Irish Financial Review

No reason property tax bills should spike like property prices

Could you handle your property tax bill doubling?

When property taxes were introduced in Ireland in mid-2013, property prices had fallen by over 50% from the pre-bust highs. The worst recession since the Great Depression was raging and almost 100,000 mortgage holders were in arrears on their mortgage repayments.

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Michael Noonan delayed reassment in 2015 but will his replacement as Minister for Finance, Paschal Donohoe do the same

Property taxes were assessed on the prevailing market prices and in 2015, the then Minister for Finance, Mr. Michael Noonan decided to delay any reassessment of taxes until 2019 which meant that homeowners would not face a rise in property tax as a result of rising property prices.

But 2019 is now less than 18 months away and homeowners across the country may be wondering what their future property tax bill might cost them.

Since property prices are linked directly to the value of a particular property, rising property prices impact the taxable amount homeowners are liable for. Across Ireland and due to the shortage of property available for sale, property prices have been pushed up as a result. In fact, property prices have risen by 50%, 60% and a lot more since 2013 in some places.

Prices have risen sharply in recent months with the relaxation of deposit rules for first time buyers, which were cut from 20% of the property price to 10%. With first time buyers the largest segment of the property market, their access to credit was made easier with lower deposit requirements.

Whether or not property tax should increase in line with property prices is a hotly debated issue globally. For homeowners, the tax can become a runaway cost that has no correlation to actual take-home pay. Additionally, if the cost of local services is effectively managed, the case for rising tax bills should be made to property owners first. After all, it should not cost 50% or 100% more to deliver local services just because property prices were pushed up due to a temporary shortage of property.

A few options for Government may be:

  1. It chooses to push the issue of reassessment out into the future keeping tax bills the same as they are currently.
  2. It goes ahead with a reassessment of property values but reduces the taxable rate of .18% where it could engineer little or no rise in property tax bills.
  3. It goes full steam ahead with the reassessment and leaves the taxable rate unchanged resulting in a rise in property tax bills.

With the clock ticking towards 2019, property owners will be right to wonder how their household finances could be impacted by the final decision of Government on the issue.

Managing back-to-school expenses wisely

By Frank Conway – MoneyWhizz.org

Back-to-school expenses can place an excessive financial burden on families. So, it is important families are prepared; to budget effectively and where necessary, borrow prudently in the run-up to the back-to-school expenses rush.

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With the right level of planning, back to school expenses can be managed and minimized

Following are some simple tips to help families prepare:

Budgeting

  1. Set your money target – work out how much is needed to cover costs
  2. Review your income – regardless of whether one is employed or self-employed, they must know their the financial bottom line especially their net take-home pay each month (plus any additional money received).
  3. Identify all expenses – this includes all costs, fixed (mortgage, car payment etc) and variable (groceries, entertainment etc).
  4. Set your timeline – if the target is to save €1,200 over the course of a full year (this is slightly more than parents pay in back-to-school costs) this works out at €100 per month.
  5. Stick to the plan – but be flexible. The best way of reaching a money goal is to build in flexibility. No month will ever be the same. Strive to save more than the target amount during months where cash is available as there will also be months where cash will be tight. Over time, it should all balance out.

Borrowing

Some  parents have little choice but to use borrowings to pay for back to school costs, the following are some useful tips to help them borrow effectively.

  1. Credit cards – make the maximum payment, not the minimum. This way, users have the greatest chance of paying the least amount in interest charges and fees – which can add a significant financial cost otherwise.
  2. Short-term – longer term loans may offer the convenience of lower monthly repayments but they also cost much more in interest charges which increase the overall cost to the borrower.
  3. Check the APR, not the rate – the Annual Percentage Rate is the absolute measure of the cost of money and the best measure of the true cost of borrowing.
  4. Avoid late payment charges – those can really add up and make loan repayments crippling.
  5. Say no to money lenders – some charge up to 200% interest rates which cost borrowers significantly more over time.

With sufficient planning and the right amount of money knowledge, back-to-school expenses can be minimized ensuring parents have peace of mind.

 

PayPal to offer debit cards

PayPal and Visa have announced an extension of their strategic partnership to Europe.

 

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A growing number of fintech companies are targeting consumers for day-to-day banking services.

PayPal, under its banking license in Europe, will join the Visa network allowing consumers to pay directly with their ewallet funds wherever Visa is accepted. The European partnership will also make it easier for financial institutions who accept PayPal payments to offer Visa checkout options too.

Businesses who accept either payment method will be able to offer both, allowing the two companies to grow exponentially on the European market.

Most importantly, PayPal will have the ability to issue debit cards to European consumers and businesses. In the future, this would make it possible for PayPal customers to use their ewallet funds wherever Visa is accepted worldwide. Furthermore, clients will be able to transfer funds to their debit accounts in real time across multiple markets.

Across Europe, a growing number of non-bank services and financial technology (fintech) firms are eyeing up lucrative market opportunities in the personal financial sector, including Facebook, Samsung and Apple.

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