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Disclaimer: I study the Irish housing market and have a buggy site for finding houses at https://www.gaffologist.com/ https://www.gaffologist.com/ Interestingl

Disclaimer: I study the Irish housing market and have a buggy site for finding houses at https://www.gaffologist.com/ https://www.gaffologist.com/ Interestingly Ireland has effectively no YIMBY party. The debate here reminds me of what I experienced in California 20 years ago. The left shrieks about "evil developers" and "affordable housing" and opposes new market-rate building. Meanwhile the right has mostly homeowners voting for them so they hardly have an incentive to allow more building. It's also a place where making a return through investment is horribly discouraged; ETF's are kneecapped with a 41% tax on _unrealized_ gains, and capital gains tax is high (33%). Income taxes are also punishingly high - the top rate of tax (52%) kicks in under 100k, much lower than e.g. Germany. But houses? Your primary residence is liable for only a laughably low property tax (a few hundred euro a year for most people) and you can sell it with no capital gains tax whatsoever, regardless of the gain. Even the US isn't so generous! Make a million quid in the market? The notions on you, we'll be taking that thank you very much! Have the gall to _work_ for it? Why we'll just take €520k, thanks! But you bought a house in 1992 and then shouted down all new development for the last 30 years and now can sell it for €1.5 million more than you paid? Why, that's your HOME you can't tax HOMES can you?? No wonder money all flows to homes. Not to mention that the government takes money from taxpayers and funnels it in to new house prices via help to buy, AND takes money from taxpayers and uses it to _outbid those very same taxpayers_ by buying property off the private market to meet social housing quotas. (Social housing is fine but for fuck's sake build your own, don't shrink the already tiny private market) Even better, mortgages are capped at only 4x your income and you need a 10% deposit, so you can pay 2500 a month in rent to someone like me, who bought a house in cash. Because we need to protect people from themselves, of course! (I live in my house, I don't rent it out, but you get the idea) Incidentally I'm probably selling my house an hour from Dublin a bike ride from the train with gigabit fibre on 3.5 acres soon if anyone's interested.

whitemary 4y ago
Nowhere has a "YIMBY party" haha. YIMBY types are literally just profit-seeking developers. > The left shrieks about "evil developers" and "affordable housing" and opposes new market-rate building. See...there you are. The opposition is the YIMBY types.
switch007 4y ago
You add some excellent background and context. I was reading the article screaming "it's so much more complicated than this". > Incidentally I'm probably selling my house an hour from Dublin a bike ride from the train with gigabit fibre on 3.5 acres soon if anyone's interested. I'm curious how much you're listing it above your purchase price. Show me a vendor who doesn't succumb to estate agents whispering in their ear about what you can get for it or a belief they _have_ to participate in 'supply and demand' and I'll eat my hat. (Yes, I'm just as guilty of this)
- CalRobert 4y ago
  How would I not participate in supply and demand? I'll sell to the highest bidder, whatever that is. Though I suspect I'll take a loss when all is said and done. I was stupid enough to buy a protected structure and thanks to heritage's intransigence I now have a thatched cottage (recently rethatched!) with a beautiful 120 sqm extension with huge windows, high ceilings, engineered wood floors, heat pumps, insulated foundation.... and no insurance. Because of the thatched bit...
  - thaumasiotes 4y ago
    I thought there was an imitation thatch people could use? Looks like thatch (for "protected structure" purposes); doesn't rot?
    - CalRobert 4y ago
      Removing or replacing the existing thatch with anything but the same material (oaten straw) is highly illegal and could land me in jail. Of course, heritage's stubbornness is also why my own county lost 40% of thatched buildings in the last 20 years and will probably lose them all in the next 20. In some cases buildings are worth literally less than nothing (the land would be worth more without them) because heritage is naive enough to think some rich eccentric wants to plow millions of Euro in to fixing some dump in the middle of nowhere. I mean, 150,000 for this building is a joke - https://www.offalyexpress.ie/news/home/1081285/historic-mill-in-offaly-comes-on-the-market-for-attractive-price.html https://www.offalyexpress.ie/news/home/1081285/historic-mill... The land would be worth more if the building were demolished (and it had planning permission to build homes). But heritage officers won't allow that, so nature will demolish slowly (and make the town ever uglier in the process) and THEN in 30 years or so it will finally be demolished.
biorach 4y ago
What do you think of Dermot Desmond's article? https://www.irishtimes.com/opinion/dermot-desmond-everyone-has-a-right-to-a-home-here-is-how-it-can-be-done-1.4195439 https://www.irishtimes.com/opinion/dermot-desmond-everyone-h...
- CalRobert 4y ago
  Haven't read it, though quickly skimming doesn't give much hope. All this talk about "hoarding" and not enough about how it's default-illegal to build a house until you satisfy every church biddy around. We need as-right zoning. I'd weep for joy if Ireland passed sensible ADU rules like California.
- returningfory2 4y ago
  Not the OP, but I would describe this article as muddled. And in a way that’s common for people who haven’t thought deeply about the housing market. For example he complains that 95% of apartments are owned by institutions, but also that rents are too high. These complaints are in tension. One of the key ways in which rental supply is expanded is through large developments that are owned and managed by companies. For example, here in Downtown Brooklyn we’re getting a new “super tall” building with 425 apartments for rent [1]. How can you create this kind of rental supply without institutions? Is your plan to somehow sell 425 apartments to individual owners and hope those owners can rent them out? I don’t think it makes sense. [1] https://en.m.wikipedia.org/wiki/The_Brooklyn_Tower https://en.m.wikipedia.org/wiki/The_Brooklyn_Tower
  - marcus_holmes 4y ago
    One of the weird things moving from Australia to Germany was that most rentals are owned by private individuals in Australia and companies in Germany. The difference is huge - renter's rights are much greater in Germany, and that seems to go hand-in-hand with institutional landlords (I guess because the landlords aren't voters but the tenants are, so laws skew towards the tenants).
    - whitemary 4y ago
acchow 4y ago
The tax-advantaged status of your primary residence is also a major driver of the housing bubble in Canada as well.
- ska 4y ago
  Isn't there a lifetime limit of capital gains shelter there much less than the price of homes in the big cities? It's not like the US where mortgate payments are sheltered, right?
  - acchow 4y ago
    No, in Canada there is no limit to the tax exemption for primary residence. > the US where mortgate payments are sheltered Not sure what you mean by this. In the US, the interest on your mortgage is tax deductible up to a certain amount. But the amount of this tax advantage is fixed at your purchase price. You don't get increasing tax savings as the value of your home increases. As for capital gains tax deduction, this is limited to $250k for a single filer, or $500k for married.
    - ska 4y ago
      Ah I see, there is a lifetime capital gains exemption limit but not applied to “primary” residence. There it seems to just be exempt. And yes I meant there isn’t a mortgage deduction but had think while typing.
- Tiktaalik 4y ago
  It could be, though I can't help but notice that the USA levies taxes on primary homes and in many jurisdictions in that country they also have very expensive real estate. (yes there's a sizeable exemption, but not so big that no one would ever pay it) I suspect other issues such as low rental vacancy, not enough supply of homes and very low property taxes are more dominant causes of high Canadian real estate prices.
anotherhue 4y ago
Best summary I've seen in years. I emigrated due to this nonsense.
- CalRobert 4y ago
  Immigrating here was a mistake.
xp84 4y ago
> Income taxes are also punishingly high - the top rate of tax (52%) kicks in under 100k Wow -- got to make up for that famously lax corporate income tax, I guess! Which provides an interesting window into transnational company exploits. Ireland's decided to place more tax burden on individuals vs companies (which could have good reasons and could in theory even be net-neutral domestically, just shifting tax burden around between companies and their shareholders.) Now a giant tech company decides to domicile as much of itself as possible in Ireland, while themselves remaining US citizens and residents, since our tax code taxes individuals far more lightly than Ireland. "This is a perfectly balanced game!"
- roomey 4y ago
  Well it isn't quite like this. The personal tax rate is banded, so only your income _above_ a certain amount is taxed at 52%. Like, it's a progressive way to tax, rather than a lower flat rate. Also, the gov just announced a big surplus again from multinationals, so I don't think it lines up to say the tax burden is shifted to individuals, when there is a really big take from corp tax also; "Higher corporation tax receipts are expected to contribute to a budget surplus of €10 billion this year and €16.2 billion next year." https://www.rte.ie/news/business/2023/0418/1377638-cso-government-finance-figures/ https://www.rte.ie/news/business/2023/0418/1377638-cso-gover...
  - CalRobert 4y ago
    Certainly, this is very normal. It makes sense to have a high rate of tax on extremely high earners! But in the US the top tax rate kicks in at $539,901 (for a single person! Higher for married). In Ireland it kicks in at the princely sum of €70,044. We tax people on decent but not incredibly high incomes as though they're on Ferrari money. You might think "well that's Europe for you" but in Germany the highest rate of tax kicks in at €277,826 per year. And for your taxes you get: ridiculously expensive childcare (€1000 per month per kid - compared to nothing or a couple hundred a month per kid in other EU countries) a collapsing HSE (wait times for pediatricians can be a year+ public, and I had to spend hours on the phone to find a private one who'd see my 3 year old in under a month) (almost all) religious schools that still ask for a "voluntary" contribution mediocre public transport US-style car-dependent single use sprawl horrible cycling infra incompetent and agonizingly slow public bureaucracies (_especially_ immigration but tbf immigration is horrible most places) and very high costs of living. On the bright side, it's one of the better-shielded places from climate breakdown. The weather here is amazing. I grew up in a hot place and never want to be over 40C again.
twelvechairs 4y ago
> But you bought a house in 1992 and then shouted down all new development for the last 30 years and now can sell it for €1.5 million more than you paid? Why, that's your HOME you can't tax HOMES can you?? The other side is this helps people move. When a parents kids move out of home you dont want them holding onto big homes just because theyd take a major financial hit by moving, even if their current home doesnt suit their lifestyle. Incentivising ownership through reducing capital gains for owners also encourages a society where people own their home which hugely softens the issues of retirement and pensions as well as greatly adding to peoples psychological sense of security. Increasing annual land taxes is a better solution imo, especially in more desirable locations (they should stay low in poorer areas).
- nordsieck 4y ago
  > The other side is this helps people move. When a parents kids move out of home you dont want them holding onto big homes just because theyd take a major financial hit by moving, even if their current home doesnt suit their lifestyle. I don't think this really matters unless a lot of people are upside down on their homes. We could probably target a 2% annual housing price decline (until builders stopped building) and still be fine in that regard.
  - kodah 4y ago
    Everyone is upside down on a home in at least the first five years. In a world with job instability and lack of remote options, I can see their argument as valid.
ghiculescu 4y ago
> mortgages are capped at only 4x your income How does this work? If I'm earning (say) 50k, can I only take a mortgage of up to 200k?
- cuSetanta 4y ago
  Yes basically. I am in the process of getting a mortgage in Ireland and they will give you up to 4x the gross income of those applying. This doesn't include any deposit or savings you may have of course.
  - logical_ferry 4y ago
    Wow. That seems very conservative. Over here in Croatia they only look at your last 3-6 pay slips and that's it. I own a small LLC and I gave myself a raise before taking out a mortgage, then after I got the mortgage I returned back to my original salary. On a 2.200 EUR before tax salary I was cleared for a 150.000 EUR mortgage, but could have went even above that. They don't care about deposits or savings, even though owning a credit card and investing briefly (40 EUR each month for 2-3 months, then you can stop investing) in one of the bank's funds does lower your interest rate (which was 2.48% before New Year, now it over 3%).
cuSetanta 4y ago
> Incidentally I'm probably selling my house an hour from Dublin a bike ride from the train with gigabit fibre on 3.5 acres soon if anyone's interested. Christ I would love to be, but 3.5 acres is way out of my league. Good luck with the sale man!
- CalRobert 4y ago
  The land is actually not expensive! This place is less than a 2 bed flat in parts of Dublin.
sgt 4y ago
I couldn't help reading your post in an Irish accent. Perfect
- CalRobert 4y ago
  I hope it was pleasant! Alas, even after a decade here my accent remains firmly Californian. My kids have Irish accents though.

whitemary 4y ago

Nowhere has a "YIMBY party" haha. YIMBY types are literally just profit-seeking developers. > The left shrieks about "evil developers" and "affordable housing" and opposes new market-rate building. See...there you are. The opposition is the YIMBY types.

switch007 4y ago

You add some excellent background and context. I was reading the article screaming "it's so much more complicated than this". > Incidentally I'm probably selling my house an hour from Dublin a bike ride from the train with gigabit fibre on 3.5 acres soon if anyone's interested. I'm curious how much you're listing it above your purchase price. Show me a vendor who doesn't succumb to estate agents whispering in their ear about what you can get for it or a belief they _have_ to participate in 'supply and demand' and I'll eat my hat. (Yes, I'm just as guilty of this)

CalRobert 4y ago
How would I not participate in supply and demand? I'll sell to the highest bidder, whatever that is. Though I suspect I'll take a loss when all is said and done. I was stupid enough to buy a protected structure and thanks to heritage's intransigence I now have a thatched cottage (recently rethatched!) with a beautiful 120 sqm extension with huge windows, high ceilings, engineered wood floors, heat pumps, insulated foundation.... and no insurance. Because of the thatched bit...
- thaumasiotes 4y ago
  I thought there was an imitation thatch people could use? Looks like thatch (for "protected structure" purposes); doesn't rot?
  - CalRobert 4y ago
    Removing or replacing the existing thatch with anything but the same material (oaten straw) is highly illegal and could land me in jail. Of course, heritage's stubbornness is also why my own county lost 40% of thatched buildings in the last 20 years and will probably lose them all in the next 20. In some cases buildings are worth literally less than nothing (the land would be worth more without them) because heritage is naive enough to think some rich eccentric wants to plow millions of Euro in to fixing some dump in the middle of nowhere. I mean, 150,000 for this building is a joke - https://www.offalyexpress.ie/news/home/1081285/historic-mill-in-offaly-comes-on-the-market-for-attractive-price.html https://www.offalyexpress.ie/news/home/1081285/historic-mill... The land would be worth more if the building were demolished (and it had planning permission to build homes). But heritage officers won't allow that, so nature will demolish slowly (and make the town ever uglier in the process) and THEN in 30 years or so it will finally be demolished.

biorach 4y ago

What do you think of Dermot Desmond's article? https://www.irishtimes.com/opinion/dermot-desmond-everyone-has-a-right-to-a-home-here-is-how-it-can-be-done-1.4195439 https://www.irishtimes.com/opinion/dermot-desmond-everyone-h...

CalRobert 4y ago
Haven't read it, though quickly skimming doesn't give much hope. All this talk about "hoarding" and not enough about how it's default-illegal to build a house until you satisfy every church biddy around. We need as-right zoning. I'd weep for joy if Ireland passed sensible ADU rules like California.
returningfory2 4y ago
Not the OP, but I would describe this article as muddled. And in a way that’s common for people who haven’t thought deeply about the housing market. For example he complains that 95% of apartments are owned by institutions, but also that rents are too high. These complaints are in tension. One of the key ways in which rental supply is expanded is through large developments that are owned and managed by companies. For example, here in Downtown Brooklyn we’re getting a new “super tall” building with 425 apartments for rent [1]. How can you create this kind of rental supply without institutions? Is your plan to somehow sell 425 apartments to individual owners and hope those owners can rent them out? I don’t think it makes sense. [1] https://en.m.wikipedia.org/wiki/The_Brooklyn_Tower https://en.m.wikipedia.org/wiki/The_Brooklyn_Tower
- marcus_holmes 4y ago
  One of the weird things moving from Australia to Germany was that most rentals are owned by private individuals in Australia and companies in Germany. The difference is huge - renter's rights are much greater in Germany, and that seems to go hand-in-hand with institutional landlords (I guess because the landlords aren't voters but the tenants are, so laws skew towards the tenants).
  - whitemary 4y ago

acchow 4y ago

The tax-advantaged status of your primary residence is also a major driver of the housing bubble in Canada as well.

ska 4y ago
Isn't there a lifetime limit of capital gains shelter there much less than the price of homes in the big cities? It's not like the US where mortgate payments are sheltered, right?
- acchow 4y ago
  No, in Canada there is no limit to the tax exemption for primary residence. > the US where mortgate payments are sheltered Not sure what you mean by this. In the US, the interest on your mortgage is tax deductible up to a certain amount. But the amount of this tax advantage is fixed at your purchase price. You don't get increasing tax savings as the value of your home increases. As for capital gains tax deduction, this is limited to $250k for a single filer, or $500k for married.
  - ska 4y ago
    Ah I see, there is a lifetime capital gains exemption limit but not applied to “primary” residence. There it seems to just be exempt. And yes I meant there isn’t a mortgage deduction but had think while typing.
Tiktaalik 4y ago
It could be, though I can't help but notice that the USA levies taxes on primary homes and in many jurisdictions in that country they also have very expensive real estate. (yes there's a sizeable exemption, but not so big that no one would ever pay it) I suspect other issues such as low rental vacancy, not enough supply of homes and very low property taxes are more dominant causes of high Canadian real estate prices.

anotherhue 4y ago

Best summary I've seen in years. I emigrated due to this nonsense.

CalRobert 4y ago
Immigrating here was a mistake.

xp84 4y ago

> Income taxes are also punishingly high - the top rate of tax (52%) kicks in under 100k Wow -- got to make up for that famously lax corporate income tax, I guess! Which provides an interesting window into transnational company exploits. Ireland's decided to place more tax burden on individuals vs companies (which could have good reasons and could in theory even be net-neutral domestically, just shifting tax burden around between companies and their shareholders.) Now a giant tech company decides to domicile as much of itself as possible in Ireland, while themselves remaining US citizens and residents, since our tax code taxes individuals far more lightly than Ireland. "This is a perfectly balanced game!"

roomey 4y ago
Well it isn't quite like this. The personal tax rate is banded, so only your income _above_ a certain amount is taxed at 52%. Like, it's a progressive way to tax, rather than a lower flat rate. Also, the gov just announced a big surplus again from multinationals, so I don't think it lines up to say the tax burden is shifted to individuals, when there is a really big take from corp tax also; "Higher corporation tax receipts are expected to contribute to a budget surplus of €10 billion this year and €16.2 billion next year." https://www.rte.ie/news/business/2023/0418/1377638-cso-government-finance-figures/ https://www.rte.ie/news/business/2023/0418/1377638-cso-gover...
- CalRobert 4y ago
  Certainly, this is very normal. It makes sense to have a high rate of tax on extremely high earners! But in the US the top tax rate kicks in at $539,901 (for a single person! Higher for married). In Ireland it kicks in at the princely sum of €70,044. We tax people on decent but not incredibly high incomes as though they're on Ferrari money. You might think "well that's Europe for you" but in Germany the highest rate of tax kicks in at €277,826 per year. And for your taxes you get: ridiculously expensive childcare (€1000 per month per kid - compared to nothing or a couple hundred a month per kid in other EU countries) a collapsing HSE (wait times for pediatricians can be a year+ public, and I had to spend hours on the phone to find a private one who'd see my 3 year old in under a month) (almost all) religious schools that still ask for a "voluntary" contribution mediocre public transport US-style car-dependent single use sprawl horrible cycling infra incompetent and agonizingly slow public bureaucracies (_especially_ immigration but tbf immigration is horrible most places) and very high costs of living. On the bright side, it's one of the better-shielded places from climate breakdown. The weather here is amazing. I grew up in a hot place and never want to be over 40C again.

twelvechairs 4y ago

> But you bought a house in 1992 and then shouted down all new development for the last 30 years and now can sell it for €1.5 million more than you paid? Why, that's your HOME you can't tax HOMES can you?? The other side is this helps people move. When a parents kids move out of home you dont want them holding onto big homes just because theyd take a major financial hit by moving, even if their current home doesnt suit their lifestyle. Incentivising ownership through reducing capital gains for owners also encourages a society where people own their home which hugely softens the issues of retirement and pensions as well as greatly adding to peoples psychological sense of security. Increasing annual land taxes is a better solution imo, especially in more desirable locations (they should stay low in poorer areas).

nordsieck 4y ago
> The other side is this helps people move. When a parents kids move out of home you dont want them holding onto big homes just because theyd take a major financial hit by moving, even if their current home doesnt suit their lifestyle. I don't think this really matters unless a lot of people are upside down on their homes. We could probably target a 2% annual housing price decline (until builders stopped building) and still be fine in that regard.
- kodah 4y ago
  Everyone is upside down on a home in at least the first five years. In a world with job instability and lack of remote options, I can see their argument as valid.

ghiculescu 4y ago

> mortgages are capped at only 4x your income How does this work? If I'm earning (say) 50k, can I only take a mortgage of up to 200k?

cuSetanta 4y ago
Yes basically. I am in the process of getting a mortgage in Ireland and they will give you up to 4x the gross income of those applying. This doesn't include any deposit or savings you may have of course.
- logical_ferry 4y ago
  Wow. That seems very conservative. Over here in Croatia they only look at your last 3-6 pay slips and that's it. I own a small LLC and I gave myself a raise before taking out a mortgage, then after I got the mortgage I returned back to my original salary. On a 2.200 EUR before tax salary I was cleared for a 150.000 EUR mortgage, but could have went even above that. They don't care about deposits or savings, even though owning a credit card and investing briefly (40 EUR each month for 2-3 months, then you can stop investing) in one of the bank's funds does lower your interest rate (which was 2.48% before New Year, now it over 3%).

cuSetanta 4y ago

> Incidentally I'm probably selling my house an hour from Dublin a bike ride from the train with gigabit fibre on 3.5 acres soon if anyone's interested. Christ I would love to be, but 3.5 acres is way out of my league. Good luck with the sale man!

CalRobert 4y ago
The land is actually not expensive! This place is less than a 2 bed flat in parts of Dublin.

sgt 4y ago

I couldn't help reading your post in an Irish accent. Perfect

CalRobert 4y ago
I hope it was pleasant! Alas, even after a decade here my accent remains firmly Californian. My kids have Irish accents though.