The Irish Times - Thursday, December 16, 2010
Section 23 investors 'may face bankruptcy' over tax bills
Some Section 23 investors who bought properties with 10-year tax breaks are now facing unanticipated tax bills in the new year
THE withdrawal of Section 23 tax shelter reliefs by the Government from January 1, 2011 will leave many property investors unable to pay their tax bills and will see some go bankrupt, says estate agent Keith Lowe, chief executive officer of Douglas Newman Good.
While there may be limited sympathy out there for the woes of property investors, Lowe believes those most affected by the withdrawal of this tax relief will not be builders and speculators but relatively small-time investors with a maximum of three to four properties.
Investors can continue to offset capital allowances against rental income from their Section 23 property, but can’t use them to shelter rental income from other properties.
With an election looming, the Government is seen by many in the industry to have side-stepped the issue of a full blown property tax, instead targeting investor reliefs because they are likely to be less controversial with the general public.
The Government may have underestimated the strength of feeling out there among investors. The Irish Property Owners Association has vowed to mount a legal challenge to the move and senior legal and tax figures have said it is open to constitutional challenge, saying the Government can’t legally impose retrospective taxation.
Martin Whelan of the Construction Industry Federation says that individuals and companies acquired properties on the basis of tax allowances set down by the state “and it will have a knock-on effect on people’s abilities to manage their financial affairs.
“People used offsets to keep their businesses viable, and you can say what you want about that but the reliefs were introduced by the state and people planned their affairs on that basis.”
Mr Lowe, who has written to the minister outlining his concerns, says he is not against the introduction of a property tax. He has sold a lot of Section 23 properties over the last number of years to people who will now be left with properties they’ve paid a premium on in locations they would not otherwise have chosen to invest in.
While the stock of Section 23 properties around the country has dwindled, there are still some for sale in Dublin and quite a few around the country in the midlands, Waterford and in the west of Ireland. The further you travel out of Dublin the more are available.
Revenue does not have a figure for the number of Section 23 units in the country but in the last 10 years, the Department of the Environment has issued compliance certificates on 33,751 properties eligible for Section 23 relief. If owners sell the unit before the 10-year tax relief period has elapsed, the unit is subject to a clawback of reliefs, and according to Lowe, “people won’t have the money to pay it”.
Granting the remaining tax allowances on these schemes continues to cost the state up to €400 million per annum, according to estimates.
Revenue says it doesn’t have figures on the number of Section 23 residential units in the country but says the cost to the exchequer of urban and town renewal tax incentives alone between 2004 and 2008 was €669 million.
David Cantwell of Hooke MacDonald, which sold a large proportion of Section 23 residential units during the boom, says the proposal to terminate and alter the scope of the reliefs “will cause widespread hardship to numerous people who acquired qualifying properties in good faith never believing that the reliefs could be reneged on in such an unfair manner.
The Government has already received significant tax revenues on these properties in the form of stamp duty and Vat.” He says the worst affected will be those who are already struggling to survive who will be sent “ over the brink”.
In 2008, Hooke and MacDonald published a brochure telling investors it was “a very good time to buy as there is evidence of an imminent shortage of qualifying properties now that the deadline has passed”.
It promised “great tax savings for investors” saying “Section 23 relief can wipe out your tax bills on all existing or future rental income”.
Hooke MacDonald says the only Section 23 scheme it has left in Dublin is Cameron Court on Cork Street, Dublin 8, a development of 76 apartments with 65 per cent reliefs. The final phase is being sold by the receiver. In 2008 the asking price for two-bed apartments was €360,000; it has since dropped to €195,000.
Keith Lowe says that people who’ve bought Section 23 residential units did so in locations that were being regenerated and not considered to be prime .
“Some of these people wouldn’t have bought into schemes if there was no tax relief, and now they are being told the tax relief isn’t available.”
The premium to buy Section 23 properties has been as high as 25-33 per cent. “In recent years the percentage was lower but four to five years ago you were paying a third more than the owner occupier value.” On a property valued at €300,000, this was a premium of up to €100,000.
Agents reckon there will be repercussions for the property market: some tax-based investor schemes survived only because investors could fund bank interest payments through the savings generated from capital allowances. “There will also be an impact on Nama-owned properties as it will impact the values of of a lot of their properties,” says Keith Lowe.
Monday, December 20, 2010
Bernard McNamara's crumbling property empire is in danger of implosion as another two of his firms slip into receivership.
Varleigh and Breydon Developments have both been put into receivership by Ulster Bank, with PWC appointed to both firms as the receivers.
The companies are involved in property development, much of it in the Tallaght area, and public relations executive James Morrissey is a director of both companies.
Mr McNamara, who is involved in negotiations with NAMA, creditors and foreign banks has already seen one of his key companies, Michael McNamara and Co, one of the biggest building and civil engineering groups in Ireland, go into receivership.
Mr McNamara owns the company but has taken a step back from its activities in recent months. He is believed to have debts of €1.5bn and has been in intense talks with NAMA for months.
It is not known what personal guarantees the Clare-born developer has.
While a popular figure in the property game, Mr McNamara came under financial pressure after he invested in the Irish Glass Bottle site in Ringsend, Co Dublin.
Mr McNamara took a stake in Becbay, the company behind the venture, but ended up being sued by a group of private investors put together by Davy Stockbrokers.
NAMA moved a fortnight ago to appoint a receiver to Mr McNamara's flagship Radora Developments after several weeks of negotiations with the developer.
Radora owns the giant Elm Park prime office development in Dublin 4.
A sale of the Elm Park development will be one of the largest sell-offs in south Dublin for some time and could impact on prices for commercial property throughout the area.
Friends First and ACC were also mentioned at one point as likely to apply for a receiver to the Radora company.
The receiverships come as NAMA works its way through business plans submitted by the big property developers to figure out which parts of their operations may be viable and which should be shut down.
The agency has an 80-strong team -- including insolvency experts -- that has been working with the cash-strapped developers to work out how it can get them to repay the maximum amount.
The writing was on the wall for Michael McNamara Construction over recent weeks when NAMA rejected its business plan and went to court to have a receiver appointed.
- Emmet Oliver Deputy Business Editor
Bank of Ireland's ICS Building Society has become the first mortgage lender to tighten the rules for solicitors for both home and commercial property lending.
The move follows boomtime abuses by solicitors such as Michael Lynn and Thomas Byrne.
In an email issued to mortgage brokers in recent days, ICS said it would no longer accept undertakings from solicitors who were backed only by the profession's so-called Assigned Risks Pool, a safety net for solicitors who have failed to raise professional indemnity insurance.
ICS also said it would now demand proof from solicitors that they held indemnity insurance "for all home loans irrespective of amount".
ICS said it was the first lender in the industry to change its requirements following a change in the Law Society's own rules and that it expected other lenders to follow its lead.
The building society said it would require all solicitors to show proof of their insurance "prior to any drawdown of funds".
A bit like closing the stable door after the horse has bolted really!
The task facing the organisation appears monumental, with 69pc of the loans linked to non-income-producing land and development sites, according to research seen by The Sunday Telegraph. NAMA has a stated aim of reducing the loanbook by 25pc over the next three years and also has €5bn to invest in its assets, but the unwinding process could take a decade.
How Nama behaves is key to London and the UK, because 30pc of its assets are in Britain. One executive at a leading British property company who met with NAMA directors recently says it is "preparing to act" and has a "clarity of purpose" that puts it ahead of British banks in the unwinding process. The EU bail-out, the source said, provides NAMA with headroom and flexibility, and the fact the loans were bought at such a sharp discount – an average of 58pc for the first tranche – means it does not have to worry about suffering writedowns by agreeing disposals below the book value of properties.
NAMA has not publicly stated that its policy on foreign assets will be different to those in Ireland – and it declined to respond to telephone and email questions from The Sunday Telegraph. But sources believe disposals in London are likely to be targeted quickly because of the liquidity of the bullish market.
The Citigroup tower is already up for sale, after Maud and Quinlan were encouraged to seek a disposal by the syndicate of lenders, which includes NAMA, that provided £875m for the deal.
Analysts estimate that there is £10bn of Irish-owned property in London, although much of it, including Hamley's toy store on Regent Street, which is owned by the family behind Brennans Bread, is not in NAMA.
The organisation has not publicly revealed which assets are under its remit, but they are thought to include The Connaught, Berkeley and Claridge's hotels – although McKillen, the owner, is legally challenging the transfer of the debt to NAMA – along with Battersea Power Station, Goldman Sachs' European headquarters at River Court, Louis Vuitton's flagship store on New Bond Street which is owned by Daly, and 20 Grosvenor Square, a former European HQ of the US navy, which is backed by debt from Irish Nationwide.
Some assets are already being off-loaded, such as Audley Square Car Park in Mayfair, which was owned by Quinlan. NAMA is understood to have agreed to sell the site to Qatar Holdings for €180m after buying the loan from Anglo Irish for €40m, leaving it with a healthy profit. The site has planning consent for a 220,000 sq ft residential scheme and the deal highlights the demand for prime assets with development potential.
According to Harm Meijer, property analyst at JP Morgan, the demand for such assets in London means the market could "absorb" any NAMA sales without asset values being dampened.
"The evidence we are seeing is that some prime buyers are now prepared to look at quality secondary," he said. "Average transaction volumes in the UK are about £31bn a year. I think we could go above that next year."
Rob Corbett, head of Irish investment in the UK at Jones Lang LaSalle, pointed to another potential impact from the unwinding of Ireland's property bubble – the disappearance of two key drivers for the pre-2007 UK property market, Irish investors and Irish banks such as Bank of Ireland, Anglo Irish, and Allied Irish.
"I would say there had been a 99pc reduction in buyside activity," Corbett said.
However, the central London investment market has powered on. Last week, Hammerson and the Oman Investment Fund sold Bishops Square for £557m, more than 25pc the office building valuation of last year. "There is so much equity chasing London at the moment," says Corbett.
Nonetheless, the unwinding of Irish assets is set to be a key topic for the property market in 2011 and beyond. In 2007, Quinlan and Co had the market dancing to the Irish flute, but next year the sound from Irish investors threatens to be the Death March as they depart trophy London assets.
From "Irish flute to Death March".
HUNDREDS of millions of euro are being lost to the economy in what should be the busiest shopping week of the year.
The return of heavy snow and freezing conditions -- made worse by a salt shortage -- has led to a downturn in high street trade, and mass cancellations of Christmas parties.
In a survey of its members, the Irish Business Employers Confederation (Ibec) estimated that the last cold snap cost the economy €640m.
But with Arctic conditions returning at the weekend, the final tally for suffering traders is expected to be much worse.
Ibec director Brendan Butler described the days leading up to Christmas Day as critical to the retail sector and warned that any further losses could be "one body blow too many for some".
Meanwhile, research by Retail Excellence Ireland (REI) has revealed that December sales could be down 8pc on the same month last year, twice what retailers had anticipated.
The survey showed that consumer activity had picked up after the first week in December when harsh weather took its toll.
Meanwhile, retailers in Dundalk, Co Louth, believe they are winning the battle to slow down the deluge of shoppers fleeing across the border to Newry.
Earlier this month, a number of shops in the town joined forces to reduce prices by the amount of the VAT due on them -- the resulting 'VAT-free shopping in Dundalk', campaign seems to be working.
Jock McArdle of Outdoor Exchange said: "People are delighted to get a saving, particularly at this time of year."
In Letterkenny, Co Donegal, where business came to a virtual standstill after up to 10 inches of snow fell over the weekend, anger was mounting toward the National Roads Authority.
"The country people are our lifeblood ... and they can't get into town," said angry sports retailer Brian McCormick.
Last night, chief executive of Letterkenny Chamber of Commerce Toni Forrester said businesses were outraged at the lack of resources to keep the streets and footpaths clear.
"Letterkenny is the commercial heartland of Donegal and the main street is like a skating rink," she said. "For every €1,000 spent in the town, €210 is going to the Government in VAT, and yet this is the service we are getting in return."
- Anita Guidera and Elaine Keogh
Tuesday, December 14, 2010
Stamp duty cut ‘may boost house market’
By Brian O’Mahony
Thursday, December 09, 2010
THE change in stamp duty on houses could help boost housing demand, analysts at Davy research suggest in a note yesterday.
a d v e r t i s e m e n t
It remains to be seen what impact the changes in residential stamp duty will have, but they do offer a "glimmer of hope to the current depressed market", Davy’s Flor O’Donoghue said.
For residential property up to now, stamp duty on second-hand housing transactions was exempt up to €125,000 and charged at 7% thereafter.
With immediate effect, stamp duty will be at a flat 1% for housing transactions up to €1m and 2% over €2m.
"Reform of stamp duty may not initially lead to a stampede to estate agents’ doors, but it should help a moribund housing market entering 2011," he said.
In terms of the impact, if we take the average house price in Ireland at €199,000, the saving in stamp duty for a second-time buyer will be €3,171, given the duty will fall from €5,158 to €1,987.
Taking the average house price of almost €240,000 in Dublin, the difference stretches to €5,589, he said.
The higher the price, the bigger the savings.
If this stamp duty reform does have an impact, however marginal, Grafton Group, the country’s leading builders merchants and DIY (Woodies) operator, should come well out of the pick-up, he said.
Since the slump it has suffered a 53% fall in Irish revenues from peak, with serious consequences for earnings.
Having lost around €12m in Ireland in 2010, Grafton may well return to profit in its domestic operations in the second half of the current year as the rate of decline in revenues has moderated significantly, Mr O’Donoghue said.
If the changes in stamp duty have any impact at all the broker says that would "accelerate Grafton’s profit recovery in Ireland".
"We are currently forecasting that Grafton will be around break-even in Ireland in 2011," he said.
Given profits peaked in Ireland at €130.4m in 2006, expectation levels are clearly extremely modest, but even a modest improvement in volumes is likely to result in a noticeable improvement in the overall outturn for the year in Ireland, he said.
This story appeared in the printed version of the Irish Examiner Thursday, December 09, 2010
THE European Union is to launch an investigation into a local authority that granted planning permission for a number of family homes despite knowing that buildings in the area had been destroyed as a result of flooding.
Jim Higgins MEP, who sits on the EU Petitions Committee, has confirmed he will bring three families to Europe to tell how their lives were destroyed by the decisions.
They were forced to flee their homes in rural Galway following serious flooding last year and have been continually denied assistance from the state.
The EU probe will now focus on why their "suffering was exacerbated by the failure of their government to react in an efficient and timely manner".
It will be a significant case given the huge level of damage caused by flooding in Ireland last year and the likely repeat of flooding in the future.
"The families were granted planning permission in an area which the Office of Public Works described as prone to repeated flooding in its 1992 Flood Report, of which the families were unaware at the time of building," said Higgins.
"The crucial question is why planning permission was granted in an area which the local planning authority knew, via reliable OPW reports, to be prone to flooding."
The EU petitions committee is charged with investigating complaints from European citizens once all domestic avenues to address the concern have been exhausted.
Tom Flatley, whose family is one of the three due to travel to Brussels, was granted planning permission to build his family home in Galway 10 years ago.
Yet at the same time, just 50 yards from his front door, another house was being demolished due to continuous flooding.
Despite this, and the area having been identified as hazardous in a 1997 flood report, Flatley has been consistently refused state assistance in relocating his family.
"We are very happy that they have agreed to investigate it but it has been a long year of trying to get answers and help," he said.
"The council refuses to speak to us and the OPW has said that the situation we are in is of no responsibility to them.
"Planning is one issue but the way people have been treated also has to be looked at."
Higgins added: "His two houses have been destroyed, he can't get insurance, he can't make a complaint and there is no compensation from the government."
As part of the probe, a delegation from Europe could visit the rural area of Galway in question.
Most people agree the current retail planning system does not need an overhaul, so why has government pledged to review it?John Ruddy reports
It may have seemed like a relatively trivial footnote to the EU/IMF bailout programme, but the government's undertaking to review the retail floor space cap is causing all sorts of alarm bells to ring across the retail sector.
The review, scheduled to take place in the third quarter of 2011, is to examine the economic impact of the removal of the cap, and whether it would make the retail sector more competitive and result in lower prices for consumers.
This clause is believed to have been inserted at the behest of the Competition Authority, but the real question is why either the IMF or the government have been so eager to acquiesce to its inclusion.
A 'heat map' document published in early November suggests that the IMF sees no structural or competitive problem with how the retail sector here is regulated, compared to Belgium, France or Italy, for example.
Meanwhile, the government is already conducting a review that encompasses an examination of the floor space cap, with planning minister Ciaran Cuffe expected to publish revised retail planning guidelines (RPGs) before the IMF-sanctioned review would have even begun.
So why the need for another examination? Is it that the Competition Authority views the Department of the Environment's review as a fait accompli, in as much as a green minister (Cuffe, or his successor) will more than likely keep the small guys happy by keeping Wal-Mart and Costco out?
Or is it about government bowing to pressure from large international retailers, who feel stymied by the existing planning framework and have promised jobs and tax returns in exchange for a less restrictive model?
Whichever is true, the same issue remains just as pertinent – namely whether Ireland should be so quick to change its planning framework just to suit new market entrants.
The argument is often put forward that Asda – the UK division of Wal-Mart – will not enter Ireland unless the cap is removed. This, it is said, means that 'real' price competition does not take place here, with Tesco (as market leader) able to set the 'market' price which indigenous players can then follow. This argument falls down in several areas.
If Asda were to enter the Republic, it would most likely do it through acquisition. How would replacing one retailer with another result in more competition?
Secondly, the argument that the cap acts as a barrier to entry is flawed. If the market is so over-regulated and difficult, how have the world's fourth-biggest (Tesco), fifth-biggest (Lidl) and ninth-biggest (Aldi) retailers all been able to enter in the past 13 years?
As it stands, these three retail groups alone command around 37% of the take-home grocery market – more than Superquinn and Dunnes combined, and more than their relative cumulative share in the UK. It is true that these international players have helped push down grocery prices, and it is likely that the arrival of more multinationals would do the same.
However, if Aldi, Lidl and Tesco can play by the existing rules which, though flawed, help preserve a decent mix of large and small shops, the argument for a total removal of the floor space cap seems redundant.
In essence, the crux of the issue is the difference between price and value, a distinction which government agencies such as the Competition Authority or the National Consumer Association seem unable or unwilling to understand.
A 100,000 square-foot hypermarket that serves a catchment area of three towns may offer the lowest price. On the other hand, two mid-sized supermarkets, four convenience stores, 10 butchers, 14 greengrocers, seven newsagents and two post offices offer genuine value, as they provide choice, accessibility, employment, service, an outlet for local producers and genuine competition between each other.
Certainly, the existing planning framework requires tweaking, as it was designed for a retail sector that has since evolved beyond recognition.
New developments must be assessed based on genuine need rather than on the rates they will provide, while the discounters' prejudicial treatment at the hand of local authorities also needs to be addressed.
This is far from a controversial view, as even the most protectionist of small shopkeepers would admit the current planning model is far from perfect.
However, with a near-universal recognition that the system does not need a total overhaul, why is a lone voice attempting to call the shots?
John Ruddy is editor of grocery retail magazine 'Checkout'
COMMERCIAL property deals will surge next year as NAMA begins to sell land, receiverships increase and new tax measures encourage the sale of hotels, according to Guy Hollis, the managing director of CB Richard Ellis Ireland.
"We expect to see a notable increase in the volume of investment properties being offered for sale in 2011 as banks and borrowers start to unwind their positions and NAMA begin to work through business plans with borrowers," he told the Irish Independent yesterday as a separate report from Ulster Bank showed activity in the construction sector was shrinking rapidly.
The vast majority of the prime investment assets are likely to be purchased by overseas buyers, Mr Hollis said.
Commercial rents will continue to fall, especially in secondary areas, but prices may rise by single digits, Mr Hollis forecast. There will be many more transactions as business owners move to small offices.
"The outcome for the commercial property market is largely dependent on the direction the wider economy takes over the course of the next 12 months," Mr Hollis said.
"However, I am confident that a firm line has now been drawn on the sand and 2011 should see the Irish commercial property sector starting to emerge from the most significant and unprecedented crash it has ever experienced."
The forecasts came as the Ulster Bank Construction Purchasing Managers' Index showed that construction activity declined at a faster rate in November than the previous month.
The index posted its third consecutive monthly decline, taking it back to its lowest level since May. New business and employment in the sector also fell at a faster rate, while business sentiment was negative for the first time since last December. The seasonally adjusted index activity fell for the third month running to 41.7 in November, from 42.3 in October.
"The November reading of the Ulster Bank Construction PMI signals a further deterioration in conditions facing Irish construction firms," said Ulster Bank economist Simon Barry.
Declining levels of new business remains a critical issue, as tentative signs of stabilisation in the summer have given way to renewed weakness in new orders. The decline in workloads continues to put downward pressure on staffing levels, with the survey showing the pace of job shedding accelerated to its fastest pace since May.
Business sentiment was negative for the first time in 11 months, with sentiment the weakest since May 2009.
- Thomas Molloy
Tuesday, November 16, 2010
Friday, November 5, 2010
Clothing retailer DV8 opened its doors in Clonmel today.
Situated in The Ormonde Centre (Former Tesco) on Gladstone St, the shop has been thronged since this morning.
Manager Brian, says that he has never seen an opening morning like it and it is on target to being their most successful opening to date.
Occupying 5,000sq ft, securing DV8 was a great boost for the town centre.
Wishing them every future success.
Wednesday, November 3, 2010
Yesterday, November 2nd, we offered a Residential holding at Cloughabreeda, Cahir for sale.
The sale took place by Public Auction at our offices.
10 potential purchasers attended, with 3 bidders involved.
After an opening bid of €250,000, the property increased in increments to €330,000, when a temporary break was taken for consultation with the Vendors.
On our return, bidding resumed and when it reached €350,000, the property was placed “On the Market”.
Two more bids saw the offer climb to €360,000, at which price it was sold.
This was a good result for a property which had generated lots of pre-sale interest.
We wish the purchasers the best of luck.
Monday, November 1, 2010
Some of the findings of the IAVI Q3 Residential Survey:
- Sales activity in the residential property market continues to increase across Ireland, with IAVI members reporting an increase in Quarter 3 in the net balance* of instructions (+31%), number of properties for sale (+31%), viewings (+17%), enquiries (+16%), offers (+13%), sales agreed (+16%) and sales closed (+15%).
- However, the increases in sales activity in Q3 were at a more moderate pace relative to Q2 and Q1. This was due to buyer uncertainty around possible taxation changes in the upcoming Budget and NAMA.
- In relation to the ability of buyers to access mortgage finance over the past quarter, 61% of respondents in Dublin, 62% of respondents in Munster and 62% in Connaught/Donegal thought that it had worsened. In Leinster, 49% of respondents said that it has remained the same.
- In relation to trends in residential property values in Q3, 43% of respondents reported either ‘no change’ or marginal declines of up to 2.5%. 29% of respondents reported average declines of 2.6-5% and 19% reported declines of 5.1-10%. Declines of over 10% were reported by 6% of respondents. Increases were reported by 3% of respondents.
- In all regions, the majority of respondents reported that the typical profile of buyers were first time buyers.
- The average time it takes to sell a property remained static in Dublin (15 weeks), increased by two weeks in Leinster (23 weeks), decreased by three weeks in Munster (25 weeks) and decreased by three weeks in Connaught/Donegal (31 weeks).
You can download the full report here and the press release here IAVI Survey shows continued increases in sales activity nationwide
* The net balance refers to the proportion of members reporting a rise in activity less those reporting a fall. This approach is commonly used in surveys of this nature including the RICS Housing Market Survey.
Wednesday, October 13, 2010
Friday, September 24, 2010
Photostation, with outlets in Thurles and Nenagh already, took the former Only unit, beside Abrakebabra.
Julia's European Market took the former Chess clothing unit in Market Place, opposite Elvery's.
Catherine Nail Collection took the former Culleton unit in Market Place, also close to Elvery's.
Best of luck to them all in their new ventures.
In another boost for Clonmel town centre, DV8, the large Northern Ireland fashion chain, have secured a unit in the Ormonde Centre, Gladstone St, Clonmel.
They will occupy approx. 5,000 sq ft of the former Tesco unit, close to other strong retailers such as Easons, Boots, McDonalds, Specsavers and many more.
DV8 launched its first high street store in 1994 offering a ground-breaking range of branded and own brand clothing, footwear and accessories for men and women. Since then they have grown to become one of the top independent fashion retailers, both online and on the high street, known for some of the best fashion brands.
Clonmel will be their 26th store and the first in the Republic. They hope to open a further 6-8 stores across Ireland over the next 12 months.
Pat Quirke says that a number of lettings over the last 2 months have signalled a resurgence of the town centre, with River Island, PhotoStation and a variety of other retailers voting with their pockets and opening outlets.
The launch of a PPP process for construction of a town-centre multi-storey car-park will also be a massive boost to Clonmel.
Thursday, September 23, 2010
CASH-strapped developers who rent out newly built apartments and houses are forfeiting the chance to ever sell the properties as "new" units with stamp duty exemptions, the Irish Independent has learned.
As developers battle to make loan repayments, renting out completed projects that aren't selling has become an increasingly popular option, with Bernard McNamara recently offering several units in his landmark Elm Park development on 12-month leases.
However, when these ex-rental properties are eventually sold, they'll be considered "second-hand", meaning stamp duty will be payable by everyone bar first-time buyers.
See the full article here.
Monday, July 26, 2010
This is the first serious challenge to teh NAMA legislation, the only pity is that we have to wait until October for a hearing...like our politicians, the judiciary are on holidays also.
As the third tranche of transfers is prepared for later this year, more challenges may come forward from developers who have little to lose.
This has been coming down the tracks for some time now and appears likely to be introduced in some format.
I think Water charges will be first.
I have no problem with this...if every house was metered, the minimum charge was abolished, Council leaks were repaired and we all only paid for what we actually used.
At present, the broad-brush Minimum charge gives no incentive to save water.
Without meters, I fear the introduction of a Flat Tax which again, will do nothing to reward the careful consumer.
So charge away for what we use, but meter first.
Friday, July 23, 2010
The IAVI Q2 residential survey results were published this morning.
The main findings are:
• Continued improvement in activity levels nationwide, albeit at a more moderate pace compared to quarter one
• Increase in the volume of ‘sales closed’ nationwide in quarter two with the net balance increasing to +27% from +17% in quarter one
- In Munster, the net balance of respondents reporting ‘sales closed’ increased to +31% from +19% in Q1
• Moderate declines in average residential property values in quarter two
• Vendors’ price expectations ‘more realistic’ since beginning of 2010
You can read the press release or download the full Report