Jump to content
House Price Crash Forum
Sign in to follow this  
Ballyk

Rates On Empty Homes - Deferred To 2011

Recommended Posts

I know this has been posted elsewhere, but the planned introduction of rates on empty homes in NI hasn't been much discussed here, and could have a big downward impact on house prices.

* The executive planned to introduce rates on empty houses early next year, but is now deferring this to 2011;

* This will effect 20,000 empty houses in NI (and rising?).

There are lots of questions arising from this - I'd be very interested in hearing what others think, especially -

* What impact do you think this will have on house prices and rental levels?

* With the house sales and rental market already so flooded, will they actually have the political bottle to introduce this? (Given that the initial idea was to get more property onto the market)

* Will NI be the only UK region to have this empty house tax? Do they have it in ROI?

* I recall an empty commercial business tax leading to offices being knocked down in GB - do you think this will happen to residential property in NI?

There was an article on the BBC website yesterday Empty Home Rates Plan Postponed -

Plans to levy rates on empty houses in Northern Ireland have been postponed, the finance minister has said. The scheme was due to be introduced from April next year but is now planned to take effect in 2011. There are more than 20,000 empty homes across Northern Ireland, which some estimates say could bring in up to an extra £8m in rates. The minister, Sammy Wilson, said the move would be "unfair" at this time due to the state of the property market.

'Doldrums'

He said: "In principle, the rating of empty homes can bring many benefits under the right circumstances, encouraging property onto the market.

"However, the property market remains in the doldrums and at this time I think it would be unfair to introduce this measure when increasingly the owners of empty properties cannot find buyers or tenants." He added that by 2011 he expected the property market will have stabilised and the conditions for introducing the measure will be "much healthier". Mr Wilson also said he would postpone the revaluation of rates on non-domestic properties.

"I believe that in normal times a general revaluation is a good thing for business, it reduces the burden for sectors and areas that have not fared so well since it was last done, and increases rate bills for those who are more successful," he said. "These are not normal times however, and taking all the factors into consideration I have therefore decided it is best to postpone the exercise until April 2011."

Share this post


Link to post
Share on other sites
The minister, Sammy Wilson, said the move would be "unfair" at this time due to the state of the property market.

, the property market remains in the doldrums and at this time I think it would be unfair to introduce this measure when increasingly the owners of empty properties cannot find buyers or tenants."

So it would be unfair to those who can't accept the property market has crashed to make them pay rates...but it's not unfair to make the rest of us make up the shortfall. Strange.

Share this post


Link to post
Share on other sites

Good to hear your thoughts. It seems to me -

* They ought to abandon empty home rates completely.

* It would have been a good policy in 2006 for getting property onto the market and slowing down the bubble.

* But pointless now. Will only flood market on supply side and reduce demand. And force down rents.

* Leading to ruin for investors and even more negative equity...

Share this post


Link to post
Share on other sites
Good to hear your thoughts. It seems to me -

* They ought to abandon empty home rates completely.

* It would have been a good policy in 2006 for getting property onto the market and slowing down the bubble.

* But pointless now. Will only flood market on supply side and reduce demand. And force down rents.

* Leading to ruin for investors and even more negative equity...

Why's that a bad thing ?

Share this post


Link to post
Share on other sites

BAD, BAD, BAD!! When I heard this I nearly flipped!

Let's think about it. Ministers are currently on about trying to find an extra £370m in their budget. Here is an easy way of *part* funding that gap. Instead, no, they are not going to collect these rates but instead are *possibly* going to introduce water charges to make up the shortfall. I'm sorry, but this one doesn't make any sense to me :ph34r:

Share this post


Link to post
Share on other sites
Maybe the reason they cant find buyers is becasue they are asking too much!

No, no, house prices have bottomed out. The reason they aren't selling is that the banks won't lend people enough money to buy them. Don't you read the papers?

( ;) )

Share this post


Link to post
Share on other sites
Why's that a bad thing ?

Probably not such a bad thing in the short term if you're looking for a place to rent.

But what I suspect we'll see in the longer term is a deterioration in the rental housing stock in large parts of Belfast (predominantly owner-occoupied areas will be less affected) and the countryside. Rental properties will be seen as a liability.

Better to abandon or knock the property down than (a) have a tenant paying insufficient to cover costs of maintenance; or (B) having it empty. If I were an investor / landlord I would be in a big hurry to offload any Belfast property.

I enjoyed reading Paul Gosling's BT article about the NI market, in which he quoted RICS spokesman Tom McClelland (usually a great ramper of house prices). Mr McClelland pointed out that if the Dublin banks / NAMA put all their repossessed Belfast properties on the market, "the impact would be gothic". See here.

We all know how difficult it is to predict the future path of the NI housing market, but it's worth thinking about. The law of unintended consequences and all that.

Share this post


Link to post
Share on other sites
BAD, BAD, BAD!! When I heard this I nearly flipped!

Let's think about it. Ministers are currently on about trying to find an extra £370m in their budget. Here is an easy way of *part* funding that gap. Instead, no, they are not going to collect these rates but instead are *possibly* going to introduce water charges to make up the shortfall. I'm sorry, but this one doesn't make any sense to me :ph34r:

Exactly. Stormont is being run by a bunch of clowns. Now wonder i never bother voting.

Share this post


Link to post
Share on other sites

agree empty rates should definitely be introduced, now, and the fact that NI residents don't pay water rates is laughable, the same people who criticse NI Water for an aging supply, poor drainage and some dodgy sewage discharge methods in comparrisson to the rest of the rate paying UK should ask themselves..... why?

ther effect of water rates should also be fairly clear to any bear.

on this and many other issues, the NI exec needs to wake up (very quickly) to the cold hard reality that populist policies are no longer an option

Share this post


Link to post
Share on other sites
I know this has been posted elsewhere, but the planned introduction of rates on empty homes in NI hasn't been much discussed here, and could have a big downward impact on house prices.

* The executive planned to introduce rates on empty houses early next year, but is now deferring this to 2011;

* This will effect 20,000 empty houses in NI (and rising?).

There are lots of questions arising from this - I'd be very interested in hearing what others think, especially -

* What impact do you think this will have on house prices and rental levels?

* With the house sales and rental market already so flooded, will they actually have the political bottle to introduce this? (Given that the initial idea was to get more property onto the market)

* Will NI be the only UK region to have this empty house tax? Do they have it in ROI?

* I recall an empty commercial business tax leading to offices being knocked down in GB - do you think this will happen to residential property in NI?

There was an article on the BBC website yesterday Empty Home Rates Plan Postponed -

Plans to levy rates on empty houses in Northern Ireland have been postponed, the finance minister has said. The scheme was due to be introduced from April next year but is now planned to take effect in 2011. There are more than 20,000 empty homes across Northern Ireland, which some estimates say could bring in up to an extra £8m in rates. The minister, Sammy Wilson, said the move would be "unfair" at this time due to the state of the property market.

'Doldrums'

He said: "In principle, the rating of empty homes can bring many benefits under the right circumstances, encouraging property onto the market.

"However, the property market remains in the doldrums and at this time I think it would be unfair to introduce this measure when increasingly the owners of empty properties cannot find buyers or tenants." He added that by 2011 he expected the property market will have stabilised and the conditions for introducing the measure will be "much healthier". Mr Wilson also said he would postpone the revaluation of rates on non-domestic properties.

"I believe that in normal times a general revaluation is a good thing for business, it reduces the burden for sectors and areas that have not fared so well since it was last done, and increases rate bills for those who are more successful," he said. "These are not normal times however, and taking all the factors into consideration I have therefore decided it is best to postpone the exercise until April 2011."

In Mainland UK, you are exempt from Council Tax for 6 months, then you pay 50% of the full rate. This is six months per property, so if you buy an empty place, you may find that some or all of it has already been used up.

Share this post


Link to post
Share on other sites
agree empty rates should definitely be introduced, now, and the fact that NI residents don't pay water rates is laughable, the same people who criticse NI Water for an aging supply, poor drainage and some dodgy sewage discharge methods in comparrisson to the rest of the rate paying UK should ask themselves..... why?

ther effect of water rates should also be fairly clear to any bear.

on this and many other issues, the NI exec needs to wake up (very quickly) to the cold hard reality that populist policies are no longer an option

I think you missed the reason why people are unhappy about it. People were lead to believe (rightly or wrongly) that rates covered communal services, we have never had 'council tax'. Noone told us that water was centrally funded and that the rest of the UK had already added this charge in, and done it separately to allow charging by volume. The way it was done was wrong, but I have no disagreement that services have to be charged for, nothing is free. They simply didn't take into account that it is the people that will be paying and its need to be broken gently and explained properly. Charging by volume is very sensible in this day and age of limited resources, but to add a fixed charge by a separate body is a complete waste of tax payer money, it would be much easier to gradually increase the rates.

Anyway, the deferment is a bad thing and just another way for tax payers to fund bad businesses indirectly, rather than water. I know which I would rather have. However personally I would have a land tax for land intended for housing, this idea of knocking down to avoid a few hundred pounds is just cutting nose off to spite face kind of thing.

BTW there is already a lower rate for LLs, designed to discourage false declarations of emptiness during voids.

Share this post


Link to post
Share on other sites

What do rates pay for? Is it appropriate to charge them to empty houses?

In any case, if it had been decided that payment is appropriate, deferring the introduction to suit BTLers/specuvestors at the expense of first time buyers is totally unfair ldo.

Share this post


Link to post
Share on other sites
What do rates pay for? Is it appropriate to charge them to empty houses?

In any case, if it had been decided that payment is appropriate, deferring the introduction to suit BTLers/specuvestors at the expense of first time buyers is totally unfair ldo.

Part of the problem with the various methods of government tax is the dishonesty in how they are labelled. Water charges for example - surely if they were really for water we would be supplied with meters so that we could reduce our bills? It's just another stealth tax. The idea that rates pay for services is nonsense as well - as far as I know everything goes into the one pot and is divided out. Better just to be honest and have one tax, call it land value tax (not property tax - too emotive) and be honest about why it is there and why it is fairer and less damaging to economic activity than all other taxes.

Share this post


Link to post
Share on other sites
Part of the problem with the various methods of government tax is the dishonesty in how they are labelled. Water charges for example - surely if they were really for water we would be supplied with meters so that we could reduce our bills? It's just another stealth tax. The idea that rates pay for services is nonsense as well - as far as I know everything goes into the one pot and is divided out. Better just to be honest and have one tax, call it land value tax (not property tax - too emotive) and be honest about why it is there and why it is fairer and less damaging to economic activity than all other taxes.

Why not just pay 50% income tax and get it over with , everything else it just a very expensive way to sugar coat the bitter pill.

Share this post


Link to post
Share on other sites
Why not just pay 50% income tax and get it over with , everything else it just a very expensive way to sugar coat the bitter pill.

Income tax is a drag on economic activity and taxes 'earned' wealth and is avoidable whereas LVT taxes unearned wealth and is unavoidable. It would replace all other taxes and decimate the red tape, form-filling and legions of public bodies associated with the current tax system. Distribute 100% of it as a citizen's income and make public services pay as you go and you get rid of the entire benefits system while also allowing the taxpayer to distribute their own tax money as they need, rather than civil servants inevitably making bad decisions as to where it is needed.

Edited by shipbuilder

Share this post


Link to post
Share on other sites
Income tax is a drag on economic activity and taxes 'earned' wealth and is avoidable whereas LVT taxes unearned wealth and is unavoidable. It would replace all other taxes and decimate the red tape, form-filling and legions of public bodies associated with the current tax system. Distribute 100% of it as a citizen's income and make public services pay as you go and you get rid of the entire benefits system while also allowing the taxpayer to distribute their own tax money as they need, rather than civil servants inevitably making bad decisions as to where it is needed.

I have often thought that gov't should have a limit on the number of tax and benefit rules, or perhaps targets to reduce them. It would save a huge amount of money by simply reducing the number of rules say in half. Most of them don't achieve what they originally intend and noone bothers to clean up the mess left over, leaving everyone, including politicians, to pay experts to navigate the complex system. A complete waste of labour and resources, similar in lack in value as the rising house price fiasco.

Share this post


Link to post
Share on other sites
If only we had politicians with the balls or imagination to even suggest such (or any) radical policies.

I am an accountant, and I resent you trying to take away my livelihood. If the government made tax easy to understand I would be forced to do something else, like maybe become a property developer. ;)

In all honesty I have always thought that having a straight 30% tax rate regardless of income is the fairest way to sort tax out. You could remove National Insurance, increase the tax free element so that those earning less, pay less as a proportion of income. By removing the complexity you would save a fortune in useless civil servants to run HMRC, and probably end up with more disposable cash.

By the way higher earners can afford good accountants and end up paying less tax as a proportion of income than lower earners anyway.

Share this post


Link to post
Share on other sites
If only we had politicians with the balls or imagination to even suggest such (or any) radical policies.

Politicians are not all the unimaginative people we think they are, I do know 1 older chap who was in politics in the 70s here. He has a good grasp of the fundamentals and ideals we talk about, but I agree with his counter argument that it is the people that have a problem with change, and that is the biggest problem once you have identified a new direction.

As with most other problems in Engineering or repairs, you wait until the problem gets worse so that it becomes more obvious what the cause and solution is. However in some cases this mean solutions can be too late.

Share this post


Link to post
Share on other sites
Politicians are not all the unimaginative people we think they are, I do know 1 older chap who was in politics in the 70s here. He has a good grasp of the fundamentals and ideals we talk about, but I agree with his counter argument that it is the people that have a problem with change, and that is the biggest problem once you have identified a new direction.

As with most other problems in Engineering or repairs, you wait until the problem gets worse so that it becomes more obvious what the cause and solution is. However in some cases this mean solutions can be too late.

Of course people have a problem with change, but surely we pay politicians to make bold decisions and sell the changes to us? No effective change will ever be without huge resistance - it is the very essence of our leaders' job to sell the change, push forward with it effectively and then show the benefits.

It happens on a daily basis within business, so why do we let our politicians away with less? Even less excuse when our politicians effectively cannot be voted out of power.

Share this post


Link to post
Share on other sites
By the way higher earners can afford good accountants and end up paying less tax as a proportion of income than lower earners anyway.

Which is why a single property tax is vastly preferable to a single income tax, apart from the fact that income tax is a drag on economic effort. Plenty of ways to fudge incomes, but no way of hiding land, moving it offshore, transferring it to someone else or disguising what it is used for or where it is - no avoidance possible.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   291 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.