dublin are worth more than 100k euros is the irish living in the usual drunken hase it sure makes me laugh next leprechuans are real lol.

  3. Robert Browne at 4:47 am

    In a country that has around 1000 quango’s, (nobody knows how many) is shedding jobs every single month,has taken upon itself one of the biggest tracker mortgages in history (nama 54bn) and which is hanging onto its national sovereignty by a thread. NO! It most is certainly is not a good time to buy a house. The bankers, developers but most of all politicians, have driven the economy over the edge of a cliff. Anyone thinking of buying should wait for the car booth sales of houses that will come about as a result of no jobs, no credit and overabundance of supply. Developers have not even got the money to take down the cranes they are not using! According to one well know economist houses will end up costing around 120,000 Euro at the end of this contraction which we will not come out of until we create jobs and start exporting goods and services again.

  4. paddy at 12:22 am

    I’m soo feed up with all the doom and gloom thats been said above.
    I’ve been watching the market for the past few years and reckon now is as not a bad time to buy (it may not be the very best time to buy).
    I’ve just bought my very first house and will recieve the keys tomorrow morning and cant wait.
    Have I just commited financial suscide? do I care?
    I’m happy that i’ve bought in falling market, will it fall further?
    NOBODY KNOWS but at least I know that i did not buy at the height of the property bubble when I was very tempted to do so.

  5. Rick Whittington-Keane O’Roy at 8:58 pm

    A Banana republic awash with corrupt politicians can only recover with desparate measures. Go to the IMF with cap in hand or you are doomed. Political infighting within FF does not help.

  6. JPL at 3:56 pm

    The move by the Minister will assist existing first time buyers who have bought at the top of the market and are currently in serious negative equity.It will not, in my view ,encourage people to purchase new homes given the value and choice available in the rental market, the fact that the price of houses have not stopped dropping,the certainty of interest rate rises early in the New Year, when NAMA is fully in place and inflation raises its ugly head again.I believe that these will further weaken the property market for the foreseeable future.

  7. Eugene McLoughlin at 3:16 pm

    There’s too many “if, ands, or, buts” for any prospective first time buyer which I am.
    1) the economy is still in a recession but because of the budget could head for a depression with even less money in peoples pockets further driving down house prices (if you can get credit)
    2) Too many tax questions remain un answered in terms of stamp duty and propert tax.
    3) There’s an over supply of houses (esp ghost estates) but there could be more over supply in “better” areas if people start emigrating to the likes of Canada or Australia.
    4) Specualtion now rife whether AIB and BOI might have to be nationalised and whether NAMA will actually get fuly of the ground.

  8. Phyllis at 3:09 pm

    The only chance there would be of first-time buyers getting on to the property snakes and ladders would be to buy a new home and the only new homes on the market are in ghost town empty unfinished estates, where you would be the only inhabitant.

  9. D. Murray at 1:34 pm

    No. Market still has a long way to drop.

  10. Paul at 1:17 pm

    I certainly would not purchase for the following reasons;
    -Stamp Duty still payable even though it almost certainly be abolished in the near future. There was talk that the property tax will offset this but in the absence of facts/figures it is potentially risky
    -Water Rates will be introduced as indicated by the minister but no details as to how much and at what level.
    -Residential property rax is coming and again it is unclear as to how much this will cost each person/property
    -Banks-lending is tight and interest rates are certainly going up, both base rates and bank margin
    -After Tax income is diminishing before everyones eyes and this in conjuntion will all of the above uncertainty of future property utilities costs leave it impoossible to clearly assess the cost of a property
    -Compare property prices in Ireland to any other EU counrty and you will see that even at todays level they are way too expensive. There is allot further to go in terms of falling prices
    -Government Deficit – Despite what the budget did this week, it only scratches the surface of what needs to be done. This country is bankrupt, and the sooner the unions reaslise that, the better. It will take a miracle to sort this mess out, and the unions are all too short sighted to see the bigger picture.

    Would you buy property in Ireland when you consider all of the above?

  11. Naomi at 1:07 pm

    I haven’t figured out whether I would qualify for the interest relief if I am not a first time buyer, but still only in year 5 of my existing mortgage. If I move house and get a new mortgage will I qualify for tax relief up to the year 2017 ?

  12. Donal at 12:50 pm

    Personally I will not buy until August 2011 now.

    The Mortgage Interest Relief for new First time buyers expires in July 2011.
    This means that house prices will plummet massively, past that date.

    Market prices are now at 2003 levels, and given the recent budget, they are going to fall even more dramatically in 2010.

    It has never been so cheap to rent, and I will continue to save and add money to my deposit, when house prices continue to collapse.

    Anyone who buys a house in 2010, seriously does not understand the first thing about the property market or economics.


  13. Raymond at 12:46 pm

    Good news about the extension of the mortgage interest relief for existing qualifying mortgage holders. New property tsx to be introduce is still a concern for existing property owners though!.

    As for new prospective first time buyer entrants I am not so sure the government policy will encourage new buyers to join the property ladder as such. Although I suspect there will be some business activity at the lower end of the property market for those who can afford it and secure a mortgage.

    The problem is going to be in middle and top end of the property market which I feel will remain stagnant for a good while namely because the stamp duty threshold and forthcoming Property Tax, for these category of properties plus Water Rates too !!!!!

  14. marc at 12:33 pm

    the sniff of a property tax is incredibly damaging to the property market and will continue to be so.

    these taxes should be introduced when times are good and not when the patient is on life support.

    It is irresponsible to pay lip service to this concept untill this rebound in 4-5 years.


  15. lynne Kavanagh at 12:29 pm

    I think people have the money , but are afraid to buy because of negative equity and the banks aren’t exactly handing out mortgages are they?… It’s rich really as we’re the ones who have bailed them out – that’s old news…

    But I would love to move in the future but I think the property prices were far to high to begin with …

  16. Daniel Duggan at 12:28 pm

    House asking prices are still crazy; €650k is a typical asking price for a 95M2 1950’s 3-bed semi-D in South Dublin. You would have to be brain-dead to buy at this price when the same small house can be rented for €16k per year. The tax break on a mortgage is Mickey Mouse money, far better to take the almost 50% tax break available when investing (depending on your age) up to 40% of your income in your pension and up to 8% in an ESOP. These actions take up to 48% of your income out of the tax and PRSI net, it’s the way to go!

  17. D regan at 12:18 pm

    With Proeprty tax on the way, I think there is going to be serious down ward pressure on properties with large plots especially in Dublin, where the site value will be used to calculate the tax.
    It would make more sense to have tax based on floor area, and area. That means a house of a few thousand sq ft in a rural area would pay fairer contribution, because the site would be worth a lot less that a city location. So if tax based on site value, city dwellers in modest home, will pay more tax than person in huge home in rural area.
    The tax must be equitable, but with current confusion, property is not a good purchasing decision.

  18. Jenny at 12:11 pm

    No. He has not done enough he has infact made it impossible. I work in the public sector earning €30K a year. He has cut the wages and I now cannot get a mortgage. There goes my dream of buying a house next year.

  19. Peter Byrne at 12:09 pm

    I am currently stuck paying a very large mortgage, on a fixed rate for another 12 months at a rate of 5.25% – so I am hoping interest rates don’t climb too high as I am not seeing any benefit from the lower mortgage rates.
    So, I am not enticed to buy as I would loose on negative equity – so i am stuck.

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