Don't like how Ireland taxes investments? Now's your chance to do something about it!

[martin2017]

@vescd Late to reply on this, but I’m curious what you think of my (probably unpopular) opinion regarding the CGT exemption.

Scrap the CGT threshold entirely (i.e. make it €0), and replace it with an ISA style system as mentioned in the OP above.

That way, you don’t have to withdraw €1269 every year to maximise your tax efficiency. Instead, you can fund the ISA account up to a certain amount (let’s say €10K) every year and let it grow and reap the benefits of compounding gains, without making any withdrawals.

When it comes time to withdraw, you can withdraw as much as you want without paying any tax on the gains.

 

[sweetlemon]

@gardenlady Northern Ireland resident here with a few words: STOCKS AND SHARES ISA. GET IT!

How people accept a 41% minimum tax on ETFs I do not know.

Ireland is the definition of an anti wealth creation state. No ISA, a laughable CGT allowance and tax relief pension contributions capped to a percentage based on your age. Talk about trapping your citizens into never having the potential to retire slightly early. All the while running a 12 billion surplus and blowing the money.

 

[silent_wife]

@sweetlemon Don’t worry, you’ll be on the same boat in a few years

 

[sweetlemon]

@silent_wife I'm from a very republican area in the north, right on the border. Years ago people here wouldn't have a second though in voting for a united Ireland. Now, though, as least anecdotally speaking, it would be harder to find those votes, even in this nationalist area. It's actually one to think about now rather than the done thing. People are comfortable here and a vote for a united Ireland could potentially be a vote to throw away their future families opportunity at a wealthier more secure life. They could argue that the tax policies in the republic are repressive and doctrinaire. I honestly think it will be harder for Sinn fein to acquire votes than people think, even from their current voter's now.

 

[trinityeze]

@sweetlemon Yeah the tax is ridiculous, they really don't want you to build wealth

 

[kurret]

@gardenlady If we have 100 people shouting for the same 4 things it will be 1000x more powerful than 10 people arguing for 20 things all in different variations.

i.e. we should come up with standardised points and all of us submit them separtely.,

 

[rosyy57]

@kurret Yes. This.

 

[zackwetzel]

@gardenlady A broader point, but I think that making investments more easily accessible and less complicated from a taxation point of view would take the pressure off the property market, given that’s the main investment space for Irish people

 

[shyamolishah1]

@zackwetzel Investments are seen as for the wealthy only and therefore the average voter doesn’t care if taxes on ETFs go up

 

[ktrianta]

@gardenlady Personal investment account tax free with up 20k maximum contributions like they have in UK. Remove discrimination for etfs, it’s insane difference.

 

[davem]

@gardenlady This could do with being posted in r/Ireland and as many other Irish subreddits as possible to be honest. Cheers for bringing it to my attention

 

[seangibbons]

@gardenlady We should have a flat 20% capital gains on all assets other than property which should remain at 33%.

We need to make property the least attractive investment in Ireland, not the most attractive which is how things are currently structured.

 

[resjudicata]

@seangibbons

We need to make property the least attractive investment in Ireland, not the most attractive which is how things are currently structured.

Is it though? Rental income is taxed extremely punitively (up to 52%) which makes market rent more expensive. If you're renting out your property, you'd expect a certain after-tax income and you'd advertise the rent based on that.

Of course, the rents won't come down if they removed that tax because no landlord would cut the rent once it's already in place. They should increase the rental tax credit though. 500 euros is peanuts.

 

[acuriousgirl]

@resjudicata Property is attractive because the value typically always goes up in Ireland and the rent is much higher than any dividend paying stocks. I know it's not as simple as that but stocks are much higher risk, a bad earnings call can wipe 20% off your investment before the market even opens, there's nothing close to that in property

 

[resjudicata]

@acuriousgirl That's only if you invest in individual companies instead of an index fund. That can be said of any single property too since a fire could break out and destroy your property. Or some event leading to your neighbourhood becoming unattractive.

Stocks appear more volatile because they're constantly traded so you always see the current price. If companies in a particular industry have all dropped by 20%, you still don't mind selling at a loss if that means you get to immediately invest in another more promising company in the same industry and at a similar discount. With housing, you can't sell your house today at a 20% discount and expect to immediately buy your neighbour's house at a 20% discount. Because your neighbour will hold out for a better price and in turn you're forced to hold out for a better price too if you expect to be able to buy your neighbour's house.

 

[1straightshooter]

@resjudicata Surely rental income is only taxed at 52% if your income is over €70k? It is taxed as an income

 

[resjudicata]

@1straightshooter I mean even below 70k, it's 48.5%. Not like it's insignificant.

You are either forced to sell your house and reinvest in a less punitively taxed asset or you charge a rent high enough that even after the punitive tax, you make a decent return.

If I am paying a 2000 euro rent, 1040 euros of that is going to the state, remaining 960 to my landlord. That's 12480 euros per year of extra taxes I am paying. And they "generously" give me a 500 euro rental tax credit after taking over 12 grand from me.

 

[1straightshooter]

@resjudicata So this would be BTL landlords? I would also point out that tenants are paying their mortgage, giving them a large asset at no cost to the landlord. If not BTL, it's simply free money. Do you think rental income should not be taxed as an income?

 

[resjudicata]

@1straightshooter The net effect is landlords simply increase the rent to offset the taxes. In the end it's still the tenant paying that tax.

 

[1straightshooter]

@resjudicata Do you think rents would halve if tax on landlords was set to zero?