Real Estate Alliance

Real Estate Alliance Estate Agents welcome the principle of a property tax

Wednesday 1st December 2010

Real Estate Alliance Estate Agents welcome the principle of a property tax

- Members say we need a National Property Policy that contributes to the Recovery.

- Real Estate Alliance AGM reflect on 2010 and focuses on The Next Steps for the Property Market

Real Estate Alliance held their AGM in Buswells Hotel in Dublin, on Friday, 26th November. The Group welcome the principle of a property tax as long as it means a reduction of stamp duty to average European levels which will make it easier for property trading. The appointment of Patrick Riney, Director of Orchard Real Estate Alliance in Rathfarnham as Chairperson of the national property group and Seamus Carthy of Carthy Real Estate Alliance of Roscommon as Vice-Chairperson were also ratified by the group.

The National Recovery Plan and Bailout were on everyone lips during the day as some of the country’s longest established estate agents agreed that none of the Political parties have a property policy. They talked about a need for a National Property Policy to contribute to the recovery. According to the incoming Chairman, Patrick Riney, "the impending proposals in the Recovery plan are very anti property. While the property market contributed to the recession, all the parties have been blinded to the contribution Property can make to the recovery. We agree, a fair tax on property allied with a reduction of stamp duty would help transactions. Every transaction helps recapitalise banks".

The Group noted many of the Policies introduced are very anti- property including a reduction in allowable interest on Residential investments down to 75%, BER costs of €200 per unit (ten year life), PRTB cost from €70 to €90 in January, Water metres coming at €200 per annum. HSE and Local Authority drive to reduce rents by up to 40% on residential where tenants are in receipt of rent supplement. There seems to be no intention to reduce stamp duty. In the commercial property market, the Rates burden has ballooned to 30% of annual value from 10%. There is a policy of "upward only reviews".

According to the Group, the net effect is that there is a complete absence of investors because no return on investment is possible. Existing investors are locked-in under water because there will be no investor to sell on to. Many investors are unable to maintain rented properties due to burden of costs. Banks cannot convert non-performing loans into good loans because there will be no buyers into the sector

Mr. Riney continued, "In view of the severe downturn in the property market, it would be grossly unfair to expect property owners to sustain such proposed increases in Taxes and Reductions in Tax Allowances as indicated in the Four Year National Recovery Plan. It is important for the Government to realise that Property can contribute to the Recovery. It would be our suggestion that a National Property Policy be prepared by Business owners, Landlords & Tenants, Property Professionals as well as the Legal community".

Real Estate Alliance reflected on the market and noted an increase in the volume of property professional projects been driven to the Group. The Group have recently acquired large valuation contracts for banks, various litigation cases and a number of Government departments. Incoming Vice Chairman Seamus Carthy said, "Changes in the Banking Sector have resulted in the valuation process being put at the central of the credit assessment system and the fact that Real Estate Alliance provide an Independent & Professional Valuation Service, has meant we have received an increase in instructions nationwide".

Real Estate Alliance consists of 35 offices around the country with each member in business for an average of 45 years each. "We have the experience to guide our clients through this", said the incoming Chairman, Patrick Riney. "Our members are long-standing in their communities and have the expertise to get through these challenging times. With the proposal of a property tax on the table, Real Estate Alliance member firms have a Nationwide Valuation Expertise and are in a position to provide this service for both Property and Site Valuations throughout the country".

ENDS

For further information contact

Eimer O’Keeffe

CEO, Real Estate Alliance

086 8249040

eimer@realestatealliance.ie

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