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First Time buyer - Questions

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Hi Guys,

I am new to this forum and there is lot of information in the forum regards to property buying in NI

As a first time buyer i have few q's and any inputs of the below would be really helpful and appreciated

The to buy sale price value when compared to the Capital value non exempt on the lps site for most of the properties is a difference +20% 

what should be the range of difference between  sale price and capital value non exempt price for us to make a offer ie what extent should the max difference be so that it is reasonable and can make an offer?

for some prop the sale price = captal value non exempt price + 20-50%

also say if you buy a new build and a while later when its updated on the lps if the value is minus 20-30% of the buying price , should that be a worry. how does this work

Kindly please suggest

 

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Hi - welcome to the party. 

I don't understand your question, apart from the last bit.

Do you understand negative equity? I would say if yes, there's your answer.

 

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Are you comparing the current sales price with the LPS estimated Rates value?

If so I would be careful. The Rates value was an estimate of the value of the property and back dated to 1 Jan 2005 (I think thats the date). LPS employed 100's of people to do this, many without any experience with the result many properties are over valued and many are undervalued.

No body really takes much notice of it. If it has been undervalued you pay lower rates.

Edited by BelfastVI

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1 hour ago, BelfastVI said:

Are you comparing the current sales price with the LPS estimated Rates value?

If so I would be careful. The Rates value was an estimate of the value of the property and back dated to 1 Jan 2005 (I think thats the date). LPS employed 100's of people to do this, many without any experience with the result many properties are over valued and many are undervalued.

No body really takes much notice of it. If it has been undervalued you pay lower rates.

Or like me. You live in BT9, pay high rates and still manage to get subsidised by people living in say Coleraine. 

Edited by 2buyornot2buy

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6 hours ago, BelfastVI said:

Are you comparing the current sales price with the LPS estimated Rates value?

If so I would be careful. The Rates value was an estimate of the value of the property and back dated to 1 Jan 2005 (I think thats the date). LPS employed 100's of people to do this, many without any experience with the result many properties are over valued and many are undervalued.

No body really takes much notice of it. If it has been undervalued you pay lower rates.

yes, i was under the impression that the LPS value is a rough estimate of the property current value on the market

so nothing much to compare in such a case then with the lps webiste, Thanks for the replies guys

 

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On 18/09/2017 at 2:04 PM, 2buyornot2buy said:

Or like me. You live in BT9, pay high rates and still manage to get subsidised by people living in say Coleraine. 

What do you mean. Are you referring to the aprox £2,500 cap

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59 minutes ago, BelfastVI said:

How are you getting subsidised by someone paying less for the same services?

You realise there's a cap right? And the amount to be collected is fixed during the budget? Ergo anyone over the cap is subsidised by anyone under.  

 

100k house = £750 rates bill

200k house = £1500 rates bill

400k house = £3000 rates bill

800k house = £3000 rates bill

Economics for beginners. Spot the subsidy. 

 

 

 

 

 

Edited by 2buyornot2buy

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7 minutes ago, 2buyornot2buy said:

You realise there's a cap right? 

Yes, that's what we are discussing. If you are at the Cap you are paying the highest rates in NI for the same services that everyone else is getting. Many of whom will be paying a lot less than you.

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57 minutes ago, BelfastVI said:

Yes, that's what we are discussing. If you are at the Cap you are paying the highest rates in NI for the same services that everyone else is getting. Many of whom will be paying a lot less than you.

 

Did you miss the rest of my post? I edited it soon after posting.  

Edited by 2buyornot2buy

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Social welfare for rich people. A shamefully regressive form of taxation where the poor subsidise the rich. 

Perhaps direct rule will correct this anomaly.

 

Or maybe income tax will be capped, because we can't have the high earners paying more for those same services as everyone else?

Edited by yadayada

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19 hours ago, 2buyornot2buy said:

 

Did you miss the rest of my post? I edited it soon after posting.  

Sorry you edit wasn't up when I posted.

The owner of the £100k house is getting the same services, street lighting, bin collected etc as the person in the £800k house. Yet the owner of the £800k house is paying many times more.

Could you imagine having to pay more for other items such as your food, electricity etc based on the value of your house.

I am not complaining about the rates system, thats the way it has been set up. It is similar in England with their council tax. However I think they make allowances for the number of people in a house.

 

 

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It's a wealth tax, and as is often said, one that can't be evaded since mansions cannot be smuggled out to the Cayman Islands or similar.

Youre in favour of a cap on income tax?

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13 minutes ago, yadayada said:

It's a wealth tax, and as is often said, one that can't be evaded since mansions cannot be smuggled out to the Cayman Islands or similar.

Youre in favour of a cap on income tax?

That's exactly it. 

We don't operate a pay as you use tax system. Rates pay for a wide variety of services. It's not just council services. 

There's no cap on tax on earned income. Why should there be one on unearned income. 

The cap acts as a subsidy. 

 

 

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22 hours ago, yadayada said:

It's a wealth tax, and as is often said, one that can't be evaded since mansions cannot be smuggled out to the Cayman Islands or similar.

Youre in favour of a cap on income tax?

Dont see rates as a wealth tax.

Happy with income tax to exclude those most in need and then step up. I don't think there is a cap on income tax.

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22 hours ago, 2buyornot2buy said:

That's exactly it. 

We don't operate a pay as you use tax system. Rates pay for a wide variety of services. It's not just council services. 

There's no cap on tax on earned income. Why should there be one on unearned income. 

The cap acts as a subsidy. 

 

 

if you earn income from your property i.e rent it out you are taxed on that apart from that one bedroom thing

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16 minutes ago, BelfastVI said:

Dont see rates as a wealth tax.

Happy with income tax to exclude those most in need and then step up. I don't think there is a cap on income tax.

There isn't. So you're happy with one taxation cap and not another. 

Can you understand how a cap results in household with lower rateable value below the cap subsidising those with higher values above it? 

 

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18 minutes ago, BelfastVI said:

Dont see rates as a wealth tax.

Happy with income tax to exclude those most in need and then step up. I don't think there is a cap on income tax.

It's a pseudowealth tax. It's based on the value of an asset. It's also more a wealth tax than say council tax as in NI the owner is responsible for payment. 

 

 

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its not really a wealth tax as there are very wealthy people living in modest houses and some normal people, retired teachers etc who's family home has boomed in value over the years through no fault of their own. The cap was put in place, as it is in England to avoid excessive rates charge due simply to the location of your property.

There is a lower threshold, where people under a certain income can obtain Rates relief or assistance (tax payer picks up part of bill). You could claim the rest of us are subsidising in that situation too but that would be simply unfair. equally there is a cap at the top end to avoid the over charging of rates due to location. This cap can be adjusted from time to time.

 

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1 hour ago, BelfastVI said:

its not really a wealth tax as there are very wealthy people living in modest houses and some normal people, retired teachers etc who's family home has boomed in value over the years through no fault of their own. The cap was put in place, as it is in England to avoid excessive rates charge due simply to the location of your property.

There is a lower threshold, where people under a certain income can obtain Rates relief or assistance (tax payer picks up part of bill). You could claim the rest of us are subsidising in that situation too but that would be simply unfair. equally there is a cap at the top end to avoid the over charging of rates due to location. This cap can be adjusted from time to time.

 

Pointless. You're not actually taking anything on board and I don't think you've grasped what a subsidy is. 

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2 hours ago, 2buyornot2buy said:

Pointless. You're not actually taking anything on board and I don't think you've grasped what a subsidy is. 

How did such a tax break ever make it to the statute books without any real protest? What sort of government have we? It's scandalous. 

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On 25/09/2017 at 3:20 PM, yadayada said:

How did such a tax break ever make it to the statute books without any real protest? What sort of government have we? It's scandalous. 

pointless argument as that's the way rates work. we pay tax on our income and on inheritance over a certain level (you could call that a tax break too).

we as taxpayers subsidies many things - social housing, education, public transport etc, etc and in general we all accept that.

Look at it this way. Two people on equal income (or retired for that matter) in two similar houses but different locations pay different amounts for the same council services. One paying say £600 and one paying the max. 

It is my view the person paying the max amount is subsiding the person paying £600. It is your view that the person paying the £600 is subsiding the person paying the max for the exact same service. 

we have a different view on this point and we will just have to leave it at that. 

 

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...because you've failed to understand the concept of a tax break and a subsidy being the same thing with a rates cap.

Close to here is a 5000 square foot mansion. Down the road from it is an 1800 sq foot 1970s bungalow. Thanks to the cap, the two owners pay the same amount. Someone is getting an easy ride. Which one? 

 

Edited by yadayada

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