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Taxing Property

by Frank Schnittger Wed Oct 27th, 2021 at 10:49:54 AM EST

Tax on vacant properties could solve housing crisis

The news that Ireland has the 10th highest housing vacancy rate in the world makes for depressing reading. The 183,000 vacant homes (excluding holiday homes) could solve our homelessness problem 30 times over and dramatically reduce the price of houses on the open market for those who cannot currently afford to buy them.


Many of these vacant properties are owned by global property and hedge funds who seek to bid up rental and purchase prices by constricting supply. At least a third are owned by older people who can no longer live in them and who need to be incentivised to make them available on the open market.

The Government claims it needs more information on why these houses are vacant before it can introduce a vacant property tax.

This is a shallow excuse to continue to favour vacant and often absentee property owners over those who need homes to live in now. It's like saying they need more information on why people work before it can introduce an income tax.

If a vacant property tax brought even half these 183,000 properties to market, it could reduce house prices and solve our housing crisis almost overnight. It's time the Government showed some urgency on this issue and incentivised these homeowners to make their properties available to those who need them most.

It's not too late to include a vacant property tax in the Finance Bill for next year. If the Government fails to do so, it must be replaced by one that will. Our young people can wait no longer.


Taxing property is one of the great no nos in Irish politics. Income taxes are quite high and very progressive but any suggestion that wealth or property should be taxed is sure to raise of chorus of objections even from supposedly left wing parties like Sinn Fein.

The problem is, perhaps, that Ireland has a relatively high rate of home ownership (69%) compared to the European average which means there are always more votes in reducing property taxes than there are in increasing them. Fianna Fail won a landslide victory in 1977 on the promise of eliminating household rates, and a replacement Local Property Tax was only belated introduced in 2013.

Much of the surge in support for left wing parties at the last general election in 2019 was based on their opposition to the introduction of water charges levied on a per household consumption basis even though a number of exemptions for low income and low consumption households were proposed. As a result wealth in general, and property in particular, remains large untaxed in Ireland.

As well has increasing the dependence on income and corporate taxes in Ireland, this has helped to create an asset price boom which is pricing many younger people out of the property market. Rents are booming and foreign venture and property funds are buying up entire newly built housing estates to place on the rental market, further increasing the difficulty of saving for a deposit while paying high rents.

But as usual, there are blind spots in Government policy, and one of these is the very high number of unused vacant properties which could provide a home to homeless families or those who currently can't afford to buy one.

While the government has belatedly introduced a Zoned Land Tax in this year's budget on land that is zoned for housing but undeveloped, this will take some time to reduce building land prices, curb windfall cash gains for landowners whose land is re-zoned, and encourage the building of more affordable new housing. However, even with these measures, demand is predicted to continue to outstrip supply, leading to ever higher house prices.

But the solution is hiding in plain sight. Incentivise the owners of currently vacant houses to bring them to the rental and purchase markets thereby dramatically increasing supply and reducing rents and purchase prices to much more affordable levels. Doubling the current Local Property tax rates on vacant houses could suffice. Hence my letter to the paper (above) published by the Irish Independent as their lead and most read letter today.

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Excellent ... both are important topics: housing and homelessness. Western Europe on average is doing a poor job as with many social issues. Finland has set a policy to ban homelessness, well done.
by Oui on Wed Oct 27th, 2021 at 11:59:17 AM EST

2022 Tax Plan: a better tax system

Many more tax proposals are coming soon ...

by Oui on Wed Oct 27th, 2021 at 12:07:34 PM EST
The result of negative real interest rates. Blame the central bankers.
by StillInTheWilderness on Wed Oct 27th, 2021 at 02:12:01 PM EST
[ Parent ]
More complicated. Same as in Ireland institutional investors from foreign nations (China included) buyers of property. Dutch proposals aim to tax personal assets and a capital gain tax. Is a double taxation as my house bought in 1973, gone through decades of inflation, just about free from mortgage, will be taxed due to "overvalue"? The state always wins. If the elderly didn't die from Corona last year under code black policy, we'll tax them into the grave?
by Oui on Wed Oct 27th, 2021 at 02:24:41 PM EST
[ Parent ]
My comment referred to the skyward rise in home values, not the tax situation.  Same here. A house two doors away appraised at $320,000 last year, sold last month for $405,000 in five days. $5,000 ABOVE the asking price. I'm expecting a whopper of a tax bill next year.
by StillInTheWilderness on Sat Oct 30th, 2021 at 02:33:49 AM EST
[ Parent ]
Meanwhile, the cost of municipal services has not increased nearly as fast. You can make more now as a clerk at Costco than as a high school teacher with a masters degree.
by asdf on Sat Oct 30th, 2021 at 05:53:34 PM EST
[ Parent ]
I can well believe that.  In 2005, I was an unemployed software engineer.  A cousin in the education business (Catholic School Principal) put me in contact with people in my own public school district. I told them (truthfully) that I could teach any High school Math or Physics class, they were excited. When I offered to teach an enrichment class on general computer programming, or the C Programming Language or 8086 Assembly Language they were enraptured. They offered me $17,000 a year providing that I sign up for classes in General Education classes. That was one fifth of my former salary, not even enough to pay my mortgage on what i assure you is not a mansion (1990 tract house).

Then I was called for jury duty in Chicago. The daily stipend paid the train fare and we were fed (breakfast and lunch, both plentiful and tasty). One of the jurors was a young lady, a new teacher. I told her of the ridiculous $17K offer and she looked at me funny. The next morning I overheard an older lady talking to her. "Did that job come through, dear? How much was it? Thirteen thousand?"   We keep reading about Republicans railing about teachers making $160K but beginning wages are less than minimum wage. Ridiculous!

by StillInTheWilderness on Sun Oct 31st, 2021 at 02:24:28 PM EST
[ Parent ]
Negative real interest rates, if passed on to the consumer, make expensive houses more affordable, and are not in and of themselves the problem. The commodification of housing, which sees it as an asset class for investment rather than a home for homeless families results in a shortage of houses available for real families to live in, especially low income families.

Taxing houses owned by corporations and large scale landlords, plus vacant houses not used for anything other than as a store for assets, would release a lot of these houses into the market and solve the short and medium term supply and pricing problem for medium, low income and homeless families. Existing policies seek to incentivise building, but that is only a long term solution.

We should prioritise the utilisation of assets we already have, and stop the financialisation of what should be a human right.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Oct 27th, 2021 at 04:33:19 PM EST
[ Parent ]
The economic consequences of low interest rates | ECB - Oct. 2013 |

The key ECB policy rates are at a historical low. After being cut to 1% in May 2009, the interest rate on the main refinancing operation (MRO) has remained at low levels over the past four years. It currently stands at 50 basis points.

The main reason for maintaining highly accommodative monetary conditions has been to avert the risk of an economic depression and to counter deflationary pressures. At the same time, given the financial disruptions which led to what is now widely called "the Great Recession", the reduction of interest rates has helped to offset the excessive increase in borrowing costs caused by the widening of financial spreads. From this perspective, monetary policy actions have favoured borrowers.

How Europeans' household net worth is 'now exclusively driven' by negative interest rates | Business Insider - May 2019 |

Low interest rates makes saving up for retirement more expensive | policy Dutch Central Bank |

by Oui on Wed Oct 27th, 2021 at 06:16:16 PM EST
[ Parent ]
A high property tax on more than two homes owned by any single person or corporation would quickly remedy the situation. Might be easier to implement than a vacancy tax. How is vacancy to be established?

"It is not necessary to have hope in order to persevere."
by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Thu Oct 28th, 2021 at 02:33:49 AM EST
[ Parent ]
Here you have to have a primary residency. I'd just put a tax on every address that has no primary residency registered.
by generic on Thu Oct 28th, 2021 at 04:57:36 AM EST
[ Parent ]
Right after the WWII when there was a huge housing scarcity in Finland due to bomb damage and refugees, the government established a "room per person"-rule as a quick solution. Every municipality had a board tasked with locating houses and apartments with more rooms than dwellers, and those extra rooms were then assigned to lodgers.

Naturally there was corruption and shenanigans, but nevertheless it made every layer of the society a stakeholder on the issue and by the end of 40's a huge communal housing construction boom was on the way.

Might explain the current Finnish policy, too. Finns learn at school that homelessness has a very simple solution: give people homes.

by pelgus on Thu Oct 28th, 2021 at 07:25:02 AM EST
[ Parent ]
Every landlord is supposed to be registered and have tenancy agreements for his properties established and is liable for income tax for any rent received less allowable expenses. Thus vacancy for rental properties could be established by the lack of rental income.  If the landlord fraudulently claims non-existent rental income, he becomes liable for income tax on it. So he either pays the vacant property tax or income tax.

For non rental properties, occupation could be established by payment of electricity and other utility bills. Vacant properties tend not to use much electricity or heating oil etc. Of course some rules would have to be established, e.g. a property would have to be vacant for at least 3 months before it became liable. This would allow time for landlords to find new tenants if one left, or for renovations to be carried out while the houses was uninhabitable.

Index of Frank's Diaries

by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Oct 28th, 2021 at 07:39:24 AM EST
[ Parent ]
The Irish Independent has published a follow up letter supportive of mine yeasterday:

Successive cabinet ministers clueless about the issues (Second letter down)

FRANK SCHNITTGER is yet another voice (in the wilderness) about the interminable housing crisis (`Tax on vacant properties could solve housing crisis', Letters, October 27). If only this were the true reason behind the failure of the three cabinets since 2011.

I am at a complete loss as to even attempt to understand the mindset of any Irish government minister when it comes to housing - a basic human requirement.

It would appear that each and every member of every Irish cabinet since 2011 was clueless of an iota outside of their own department, which then begs the question as to why they deserve to be in office.

If Fianna Fáil and Fine Gael are so obtuse on housing, they will be six months out of office after the next election before they realise Sinn Féin are the government.

Declan Foley

Melbourne, Australia



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Thu Oct 28th, 2021 at 08:48:45 AM EST
In Colorado, one of the big complaints is about "affordable" housing. Property in small mountain towns attractive to rich flatlanders gets bought up at hugely inflated prices, the locals can no longer afford to live there, so there is nobody around to work in the restaurants on the weekends. Everybody is mad: the rich because the restaurants are closed, restaurant owners because they can't hire workers at sub-minimum wage, the locals because they can't afford to live there any more.

Political solution: "we need more affordable housing! Which the state or federal government needs to pay for!!!"

No, what you need is to pay the workers more.

Typical example of socialism for the rich and capitalism for the poor.

by asdf on Thu Oct 28th, 2021 at 03:24:30 PM EST
Edited version of letter also published in Irish Examiner
Show urgency on vacant housing
Show urgency on vacant housing

The news that Ireland has the 10th highest housing vacancy rate in the world makes for depressing reading. Our 183,000 vacant homes (excluding holiday homes) could solve our homelessness problem and dramatically reduce the price of houses on the open market.

Many of these vacant properties are owned by global property and hedge funds who seek to bid up rental and purchase prices by constricting supply. At least a third are owned by older people who can no longer live in them and who need to be incentivised to make them available on the open market.

If a vacant property tax brought even half these 183,000 properties to market, it could reduce house prices and solve our housing crisis almost overnight.

The Government claims it needs more information on why these houses are vacant before it can introduce a vacant property tax. This is a shallow excuse to continue to favour vacant and often absentee property owners over those who need homes to live in now. It's like saying they need more information on why people work before it can introduce an income tax!

If a vacant property tax brought even half these 183,000 properties to market, it could reduce house prices and solve our housing crisis almost overnight. It's time the Government showed some urgency on this issue and incentivised these homeowners to make their properties available on the open market to those who need them most.




Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Fri Oct 29th, 2021 at 10:55:16 AM EST
Vacant Property Tax
Sir, - November 1st was the deadline for all property owners to declare the value for Local Property Tax (LPT).

This will give Revenue a database of all habitable residential properties and their value. The Central Statistics Office has found we have 183,000 vacant properties, 4 per cent of those would end homelessness at a stroke.

The Government, through Revenue, should in the next few weeks send a demand for a Vacant Property Tax to every household registered for LPT, advising that if your property is occupied you must make a declaration to this effect.

A false declaration would entail severe financial and criminal consequences. Exemptions can be made for homes of those in nursing homes or away for work reasons.

The stick - impose an annual tax of 5 per cent, rising by 1 per cent each year; now the carrot - allow an exemption for anyone who makes a legally-binding, irrevocable offer to sell to the State at the LPT valuation, or who gets an arms' length legitimate tenant, or who actually sells the property within 12 months.

Either way this is a win-win. The State collects hundreds of millions in tax, to be used for housing or tens of thousands of properties come on to the rental and sales market relieving the pent up demand.

It's also a very green solution, using existing stock instead of building new.

- Yours, etc,

CHARLES McLAUGHLIN,

AITI, Chartered

Tax Advisor.



Index of Frank's Diaries
by Frank Schnittger (mail Frankschnittger at hot male dotty communists) on Wed Nov 3rd, 2021 at 08:34:05 AM EST
Would never fly in the USA. Maybe in Europe. I wouldn't know. But definitely not in the USA. It would elect SiperTrump.
by StillInTheWilderness on Fri Nov 5th, 2021 at 03:11:09 PM EST
[ Parent ]
I am now idly wondering if "holiday homes" are subject to tax(es) such as VAT in IE or anywhere in the EU? Which EU members exempt or defer property tax based country of "residence"? Certainly, in the construction bubble burst by the panic of '08, vacancy rates dashed investors' and mortgagors' equity aspirations.

Then, public interest in the AirBnB factor of vacancy valuation SURGED, but seems to have fallen through the floor of renters' rights, rental stock, and RE price inflation, directly related to property tax burden. I recall, some US municipalities' (notably tourist destinations) had attempted to restrict homeowner "short-term" leasing by months of own occupancy/year ordinance if not inspection fo mandatory "hotel" licensure.

by Cat on Fri Nov 5th, 2021 at 03:50:54 PM EST
by Oui on Sat Nov 6th, 2021 at 07:03:23 AM EST

Ireland: `Our houses are crumbling down around us'

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