Section 23: Reprieve for investors but what about homeowners?

Section 23: Reprieve for investors but what about homeowners?

Section 23: Reprieve for Investors but what about homeowners?IPOA members and thousands of other investors breathed a sigh of relief during the week on hearing the news that proposals to phase out Section 23 of the finance bill have been put on hold until at least 2012.

In December’s Budget, Minister for Finance Brian Lenihan announced that property-based reliefs were to be phased out which included the controversial Section 23 tax relief on rented residential property in tax-designated areas. This would mean that for those who bought investment properties during the boom time would now only be able to offset rental income from the Section 23 properties and no other, previous to this you could offset from any rental income in the State.

The Chairman of the IPOA, Stephen Faughnan welcomed the reprieve saying “We cannot allow investors to be treated like ‘Lambs to the Slaughter’ on this…Investors paid dearly for properties in the clear expectation that incentives encouraged by the Government could be trusted to run their course.”

However there has been little or no sympathy from many householders who were “suckered into 100% mortgages at extortionate rates”, have also had their reliefs taken from them and are now also facing big financial burdens if they can’t keep up with their repayments or if interest rates begin to rise. “Even if landlords only own one or two extra properties they are among those culpable for what went wrong with the banks in our greedy decade.”

Have Your Say:

  • Section 23: Reprieve for Investors but what about homeowners?
There are 16 comments for this article
  1. Sandra Connell at 3:24 pm

    Drop the greeed lark, some were but others were not into sec 23 for greed. As for gambling, no , if the gov wants to regenerate areas and buyers buy into the deal on the strict understanding of tax relief already paid for, how is that gambling?

  2. Oscar Stewart at 3:54 pm

    The state have let us down many a time, so get used to it. The promise they made was a mistake and they have no choice but to alter it. Homeowners are the priority, plain and simple. If it’s not litigation claims from the investors, it’ll be other problems with homeowners, including unpaid mortgages and debts that will never be reconciled. The average person only earns so much, only has so much and so can only pay so much. High mortgages are a waste of time in this era and only scratch the barrels bottom.

  3. Kieran at 4:53 pm

    People were encourged to create their own pension scheme. So some bought theese prperties in an effort to have rent as a pension when they retired. In this case I do not think you can justify removing S23. I think the small private prerson with one or two can hardly be decribed as greedy and should be left out of this.

  4. Brendan Allen at 8:50 pm

    The Budget proposals will hit all home owners. The section properties, if they are put to the market will bring down all house prices. The relief was withdrawn some years ago. It is finsihing out of existing relief that is being curtailed.

    These properties were purchased with the tax relief built into the price, it is unfair to the curtail during its cycle.

    The termination will result in a forced sale and therefore downward pressure on ALL house prices.

  5. pauline reid at 12:12 am

    Oh for God sake not everyone was greedy buying a second property to rent have some empathy for those that were lured into the trap of buying when they did – not in the position myself but nearly was do you really think they would have gone there had they known, wasters the lot of them don’t want to vote any of them in why do we need parties and not total individuals for each department eg (accountant for finance etc) and be voted out EVERY year if not living up to the job – Bah!

  6. Kevin at 9:49 pm

    So they won’t be phasing out the Section 23 tax relief because “Investors paid dearly for properties in the clear expectation that incentives encouraged by the Government could be trusted to run their course.”

    But was there any time frame listed for these incentives ? If not, then how is it any different to any of the hundreds of thousands of people who buy things or make decisions based on current tax law, only to find that if they had bought earlier/waited, they’d have been better off. Applying this logic, no tax rates would ever be changed as people have made purchase or investments based on things as they are now.

  7. ijkswipwd doopews at 7:59 pm

    what the fu*k are u all on about? like yeah so what if we gambeled with our futures who didn’t so just stop going on like its some1 elses fault how could we see what was going to happen and it didn’t start in Ireland i can tell u that for a fact it was those fu*king greedy fu*king fat w*nkers and ba*tards that started that started they got to fu*king greedy they should be strunge out and up to dry for the sh*te that they had put us through if any1 has anything else to ad to this comment please do so thanks talk to u later bye.

  8. Ouch at 4:58 pm

    The Fact is we are all in trouble. Anyone that bought a house in the last 7 years like myself, whether you have a 100k mortgage or a 300k mortgage. The rates are going up and look like there are going to continue going up – how else are the banks going to get money back from us to make up for losses. Brace yourself because i think the worst is yet to come………… negatitave amen’t i..

  9. Reply to Annoyed at 4:14 pm

    You really haven’t got a clue and are blinded by your own jealousy it sounds. Read the facts before you make silly comments about Section 23 buyers. This was a Government Led Scheme which the buyers paid dearly for. They got their regeneration and then they tried to pull the plug and not keep their side of the contract. Typical Fine Fail and Labour are the same but they won’t get away with it. There will be a High Court Challenge and that will put a stop to all this nonsense. Bring it on!!!

  10. reeves at 3:25 pm

    “Reprieve for Homeowners,” as opposed to investors, will only happen when the people get smart and get government completely out of the private sector’s businesses, including private proerty ownership, and the free enterprise transactions that make that happen. Socialism/communism/fascism (all bedfellows) never works for the people, only the rulers of the people, and we should all know that by now. To create an economy that works in favor of the poeple (the “little guy”), government cannot be an active participant. The fierce competition that emmanates from the private sector in the form of free enterprise capitalism drives prices down and quality up. Government interference only tends to bend towards ‘special interest’ groups — those with the best connections to the governing powers. In a socialist economy, the average consumer is left to pick up the scraps and suffer from whatever price and quality happens to result.

  11. Alastair White at 3:19 pm

    Section 23 investors took a gamble to make a profit and did not buy property for health reasons-if section 23 are to be given preference then all homeowners in Negative equity should be given tax relief
    If you invest you take a chance stop moaning

  12. Annoyed at 2:58 pm

    I don’t think that Section 23 investors should be protected by the Government given that it was speculative property investment and not purchasing out of necessity i.e a home. This greed to make money from other people renting your property portfolio fuelled the property bubble and made genuine buyers pay more for properties who were competing against those that were using collatoral from one property to the next to increase profit. The banks, property investors, bond holders gambled on an open market, and lost, the majority of the man in the street in Ireland did not, and yet we have to pay for their mistakes. If I hear another banker or politician say we are all to blame I will explode, what did the majority of Irish people do wrong (I didn’t buy a second property, we are still raising a family of 3 children, paid our taxes, claimed nothing from the state until I was made redundant) and yet we are supposed to feel guilty about something, sorry but I think those that gamble with their finances should pay the price themselves if they lose, not financially cripple those who had nothing to do with it for generations.

  13. Marie at 2:35 pm

    POXY FINE FAIL WHO ARE COMPLETE LIARS AND CHEATS ARE REDSPONSIBLE NOT SMALL TIME INVESTORS WHO TRIED TO MAKE A DIFFERENCE TO RUN DOWN AREAS AND AT THE SAME TIME INVESTOR FOR THEIR PENSION AND THEIR CHILDRENS INHERITANCE. I bought my S23 property in good faith, to avail of the tax relief available. This was a government led scheme, to encourage investors to buy in areas throughout the country in need of regeneration thereby creating essential jobs and accommodation. I also paid a premium for this property because of the built in tax relief.

    The government has greatly benefitted from this scheme by having large areas throughout Dublin Inner City and the country developed and paid for by the investor. The government has also received significant tax revenues from the sale of these property’s such as vat and stamp duty at an inflated rate due to the premium prices paid for S23 properties. In addition, large amounts of corporation tax, paye and prsi would have been paid by the developer.

    In recent years the government has also imposed substantial changes to the taxes to be paid by the small S23 investor such as
    1.The reduction in deductibility of interest to 75%
    2.Second homes tax – i.e. investment or holiday homes
    3.Income levy – (now universal change)
    4.PRTB (private rental tenancy board €95) per letting

    I am already in negative equity as my loan is greater than the present value of my property owing to the reduction in property prices and the increasing fall in rents, I am finding it very difficult to maintain the property and am struggling to pay the service charges which equate to approximately two months’ rent and to pay any necessary repairs. Realistically I am unable to pay both my bank and my tax liabilities and this could lead to my going bankrupt and having to go on the dole along with all the other small time investors involved in S 23. The likes of that twit Joan Burton only tries to aggravate the situation by implying S23 Investors are getting something we are not entitled to – she makes me sick!!!

  14. AV Watt at 2:03 pm

    Property buyers who bought at the peak do not deserve any more sympathy or tax payer support than a gambler who bet the farm playing poker, and lost. Not one was forced to buy, there were always thousands of houses available to rent at prices which declined most years since 2000.

    Why should I, a tax payer who had to listen to the boasting of “property portfolio” owners now pay for their stupidly and “keeping up with the neighbours” greed. Any one of them could have done what I did which was to sell in 2006 and rent since then, but then greed does blind people to reality.

    We have to drive property prices back to a realistic level appropriate to a small country with a massive dept, this will lower cost of living and wage costs thereby helping kick-start the recovery of our critical export industry and tourism sectors.

    A land does not prosper from hundreds of ugly badly located housing developments but from hard work and exports.

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  16. Stephen at 1:35 pm

    Of course homeowners should be the priority of any current or future government over investors who took a punt on property.

    However if the state goes back on the promise they made in relation to section 23 properties then they are effectively breaking a promise. Not only is this morally wrong but it also leaves the State open to costly litigation claims.

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