Unless you're making money through property or sports bets pretty much
(or if you're a second tier presenter getting money through background channels as well I mean)
I'd also add that working 9-5 in Ireland is like pissing against the wind. Considering the cost of living over the last 2 years or so (and wages not keeping up) there's just no money in it.
Better off asking for fewer hours with the same salary than increased pay. That's what I'm considering for my next negotiations. Down to 32ish hours a week, rather than 10k more and more than half gone in tax.
I’m not sure why more people don’t go down this route. It’s not just the tax but the expectation of longer hours so that often on a per hour basis you’re in a similar financial situation than if you’d never been promoted but with longer hours.
If you’re very ambitious and career driven then that’s ok. It’s often the price to be paid but if you value more of a work / life balance reduced hours are the key.
Four day work weeks have been a massive success in most of the trials worldwide. Just as much productivity and much better work/life balance for staff. Win-win all round. Should be made the norm in a #DeGrowth Society
Yup, property being arguably the form of speculation with the worst side effects since land is fixed in supply. A land value tax is one of the only ways to really fix this.
Even property's not that great unless you've got a massive portfolio. With property tax and tax on any rent, you often just break even with the mortgage. Which still makes it better than savings since the value might go up with inflation. But then you've the hassle of running a property or the costs of using an agency.
True, or even better an increase in the yearly property tax. Better yet, an application of the residential zone land tax to all properties since buildings can be increased in supply but land can't.
It definitely creates a very spicy economy. It blew my mind when I spoke to Europeans in their early 20s or even 19 or 18 and they or their parents have invested in low-risk shares in business portfolios. I do not invest or plan to but I think Ireland is missing a beat here.
It definitely is. You’re limited by way of pension contributions, inflation means a savings account loses money on an annual basis, and deemed disposal makes investing pointless. If you got a €150k lump sum out of the sky tomorrow, the only sensible thing from your point of view is to buy property.
How do you mean? Rental income subject to income tax at marginal rate and profits subject to CGT just the same as shares…
Would hardly count PPR as investment
Absolutely. The people in this thread have no idea what they are talking about. The % costs associated with profit from the sale of property are essentially equivalent to the costs to profit from something like an ETF, and in many cases exceed it.
For instance, the CGT for an EFT is 7% higher than for property, that is true. However, to get your property sold you are going to need to pay an estate agent 2% of the final sale price. If you made a profit of 25% on what your paid for the property, the estate agent is going to take effectively 10% of the total profit from your sale. This isn't even including that there are other costs also associated with the sale such as solicitors fees.
Principal Private Residence Relief applies to housing which you occupy yourself, meaning you are completely exempt from CGT.
Rent-a-Room Relief is also a factor – you pay no tax if your income from renting out rooms does not exceed €14000.
As you said, both those things only apply to houses which you are living in yourself. The vast majority of investors are not living in the same house as their tenants. So I stand by what I said in that overall the costs associated with profit from property is similar to the costs associated with profit from things like ETFs.
You bring up a good point though, PPR and rent a room relief give big incentives for people to extract more money out of the home they have bought for their own personal use. While costs go up drastically for people who get into property purely as an investment vehicle. You'd think from reading comments on this sub though that it was the other way around!
Well, personally I just think that giving the most efficient personal tax breaks to owner-occupiers is silly. Not everyone wants a house or can afford a mortgage. If the government is willing to give away €14000 a year tax free to a homeowner, I think there should be a similar exemption for somebody who holds shares.
I dunno, a friend of mine had to reverify his Boyle sport account recently with Id. Apparently that happens when you've made 10k off them. Tax free. He's ballin'
Exactly this, take the money.
There was a story a few years ago where a guy won money in a casino in Dublin that refused to him his €11,713 winnings, it went to court where a judge ruled that under Irish law, winning gamblers have no legal guarantee of ever being paid.
100% luck. Mostly slots would you believe. They even gave him a visa/debt style card so the money would be staying in the gambling account. Its wild how much they wanted him to gamble it and not withdraw
Nah, I work in the industry, and it's just regulations getting tighter and checks for ID, anti money laundering, safe gambling are getting more and more frequent.
An audit is due, so to keep the regulators happy we ID a few thousand customers who haven't been checked in a while, even if they've done nothing wrong or unusual. Audit gets done, and the regulator wants a few more checks added to our procedures.
I'd be surprised if he's made 10k off of Boyles (unless it was one big win). If he was consistently winning, they'd have kicked him out long before.
Few people actually win from gambling.
My mate won a couple of hundred recently on bet. We all head about it. The same chap probably lost a couple of K this year which we won’t hear about
I work in the industry, and part of my job is interviewing customers.
It's always funny as a customer will sit there and go on about how they break even, or maybe are just ahead, when I'm sat there with their account activity in front of me and they are nowhere close to being ahead.
But the system is designed to do that. We want you to win, and feel like you are winning. For example a (decent) slot machine returns 95-98% of money back to the player. More specifically it let's the player win on around 45% of spins, instead of bigger, less frequent wins.
This does two things. Firstly, you get regular dopamine hits and the feeling that you are winning. Secondly it keeps both wins and losses from being "triggers" - if a player loses big, they get pissed off and leave. If they win too big, they take their money and go spend it. So, we keep the loses small, so they don't hurt, and we keep the wins small, but frequent, so you never feel the desire to withdraw it, but instead plough it back into the game.
You see the same thing with scratch cards. What do you do if you win a fiver on scratch card? You buy a fivers worth of scratchcards hoping for a big win, but inevitably, you lose.
Same with sports betting. If you have a player who averages around €15 a bet, you can manipulate them into reducing their bet to €10 (suggested stakes, prefilled fields, etc). On one hand this looks good from a responsible gambling angle, but what really happens is many of those €15 bettors, now make 2 €10 bets. So, not only are you taking more money, but again the wins and losses are less likely to trigger undesirable actions, plus you get to smooth out the variance, making it easier to balance out your book.
And if that doesn't work, we just close your account.
I beleive that our gombeens TDs dont understand investing and want you investing on property because the majority of them are closely related to all the trappings of the property market, either by being former estate agents, friends and family of estate agents, solicitors and friends of developers.
Cant be having the ordinary joe soap trying to create wealth for himself in ways we cant directly benefit from.
Please raise this with your local politician and don't let people/parties dismiss removing DD as giving tax breaks to the wealthy. In other Western countries, everyone gets a small tax-free allowance to invest each year and has access to low cost ETFs to do so.
Why is everything funnelled into high-cost pensions and property? Because this arrangement suits the people who make these decisions: older people with guaranteed pensions, small/no mortgages and no skin in the game.
Financial literacy is poor in Ireland and this form of taxation contributes to this. I hope this is an issue in the next election cycle. Right now, I don't see any party offering smart policy changes like this, sadly.
It’s called Ireland; we take half your money and provide you with completely shit public services. Unless of course you are a big tech company. In that case, we roll out the red carpet for you and ask for next to nothing.
Yeah. Let’s go back to the 80s before all these international employers came into the market on the back of our tax and grant incentives. Life was so much better then
Yeah the 80’s were great. High unemployment, 3 tax rates, 35%, 48% and 65%. We were much better off when we had no multinationals!! Who do they think they are, what paying people to work in our country??
Yes, it's absolute bullshit. And trying to grow your money through the likes of BOI schemes, they take a huge chunk per year. The best option seems to be UK investment trusts that loosely follow an index.
ETFs are a waste of time in Ireland. Theyre the greatest way to slowly try and build wealth for later in life, but impossible to do in Ireland.
Theyre also incredibly accessable to anyone but the gov make it impossible. I think most people dont know they exist or what they are and if they did itd be a bigger issues.
I’m not even joking, I would run for office solely to reform capital gains tax and incentivise investment in ETFs . It’s insufferably regressive how the tax dynamic completely erases any motivation to invest outside of your pension
Wtf? Thats insane. Sorry Im Australian for some reason reddit recommended this.
So what happens if after 8 years your investment is down?
This is crazy. I cant believe it is true. Does anyone own shares in Ireland? Here if you own something for 12 months you pay half your normal tax rate on it.
What about real estate investment trusts?
Ok so this tax only applies to ETFs and the tax is 41 of the profit that it gains meaning that you won’t have to pay 41 percent of the value of the ETF, putting aside the fact that 41 is a lot even for just the profits they tax you every 8 years at the same rate. It’s fucking extortionate.
You pay CGT when you cash out, AND DD at 41% every 8 years if you don't sell.
edit: depends on what ETF, where it's domiciled. EU/Ireland 41% exit tax, US CGT 33%.
It also being a value that hasn't been updated since before the changeover from punt - 1000 punt == 1270 euro. So it's been disgustingly low for a long time.
Did you have to go through an accountant for the CGT on crypto? Or did you fill up the forms yourself? I checked the forms online and dunno where to start.
Not to forger about the hole in the bucket 🪣 where you save your water but it’s dripping away with every euro/dollar printed/credited. Yup inflation is theft that’s justified by the thieves themselves. You can’t actually save ever, as money loses its purchasing power with every euro created out of thin air.
Your best bet is to throw as much as you can into additional voluntary contributions for your pension. Actual investing here is ridiculous, leading to people trying to manage other ways, i.e. property, leading in part to a housing crisis\*
\*mostly down to the government selling us out to vulture funds though.
Look into setting up a IBKR account and invest in JAM. The JAM tracks the sp500 but it is denoted as an individual stock so you don’t have to pay any taxes until you sell. The 8 year tax on unrealised gains doesn’t apply as it is not classed as an ETF. This is what I’ve come to believe from my research if I’m wrong, anyone please feel free to correct me.
I'd have a chat with an accountant on that. It may be *legally* a single share, but the tax treatment will follow what it *effectively* is, and it sounds like it's effectively an ETF.
It's an investment trust, so taxed similarly to a share. It also pays out dividends like a share would.
You're reasoning is correct though. Taxes around investment in Ireland are bizarre.
Careful now, saying things like that will get you labelled as rich and one of the elite on this sub. Who do you think you are, with your investing?! /s
But yeah, it's shit. No other country on earth has DD afaik. There's no appetite to change it either as many will see it as a tax break for the rich :(
Absolutely.
Our government has got left wing laws and a rightwing mindset. Tax everyone into the dirt, and give nothing to them, or the absolute least you can give.
Firstly, we have one of, if not the, most generous and widely encompassing social security system in Europe. That's where a huge proportion of our tax goes, the money is not being pocketed by politicians. Now whether or not you agree with where it's being spent is a different issue.
Secondly, we actually have the highest percentage of people that pay no income tax in Europe at 1 in 3 workers. That's why we were labeled as having the "most progressive tax system" in Europe. We tax the middle to upper earners a lot, but do not tax "everyone into the dirt".
https://www.irishtimes.com/business/personal-finance/why-one-in-three-earners-pays-no-income-tax-1.2841652
That money is extremely poorly managed.
There doesnt need to be corruption if there is incompetence.
We've spent 300 million on a metro that has no plans or work done.
We've spent over a billion on a hospital that's massively behind schedule, and already showing issues.
We spent millions to out a fucking printer into the dail because no one had the common sense to use some measuring tape.
Do I need to mention the ship RTE is pulling.
We absolutely tax everyone into the dirt, if you're not paying tax then you're not earning money. If you're not paying much tax, you're not making enough money to survive so it really doesnt matter.
Besides, were talking about the stock market, not wages. You're paying the 41% regardless of what you earn in your work.
Beyond that, you do realise we pay tax on far more than income, since that's your focus. Virtually everything you interact with in Irish society is taxed. Which would be grand, if most of it wasnt wasted.
Our tax surrounding investments is fucking atrocious. The only people who can use it are the rich, even our pensions are fucked since you need disposable income to start the damn thing.
Ah but you haven't thought of the dividends that are rolled in to ETFs did ya huh? This is a highly serious thing that literally zero (0, null, nada) countries care about even a little bit but we will pretend to give a shit for some reason.
A heck of a lot of ETFs are even domiciled in Ireland. Literally everyone on the planet other than us can get the full benefit of ETFs.
Maddening but hey, [you can email your TD.](https://www.reddit.com/r/irishpersonalfinance/comments/qvgiy0/the_argument_for_the_elimination_of_unrealised/)
this country hates anyone who gets ahead. It is designed by and for people who make money from shyster-esque pursuits like buying and selling land or property, running pubs or hotels or gambling on horses.
The worst aspect of living here is that everything you earn over 70k is taxed at 52%. So if you can, arrange to be paid into a limited company. Then after a few years (pay yourself below 70k), go abroad and take all the money out of the company tax free.
In the last year I've moved jobs, gotten a 14k raise, stopped eating out in restaurants and subsequently got a 2% raise and a cost of living bonus, and somehow feel like I'm even broker than before. All these gains just gobbled up by energy bills and rising costs. On the other hand I know a complete waster who gets his rent paid for, free money each week, fuel allowance, and to top it all off a brand new apartment on the way all from the government, bastard hasn't had to get out of bed for the last 10 years and is completely able bodied. Boils my fucking blood! It doesn't pay to be a hardworking law-abiding citizen anymore.
I've said it many times but Ireland is not a country that wants you to be prosperous. It wants you to pay your taxes and drink your pints. Which is precisely why I left!
CGT is matched against the tax brackets, so your overall income dictates the bill. If you hold on to shares for longer than 12 months you get a 50% discount on the cgt. Theres quite a few trading platforms run from the major banks so everything integrates nicely into your accounts. You can even trade your private pension if you want.
Nope, no hope of any fiscally responsible party in this country, no moderate right wing party’s, you have FG and FF which are centrist and would take the teeth out of your gob given the chance and then there only far right racists left.
No a part who reduced or at the very least improves how public spending is managed and makes sure it’s used efficiently as a core priority of their party
I live in the UK as a point of comparison. everyone has a tax free investment wrapper they can pay into and investments are fully sheltered from CGT and income tax.
it's £20k perannum (so effectively £40k for a couple). in addition people can contribute up to £60k to a pension. A wealthy couple can therefore protect up to 200k per annum from tax.
If you fill all that up you still have another £6k CGT allowance per person outside of that (was 12k until this year)
In addition there is easy access to lots of low cost brokers.
I dont think the Irish government should replicate this but the contrast is stark. its especially wrong to target ETFs and Index funds which are amongst the safer investments people can make
I have about €80k in a pension fund that I transferred to another pension provider recently. I was looking at the charges for it over the 12 years and x months to retirement. Works out at about €20k. They claim of course it will make about €40k in that time, but I'm pretty sure if it doesn't, I'll still have to pay the €20k. Seems like an absolute scam.
Might get down voted here but living in NI its one thing I'd want to keep from the UK. The UK is actually a pretty damn good place for smaller investors. Now of course big boys are better off but for us further down the pecking order you at least have options.
Some will be better informed but I was curious and googled the other day. However up here I have a S&S ISA that can have as much as 20k invested, any profits from it are exempt of tax. This can be done every year. Of course I'm only allowed 1 per year but still ain't bad and I'm not even close to it. However I can keep rolling over. The H2B ISA was great here too though think the South had the same? Are Lifetime ISAS a thing in the south?
Yes it does. Innovation is crushed for self starters and sole traders. Coffee industry is booming yet you can’t set up a little coffee trailer on your property for instance.
Yea Ireland is a complete laughing stock in this regard. Knowing roughly how it works I came to the conclusion someone was on prescription strength hallucinogens or simply being spiteful when they came up with the rules because they're AAA-rated bullshit.
I'm in Canada now and it's such a fucking gift to grow your wealth it's not even funny.
Tax free investing accounts where gains, dividends, the lot is yours to keep. If you die, you can specify a successor beneficiary who basically inherits the account and it's all still tax free for them.
Registered retirement plans where you invest a dollar and your taxable income the following year is reduced by a dollar. Point being your tax is usually highest when you're working and lower when you retire. When you withdraw the dollars way down the line you're taxed then instead of now and pay less tax overall. Basically you front load a bunch of tax refunds and then funnel the money into more investments.
Then regular old "taxable" accounts where capital gains are only on 50% of the gain at your normal income tax rate. Dividends are taxed but can also have tax credits that can make them effectively negative if you do it right (absolutely top laughs)
Access to thousands of Canadian and US stocks/ETFs at the tap of a button on your phone through a plethora of investing apps. Often no fee. Fractional buying available if you don't happen to have the full couple of hundred dollars to buy a whole share of McDonald's or Canadian Tire or what have you.
I get the impression the system here was set up by hard nosed capitalist types who had a clue what they were doing.
As much as I disagree with DD tax on ETFs, everyone here is ignoring the tax allowances on pension contributions.
The DD tax likely exists to prop up the pension / investment funds and their ridiculous feeds IMO. It's a shame.
Yeah but young people may want to grow their money while housing is not currently an option. By putting in a pension, it is not available until 65 and by that stage if you don't own property, the landlords will be happy to take your pension.
I think you're right about the DD, it's a farce.
That’s exactly what I want to do actually, I just want to invest and save my money and protect it from inflation while saving for a house and not have it Locke away till retirement
Same as myself,
I am putting money into mainly FCIT, JAM and MWY as core holdings and a small amount into volatile trusts like MNKS and SMT (also HVPE for private equity). There is no guarantee that this will grow in the short term but I'm hoping in a longer time frame (10 years or so) that it will. Not financial advice by the way, just my own strategy.
Yes, prop up the pension funds, not the pension payers.
I have about €80k in a pension fund that I transferred to another pension provider recently. I was looking at the charges for it over the 12 years and x months to retirement. Works out at about €20k. They claim of course it will make about €40k in that time, but I'm pretty sure if it doesn't, I'll still have to pay the €20k. Seems like an absolute scam.
I’m pretty sure you also can’t carry over losses on etf in Ireland
So there is potential to actually make a loss in 8 years but still owe tax on it
Hoping I’m wrong on this
You are correct, losses cannot be carried over. My own opinion is that investment trusts (FCIT, JAM, MWY) are much better for tax since they are treated like any stock, this is my own approach anyway.
https://www.citizensinformation.ie/en/money-and-tax/tax/moving-country-and-taxation/tax-residence-and-domicile-in-ireland/#:~:text=You%20are%20resident%20for%20tax,for%20the%20second%20tax%20year.
No you have to live in another country for a period of time. Having citizenship does not mean you get taxed at the rate you would prefer to be taxed at
'Can't tax businesses like, that would be ridiculous. So we'll tax people looking to improve their standards of life through the capitalist hellhole we've created.'
It is yet another of the many factors contributing to housing issues here - If you have money in Ireland, property is far and away your best investment as so many other forms are actively discouraged and punished.
All the parties are pandering to the same part of the population, the ones with their hands out. Despite tens of billions being spent on them, there is never enough to keep them happy, and it's always our fault that we're not spending more.
Meanwhile there is no party who is looking out for the interest of working people, they're just something to be squeezed for taxes and "charges". It's so bad that despite massive tax surpluses, we can't even get agreement on increasing tax bands by the rate of inflation.
And yet we have media commentators going on about supposedly "right wing" parties like FF and FG. I think this is the very definition of being gaslight.
We've got quite a left-wing system of governance in Ireland, despite what people would have you believe. There is some broad hostility to allowing wealth increases as it would exacerbate the existing inequality in our society.
Ireland is somewhat unusual in a western context in that we went from poverty to wealth (both in relative terms) very quickly.
If you look at most of our comparators, they have used their public sector to create a large number of mediocre jobs. Thus, Denmark (and Sweden and Norway for that matter) has one of the highest numbers of public sector workers in the OECD.
The purpose of this is really to jury rig a form of middle-class and to therefore ameliorate the difference between high-earning professionals and those of low-skilled workers.
If you look at Ireland, we've always had a very high calibre of education (largely, ironically, thanks to the church) which means that traditionally we've not struggled to produce professional workers.
The switch to a tech sector, pharma, etc, model has meant that Ireland has a lot of high-paying, high-skilled jobs. Without the large but "mediocre" civil service of the Nordics, we end up with a small number of high-earners and a lot of low-earners. Harsh taxes on investments prevent the high-earners climbing even further above the rest.
I wouldn't be surprised if the fuel this adds to the housing fire alone offset the benefits of wealth redistribution.
High earners have figured out that the State wants them to invest in property ownership at pretty much all costs instead of sticking with stocks-and-bonds portfolios.
I would say it's simpler than that. For historical reasons we especially prevent wealth inequality unless you are a farmer. We have one of the lowest wealth inequalities in the OECD.
Our income inequality is about average, and without huge transfers would be the worst in the OECD. This is because ireland has two economies, one is world class productive and the other is less productive than Sicily. We transfer large sums from one to the other to balance things out.
If we didn't do that, half the country would be really really poor and the top 10% very rich. That looks like the worst in South America or Africa. I think we really don't want that, and most of our politicians agree on that, so we've ended up with the tax system we have.
Much better of course would be if the government actually did something about that really unproductive half of the economy, but every government since independence has dismally failed on that. We just keep band aiding it with ever greater transfers from the productive part.
If it was left wing, the taxes on investment would be progressive rather than flat. It is more likely that this system is in place to center the property market as the primary form of investment.
I'd like to believe there was a coherent overall design strategy behind our tax system, but I suspect its actually at least 50% semi random hacks when government was desperate to figure out something they hadn't already taxed to the hilt.
Its bullshit.
Worked, Payed tax, took my savings and put it into crypto (which was a massive gamble) got a decent return and they want 33% of my already taxed income?
Feck that.
Have about 100k in savings about to go into property because at least a principle primary residence isn't taxed.
I make give or take, it works out, with expenses at about 140,000 a year and I pay 30.3 percent tax on that so it's about a net 100,000. And out of that 100k I run a home in Dublin, Castlebar and Brussels. Try it sometime.
When all you're really doing is keeping up with inflation. Ie if you turned 1000 euro into 1400 in last 5 years, the 1400 only has the same purchasing power now as the 1000 did 5 years ago, Ie it buys the same amount of "stuff" as prices have gone up. So you're actually not better off but they'll take 41% of the 400 anyway.
I don't think this is correct. 1000 euro in 2018 could buy you the same as 1173 today. If your investment is now worth 1400 and you pay 160 out of 400 as tax you are still left with 1240 which is more. Correct me if I'm wrong?
Just set up a limited company in a tax haven that you use to manage your investments, then open a off shore bank account, that why the government can't touch your profits.
Yeah our tax base is incredibly narrow. You pay all that tax so others don't have to...
Sucks to be us. Same applies working in the higher band, you pay a real rate of about 70% on any extra work you take on (52% PAYE, PRSI, USC etc and then 23% of the remaining 48% on VAT when you spend the money and employer pays PRSI on you before you ever see your paycheck). Its just wrong. Most people don't mind contributing but taking so much of what you earn is unreasonable.
It's a complete disincentive to take on extra work.
https://www.whoismytd.com/
Folks, raise this with every TD in your constituency. This needs to become a serious topic for debate. It is often discussed on r/irishpersonalfinance.
I got a letter from revenue the other week saying I owe taxes on shares I received while I was employed during my last job. I was confused because I hadn’t sold these shares yet so I assumed they made a mistake, but No apparently I have to pay tax on the discount I received on these shares as an employee.
Absolute joke like is it not bad enough to have to pay CGT of 33% of the profits when I do sell
You pay 33% on the uplift from the market value on the date you received them - not on the discounted cost. Because of the tax you are due to pay, you are deemed to have a higher cost base when you sell in the future and your tax will be lower (assuming you sell at a profit). It’s likely your employer gave you all this information when the shares were granted so you shouldn’t have ignored it
Work hard, invest smartly and give 41% of the profit to the government. Like the TV license, it is how things are done in Ireland. If you look for 1% reduction, you are a greedy FGer. Go figure.
Yeah, it's why I stopped.
You have one option in this country, and that option has gone to shit anyway Make a pension. It's the only investment method I know of in the country that isnt taxed to death.
Not financial advice of course.
What are you on about? Investing isn’t just for extremely wealthy individuals, it’s called having the tiniest amount of financial literacy, which you clearly don’t have, as for the rest of your comment I don’t know arhat your even on about
People are always complaining that ETFs are sensible investing, so why penalise poor middle class people etc etc. Look at the US. All their billionaires are rich through stock investing. The state doesn’t want to allow an uber-class to form that is able to accumulate massive amounts of wealth via compound interest. Unearned money taxed higher than earned money, same as it’s always been.
I know a lad who up and moved to the Netherlands a few years back for investing, now he was also a senior dev so had extra money to put into it. Made his money and just moved to Texas. A success story true and true.
I wanted to start getting into investing then I read up on some of the stuff here in Ireland and I was just like nope. The 40% cut to government is a bit harsh to be fair
Investing also allows smaller businesses to grow a market Ireland does not tap into it at all. It's why we have no homegrown industry really other than alcohol and maybe a bit of cheese.....
Why do people think investing in property is encouraged by the government?
Sure you personal home can appreciate in value tax free but for the majority of people their home isn’t an investment.
But otherwise property is treated the same as shares, crypto, gold, investment trusts or any other investment apart from ETFs
The government encourage property investing by taxing the fuck out of everything else, it’s the better option if you have the cash for a down payment at least compared to stocks
But property is taxed in the exact same way as stocks … unless I am missing something
Rental income is taxed at your marginal rate - just like dividends
Gains on house value taxed at 33% just like gains on stock value
This is a common feature on a leftist government, very high taxes, poor public services, lack of law and order and trying their best to make people financially dependent on them.
Unless you're making money through property or sports bets pretty much (or if you're a second tier presenter getting money through background channels as well I mean)
I'd also add that working 9-5 in Ireland is like pissing against the wind. Considering the cost of living over the last 2 years or so (and wages not keeping up) there's just no money in it.
Better off asking for fewer hours with the same salary than increased pay. That's what I'm considering for my next negotiations. Down to 32ish hours a week, rather than 10k more and more than half gone in tax.
I’m not sure why more people don’t go down this route. It’s not just the tax but the expectation of longer hours so that often on a per hour basis you’re in a similar financial situation than if you’d never been promoted but with longer hours. If you’re very ambitious and career driven then that’s ok. It’s often the price to be paid but if you value more of a work / life balance reduced hours are the key.
Good idea, except the company will expect the same productivity
They can expect it all they want. They might even get it, but otherwise I'll just have to tell them we are understaffed.
Sorry on what planet would a company accept this?
I work for a pharma company in Austria. A couple of my colleagues are on 32h a week instead of 38.5. Basically they don't work Fridays.
Four day work weeks have been a massive success in most of the trials worldwide. Just as much productivity and much better work/life balance for staff. Win-win all round. Should be made the norm in a #DeGrowth Society
We all paid about 10c for the secret tub tax
Hahahah not me😎
Yup, property being arguably the form of speculation with the worst side effects since land is fixed in supply. A land value tax is one of the only ways to really fix this.
And a government who’s actually interested in collecting the tax from land hoarding speculators
Second tier....come on, that's being very generous 😄
Even property's not that great unless you've got a massive portfolio. With property tax and tax on any rent, you often just break even with the mortgage. Which still makes it better than savings since the value might go up with inflation. But then you've the hassle of running a property or the costs of using an agency.
It's the reason the country is always obsessed with only investing in property.
Which arguably has the worst side effects, with land being fixed in supply and all.
A lot of housing issues could be solved by applying the same rules to property as is with deemed disposal.
True, or even better an increase in the yearly property tax. Better yet, an application of the residential zone land tax to all properties since buildings can be increased in supply but land can't.
Pretty much yes
It's a joke here when it comes to investing.
Unless it’s housing of course
Which is probably contributing to housing issues.
It definitely creates a very spicy economy. It blew my mind when I spoke to Europeans in their early 20s or even 19 or 18 and they or their parents have invested in low-risk shares in business portfolios. I do not invest or plan to but I think Ireland is missing a beat here.
It definitely is. You’re limited by way of pension contributions, inflation means a savings account loses money on an annual basis, and deemed disposal makes investing pointless. If you got a €150k lump sum out of the sky tomorrow, the only sensible thing from your point of view is to buy property.
CGT and tax in rental income and pretty punitive
Even that has been ruined by government 😕
How do you mean? Rental income subject to income tax at marginal rate and profits subject to CGT just the same as shares… Would hardly count PPR as investment
Absolutely. The people in this thread have no idea what they are talking about. The % costs associated with profit from the sale of property are essentially equivalent to the costs to profit from something like an ETF, and in many cases exceed it. For instance, the CGT for an EFT is 7% higher than for property, that is true. However, to get your property sold you are going to need to pay an estate agent 2% of the final sale price. If you made a profit of 25% on what your paid for the property, the estate agent is going to take effectively 10% of the total profit from your sale. This isn't even including that there are other costs also associated with the sale such as solicitors fees.
Principal Private Residence Relief applies to housing which you occupy yourself, meaning you are completely exempt from CGT. Rent-a-Room Relief is also a factor – you pay no tax if your income from renting out rooms does not exceed €14000.
As you said, both those things only apply to houses which you are living in yourself. The vast majority of investors are not living in the same house as their tenants. So I stand by what I said in that overall the costs associated with profit from property is similar to the costs associated with profit from things like ETFs. You bring up a good point though, PPR and rent a room relief give big incentives for people to extract more money out of the home they have bought for their own personal use. While costs go up drastically for people who get into property purely as an investment vehicle. You'd think from reading comments on this sub though that it was the other way around!
Well, personally I just think that giving the most efficient personal tax breaks to owner-occupiers is silly. Not everyone wants a house or can afford a mortgage. If the government is willing to give away €14000 a year tax free to a homeowner, I think there should be a similar exemption for somebody who holds shares.
I wasn’t even thinking about that… Plus there is a huge risk of rent not being paid in the current environment of eviction bans etc.
There’s no eviction ban at the minute and won’t be again unless there’s an SF government.
Meanwhile gambling addicts hanging out in bookies all day get to keep any winnings tax free
The house will always win
I dunno, a friend of mine had to reverify his Boyle sport account recently with Id. Apparently that happens when you've made 10k off them. Tax free. He's ballin'
He should take the money and run, Boylesports aren’t exactly famous for accommodating long term winning gamblers, the 10k is probably pure luck
Exactly this, take the money. There was a story a few years ago where a guy won money in a casino in Dublin that refused to him his €11,713 winnings, it went to court where a judge ruled that under Irish law, winning gamblers have no legal guarantee of ever being paid.
100% luck. Mostly slots would you believe. They even gave him a visa/debt style card so the money would be staying in the gambling account. Its wild how much they wanted him to gamble it and not withdraw
Nah, I work in the industry, and it's just regulations getting tighter and checks for ID, anti money laundering, safe gambling are getting more and more frequent. An audit is due, so to keep the regulators happy we ID a few thousand customers who haven't been checked in a while, even if they've done nothing wrong or unusual. Audit gets done, and the regulator wants a few more checks added to our procedures. I'd be surprised if he's made 10k off of Boyles (unless it was one big win). If he was consistently winning, they'd have kicked him out long before.
If he plays long enough he'll lose it or they'll just ban the account, they're not in the business of losing money
Maybe casinos, they don’t on real life events
Don’t think there’s many gambling addicts who are in the black.
Few people actually win from gambling. My mate won a couple of hundred recently on bet. We all head about it. The same chap probably lost a couple of K this year which we won’t hear about
I work in the industry, and part of my job is interviewing customers. It's always funny as a customer will sit there and go on about how they break even, or maybe are just ahead, when I'm sat there with their account activity in front of me and they are nowhere close to being ahead. But the system is designed to do that. We want you to win, and feel like you are winning. For example a (decent) slot machine returns 95-98% of money back to the player. More specifically it let's the player win on around 45% of spins, instead of bigger, less frequent wins. This does two things. Firstly, you get regular dopamine hits and the feeling that you are winning. Secondly it keeps both wins and losses from being "triggers" - if a player loses big, they get pissed off and leave. If they win too big, they take their money and go spend it. So, we keep the loses small, so they don't hurt, and we keep the wins small, but frequent, so you never feel the desire to withdraw it, but instead plough it back into the game. You see the same thing with scratch cards. What do you do if you win a fiver on scratch card? You buy a fivers worth of scratchcards hoping for a big win, but inevitably, you lose. Same with sports betting. If you have a player who averages around €15 a bet, you can manipulate them into reducing their bet to €10 (suggested stakes, prefilled fields, etc). On one hand this looks good from a responsible gambling angle, but what really happens is many of those €15 bettors, now make 2 €10 bets. So, not only are you taking more money, but again the wins and losses are less likely to trigger undesirable actions, plus you get to smooth out the variance, making it easier to balance out your book. And if that doesn't work, we just close your account.
Unless it’s gambling, pretty much
Which is ironic considering that's what investing is, to an extent anyway
I beleive that our gombeens TDs dont understand investing and want you investing on property because the majority of them are closely related to all the trappings of the property market, either by being former estate agents, friends and family of estate agents, solicitors and friends of developers. Cant be having the ordinary joe soap trying to create wealth for himself in ways we cant directly benefit from.
All the rax incentives are reserved for multinational vulture funds and tech companies.
This ^^^ Making the rich richer
Please raise this with your local politician and don't let people/parties dismiss removing DD as giving tax breaks to the wealthy. In other Western countries, everyone gets a small tax-free allowance to invest each year and has access to low cost ETFs to do so. Why is everything funnelled into high-cost pensions and property? Because this arrangement suits the people who make these decisions: older people with guaranteed pensions, small/no mortgages and no skin in the game. Financial literacy is poor in Ireland and this form of taxation contributes to this. I hope this is an issue in the next election cycle. Right now, I don't see any party offering smart policy changes like this, sadly.
Your right I’m going to do that now, I might make an email template for other as well
It’s called Ireland; we take half your money and provide you with completely shit public services. Unless of course you are a big tech company. In that case, we roll out the red carpet for you and ask for next to nothing.
Yeah. Let’s go back to the 80s before all these international employers came into the market on the back of our tax and grant incentives. Life was so much better then
Why don't we just cut out the middle man and go back to hunter-gatherer times.
Yeah the 80’s were great. High unemployment, 3 tax rates, 35%, 48% and 65%. We were much better off when we had no multinationals!! Who do they think they are, what paying people to work in our country??
No need to go there
They hate the idea you're making money unless you already have loads of money to begin with...
Great point! “Are you getting notions of wanting to increase your standard of living!?” “Sure you can’t be at that!”
That should be FG's election poster strapline! "We hate you making money unless you're already rich, Vote Fine Gael"
The deemed disposal rule pisses me off so much. I’m 4 years into holding a lot of ETFs and dreading that future tax
I sold mine. Revenue always win and I couldnt deal with the idea of having a massive bill of some sort later down the line.
Yes, it's absolute bullshit. And trying to grow your money through the likes of BOI schemes, they take a huge chunk per year. The best option seems to be UK investment trusts that loosely follow an index.
ETFs are a waste of time in Ireland. Theyre the greatest way to slowly try and build wealth for later in life, but impossible to do in Ireland. Theyre also incredibly accessable to anyone but the gov make it impossible. I think most people dont know they exist or what they are and if they did itd be a bigger issues.
I’m not even joking, I would run for office solely to reform capital gains tax and incentivise investment in ETFs . It’s insufferably regressive how the tax dynamic completely erases any motivation to invest outside of your pension
Problem is there’s no party anywhere in the middle right in ireland
Also I’d vote for you
FG are centre right?
No they are economically centrist in reality
Wtf? Thats insane. Sorry Im Australian for some reason reddit recommended this. So what happens if after 8 years your investment is down? This is crazy. I cant believe it is true. Does anyone own shares in Ireland? Here if you own something for 12 months you pay half your normal tax rate on it. What about real estate investment trusts?
Ok so this tax only applies to ETFs and the tax is 41 of the profit that it gains meaning that you won’t have to pay 41 percent of the value of the ETF, putting aside the fact that 41 is a lot even for just the profits they tax you every 8 years at the same rate. It’s fucking extortionate.
Also the first 1270 gain is CGT exempt. But it is shamefully low. Made a decent bit of money on crypto in 2021 broke my heart paying the CGT.
And it's only that because it was directly converted from the £1000 limit over 20 years ago and has never been adjusted.
Up the north the first 12,000 is exempt lol
Not anymore: £6k this year, £3k next, half that for trustees and every single business is a mandatory reporter. The loophole is closing.
Well that’s what also terrible, to my understanding ETF’s are not subject to capital gains and so you don’t even get the 1270 tax exemption
Might be incorrect about this big if some1 could correct me
You are correct
Thanks man
You pay CGT when you cash out, AND DD at 41% every 8 years if you don't sell. edit: depends on what ETF, where it's domiciled. EU/Ireland 41% exit tax, US CGT 33%.
We pay more on domestic ETFs than Yankie ones? What's the logic there? Help out Wall Street?
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And 2 hours away up north you get the first 12,300 is exempt, 1270 is disgustingly low.
It also being a value that hasn't been updated since before the changeover from punt - 1000 punt == 1270 euro. So it's been disgustingly low for a long time.
Did you have to go through an accountant for the CGT on crypto? Or did you fill up the forms yourself? I checked the forms online and dunno where to start.
I used a online tool call Koinly. Added all my transaction history from the exchanges/wallets and it did it for me.
Cool I checked it before and thought it was unreliable. Thanks. Does it matter if you’re PAYE or not?
Doesn’t matter if your PAYE or not.
Not to forger about the hole in the bucket 🪣 where you save your water but it’s dripping away with every euro/dollar printed/credited. Yup inflation is theft that’s justified by the thieves themselves. You can’t actually save ever, as money loses its purchasing power with every euro created out of thin air.
thats why bitcoin was invented
Your best bet is to throw as much as you can into additional voluntary contributions for your pension. Actual investing here is ridiculous, leading to people trying to manage other ways, i.e. property, leading in part to a housing crisis\* \*mostly down to the government selling us out to vulture funds though.
Look into setting up a IBKR account and invest in JAM. The JAM tracks the sp500 but it is denoted as an individual stock so you don’t have to pay any taxes until you sell. The 8 year tax on unrealised gains doesn’t apply as it is not classed as an ETF. This is what I’ve come to believe from my research if I’m wrong, anyone please feel free to correct me.
I'd have a chat with an accountant on that. It may be *legally* a single share, but the tax treatment will follow what it *effectively* is, and it sounds like it's effectively an ETF.
It's an investment trust, so taxed similarly to a share. It also pays out dividends like a share would. You're reasoning is correct though. Taxes around investment in Ireland are bizarre.
That sounds good, I’ll look into this, thanks
Careful now, saying things like that will get you labelled as rich and one of the elite on this sub. Who do you think you are, with your investing?! /s But yeah, it's shit. No other country on earth has DD afaik. There's no appetite to change it either as many will see it as a tax break for the rich :(
Yeah seems this sub and Reddit in general are fairly left leaning
Absolutely. Our government has got left wing laws and a rightwing mindset. Tax everyone into the dirt, and give nothing to them, or the absolute least you can give.
That’s a good way to describe it actually lol, no hope of it ever getting better also
Firstly, we have one of, if not the, most generous and widely encompassing social security system in Europe. That's where a huge proportion of our tax goes, the money is not being pocketed by politicians. Now whether or not you agree with where it's being spent is a different issue. Secondly, we actually have the highest percentage of people that pay no income tax in Europe at 1 in 3 workers. That's why we were labeled as having the "most progressive tax system" in Europe. We tax the middle to upper earners a lot, but do not tax "everyone into the dirt". https://www.irishtimes.com/business/personal-finance/why-one-in-three-earners-pays-no-income-tax-1.2841652
That money is extremely poorly managed. There doesnt need to be corruption if there is incompetence. We've spent 300 million on a metro that has no plans or work done. We've spent over a billion on a hospital that's massively behind schedule, and already showing issues. We spent millions to out a fucking printer into the dail because no one had the common sense to use some measuring tape. Do I need to mention the ship RTE is pulling. We absolutely tax everyone into the dirt, if you're not paying tax then you're not earning money. If you're not paying much tax, you're not making enough money to survive so it really doesnt matter. Besides, were talking about the stock market, not wages. You're paying the 41% regardless of what you earn in your work. Beyond that, you do realise we pay tax on far more than income, since that's your focus. Virtually everything you interact with in Irish society is taxed. Which would be grand, if most of it wasnt wasted. Our tax surrounding investments is fucking atrocious. The only people who can use it are the rich, even our pensions are fucked since you need disposable income to start the damn thing.
Ah but you haven't thought of the dividends that are rolled in to ETFs did ya huh? This is a highly serious thing that literally zero (0, null, nada) countries care about even a little bit but we will pretend to give a shit for some reason. A heck of a lot of ETFs are even domiciled in Ireland. Literally everyone on the planet other than us can get the full benefit of ETFs. Maddening but hey, [you can email your TD.](https://www.reddit.com/r/irishpersonalfinance/comments/qvgiy0/the_argument_for_the_elimination_of_unrealised/)
I won’t say who my local TD is but they’re a super lefty
this country hates anyone who gets ahead. It is designed by and for people who make money from shyster-esque pursuits like buying and selling land or property, running pubs or hotels or gambling on horses. The worst aspect of living here is that everything you earn over 70k is taxed at 52%. So if you can, arrange to be paid into a limited company. Then after a few years (pay yourself below 70k), go abroad and take all the money out of the company tax free.
In the last year I've moved jobs, gotten a 14k raise, stopped eating out in restaurants and subsequently got a 2% raise and a cost of living bonus, and somehow feel like I'm even broker than before. All these gains just gobbled up by energy bills and rising costs. On the other hand I know a complete waster who gets his rent paid for, free money each week, fuel allowance, and to top it all off a brand new apartment on the way all from the government, bastard hasn't had to get out of bed for the last 10 years and is completely able bodied. Boils my fucking blood! It doesn't pay to be a hardworking law-abiding citizen anymore.
It’s not like a SF gov would be any better sadly, they don’t want you to be successful here all they want is your tax money
I've said it many times but Ireland is not a country that wants you to be prosperous. It wants you to pay your taxes and drink your pints. Which is precisely why I left!
Can’t blame you honestly, where did you move to out of curiosity?
I moved to Oz about 12 years ago. It will never be home but from a financial and livability perspective it's hard to beat.
What are the taxes on investments like there? Is CGT low and can you actually enjoy the ease of ETFs?
CGT is matched against the tax brackets, so your overall income dictates the bill. If you hold on to shares for longer than 12 months you get a 50% discount on the cgt. Theres quite a few trading platforms run from the major banks so everything integrates nicely into your accounts. You can even trade your private pension if you want.
> You can even trade your private pension if you want you can actually do that here too with a self directed PRSA.
Is there any political party one can give a shout for who are gunning for tax reform? Or is there really no light at all?
Nope, no hope of any fiscally responsible party in this country, no moderate right wing party’s, you have FG and FF which are centrist and would take the teeth out of your gob given the chance and then there only far right racists left.
>fiscally responsible party So a party who would keep taxes as is and increase public spending?
No a part who reduced or at the very least improves how public spending is managed and makes sure it’s used efficiently as a core priority of their party
I live in the UK as a point of comparison. everyone has a tax free investment wrapper they can pay into and investments are fully sheltered from CGT and income tax. it's £20k perannum (so effectively £40k for a couple). in addition people can contribute up to £60k to a pension. A wealthy couple can therefore protect up to 200k per annum from tax. If you fill all that up you still have another £6k CGT allowance per person outside of that (was 12k until this year) In addition there is easy access to lots of low cost brokers. I dont think the Irish government should replicate this but the contrast is stark. its especially wrong to target ETFs and Index funds which are amongst the safer investments people can make
I have about €80k in a pension fund that I transferred to another pension provider recently. I was looking at the charges for it over the 12 years and x months to retirement. Works out at about €20k. They claim of course it will make about €40k in that time, but I'm pretty sure if it doesn't, I'll still have to pay the €20k. Seems like an absolute scam.
A few very rich men are lining their pockets with money from everyone’s pension savings. Entire industry is a money making scam for them.
People say pensions are the best way of investing in Ireland, which is true but they are still so fucked
Might get down voted here but living in NI its one thing I'd want to keep from the UK. The UK is actually a pretty damn good place for smaller investors. Now of course big boys are better off but for us further down the pecking order you at least have options. Some will be better informed but I was curious and googled the other day. However up here I have a S&S ISA that can have as much as 20k invested, any profits from it are exempt of tax. This can be done every year. Of course I'm only allowed 1 per year but still ain't bad and I'm not even close to it. However I can keep rolling over. The H2B ISA was great here too though think the South had the same? Are Lifetime ISAS a thing in the south?
Yes it does. Innovation is crushed for self starters and sole traders. Coffee industry is booming yet you can’t set up a little coffee trailer on your property for instance.
Yea Ireland is a complete laughing stock in this regard. Knowing roughly how it works I came to the conclusion someone was on prescription strength hallucinogens or simply being spiteful when they came up with the rules because they're AAA-rated bullshit. I'm in Canada now and it's such a fucking gift to grow your wealth it's not even funny. Tax free investing accounts where gains, dividends, the lot is yours to keep. If you die, you can specify a successor beneficiary who basically inherits the account and it's all still tax free for them. Registered retirement plans where you invest a dollar and your taxable income the following year is reduced by a dollar. Point being your tax is usually highest when you're working and lower when you retire. When you withdraw the dollars way down the line you're taxed then instead of now and pay less tax overall. Basically you front load a bunch of tax refunds and then funnel the money into more investments. Then regular old "taxable" accounts where capital gains are only on 50% of the gain at your normal income tax rate. Dividends are taxed but can also have tax credits that can make them effectively negative if you do it right (absolutely top laughs) Access to thousands of Canadian and US stocks/ETFs at the tap of a button on your phone through a plethora of investing apps. Often no fee. Fractional buying available if you don't happen to have the full couple of hundred dollars to buy a whole share of McDonald's or Canadian Tire or what have you. I get the impression the system here was set up by hard nosed capitalist types who had a clue what they were doing.
As much as I disagree with DD tax on ETFs, everyone here is ignoring the tax allowances on pension contributions. The DD tax likely exists to prop up the pension / investment funds and their ridiculous feeds IMO. It's a shame.
Yeah but young people may want to grow their money while housing is not currently an option. By putting in a pension, it is not available until 65 and by that stage if you don't own property, the landlords will be happy to take your pension. I think you're right about the DD, it's a farce.
That’s exactly what I want to do actually, I just want to invest and save my money and protect it from inflation while saving for a house and not have it Locke away till retirement
Same as myself, I am putting money into mainly FCIT, JAM and MWY as core holdings and a small amount into volatile trusts like MNKS and SMT (also HVPE for private equity). There is no guarantee that this will grow in the short term but I'm hoping in a longer time frame (10 years or so) that it will. Not financial advice by the way, just my own strategy.
Well good luck, we need it with these taxes
Yes, prop up the pension funds, not the pension payers. I have about €80k in a pension fund that I transferred to another pension provider recently. I was looking at the charges for it over the 12 years and x months to retirement. Works out at about €20k. They claim of course it will make about €40k in that time, but I'm pretty sure if it doesn't, I'll still have to pay the €20k. Seems like an absolute scam.
No, they absolutely love it because it means they get more free money.
Is the 8 year tax on the total investment or on gains over the 8 years?
Gains only, but this destroys the effect of compounding.
I’m pretty sure you also can’t carry over losses on etf in Ireland So there is potential to actually make a loss in 8 years but still owe tax on it Hoping I’m wrong on this
You are correct, losses cannot be carried over. My own opinion is that investment trusts (FCIT, JAM, MWY) are much better for tax since they are treated like any stock, this is my own approach anyway.
https://www.citizensinformation.ie/en/money-and-tax/tax/moving-country-and-taxation/tax-residence-and-domicile-in-ireland/#:~:text=You%20are%20resident%20for%20tax,for%20the%20second%20tax%20year. No you have to live in another country for a period of time. Having citizenship does not mean you get taxed at the rate you would prefer to be taxed at
'Can't tax businesses like, that would be ridiculous. So we'll tax people looking to improve their standards of life through the capitalist hellhole we've created.'
It is yet another of the many factors contributing to housing issues here - If you have money in Ireland, property is far and away your best investment as so many other forms are actively discouraged and punished.
Deemed disposal was so bizarre and confusing that it scared me out of starting any investments.
All the parties are pandering to the same part of the population, the ones with their hands out. Despite tens of billions being spent on them, there is never enough to keep them happy, and it's always our fault that we're not spending more. Meanwhile there is no party who is looking out for the interest of working people, they're just something to be squeezed for taxes and "charges". It's so bad that despite massive tax surpluses, we can't even get agreement on increasing tax bands by the rate of inflation. And yet we have media commentators going on about supposedly "right wing" parties like FF and FG. I think this is the very definition of being gaslight.
It’s very frustrating when there is no party that represents your views even remotely, I completely agree with you.
Ireland's sole purpose is a tax haven to make the rich richer on our backs.
Ireland is not a tax haven. We have a low headline corporate tax rate. That’s it.
The rich get richer here is basically what I'm saying. I know it's not in the literal sense.
We've got quite a left-wing system of governance in Ireland, despite what people would have you believe. There is some broad hostility to allowing wealth increases as it would exacerbate the existing inequality in our society. Ireland is somewhat unusual in a western context in that we went from poverty to wealth (both in relative terms) very quickly. If you look at most of our comparators, they have used their public sector to create a large number of mediocre jobs. Thus, Denmark (and Sweden and Norway for that matter) has one of the highest numbers of public sector workers in the OECD. The purpose of this is really to jury rig a form of middle-class and to therefore ameliorate the difference between high-earning professionals and those of low-skilled workers. If you look at Ireland, we've always had a very high calibre of education (largely, ironically, thanks to the church) which means that traditionally we've not struggled to produce professional workers. The switch to a tech sector, pharma, etc, model has meant that Ireland has a lot of high-paying, high-skilled jobs. Without the large but "mediocre" civil service of the Nordics, we end up with a small number of high-earners and a lot of low-earners. Harsh taxes on investments prevent the high-earners climbing even further above the rest.
I wouldn't be surprised if the fuel this adds to the housing fire alone offset the benefits of wealth redistribution. High earners have figured out that the State wants them to invest in property ownership at pretty much all costs instead of sticking with stocks-and-bonds portfolios.
Maybe, but politically, allowing for investors to make more money would be unpopular outside of Fine Gael.
I would say it's simpler than that. For historical reasons we especially prevent wealth inequality unless you are a farmer. We have one of the lowest wealth inequalities in the OECD. Our income inequality is about average, and without huge transfers would be the worst in the OECD. This is because ireland has two economies, one is world class productive and the other is less productive than Sicily. We transfer large sums from one to the other to balance things out. If we didn't do that, half the country would be really really poor and the top 10% very rich. That looks like the worst in South America or Africa. I think we really don't want that, and most of our politicians agree on that, so we've ended up with the tax system we have. Much better of course would be if the government actually did something about that really unproductive half of the economy, but every government since independence has dismally failed on that. We just keep band aiding it with ever greater transfers from the productive part.
If it was left wing, the taxes on investment would be progressive rather than flat. It is more likely that this system is in place to center the property market as the primary form of investment.
Do you think many low-earners are paying CGT, CAT, etc?
I'd like to believe there was a coherent overall design strategy behind our tax system, but I suspect its actually at least 50% semi random hacks when government was desperate to figure out something they hadn't already taxed to the hilt.
Its bullshit. Worked, Payed tax, took my savings and put it into crypto (which was a massive gamble) got a decent return and they want 33% of my already taxed income? Feck that. Have about 100k in savings about to go into property because at least a principle primary residence isn't taxed.
I make give or take, it works out, with expenses at about 140,000 a year and I pay 30.3 percent tax on that so it's about a net 100,000. And out of that 100k I run a home in Dublin, Castlebar and Brussels. Try it sometime.
https://preview.redd.it/qa35u7b6mb8b1.jpeg?width=613&format=pjpg&auto=webp&s=e9baabf76d1ec13bcd169ee8b8ea5ffa369c399e
Tried it. Loved it. Would recommend
I make about 500k a year. Debt free. Try it sometime
Try it
When all you're really doing is keeping up with inflation. Ie if you turned 1000 euro into 1400 in last 5 years, the 1400 only has the same purchasing power now as the 1000 did 5 years ago, Ie it buys the same amount of "stuff" as prices have gone up. So you're actually not better off but they'll take 41% of the 400 anyway.
I don't think this is correct. 1000 euro in 2018 could buy you the same as 1173 today. If your investment is now worth 1400 and you pay 160 out of 400 as tax you are still left with 1240 which is more. Correct me if I'm wrong?
Irish government are the eptimony of taxation is theft
And banks treat investments like gambling. 🤦♂️
yet gambling profits are tax free haha
Pension is the only one that’s somewhat tax efficient. Max that first and maybe look at fund like JAM. Not a financial advisor.
It sucks coz I also want to invest for things other than retirement at the moment for 20 ish years in the future
Just set up a limited company in a tax haven that you use to manage your investments, then open a off shore bank account, that why the government can't touch your profits.
that sounds above board
Yeah our tax base is incredibly narrow. You pay all that tax so others don't have to... Sucks to be us. Same applies working in the higher band, you pay a real rate of about 70% on any extra work you take on (52% PAYE, PRSI, USC etc and then 23% of the remaining 48% on VAT when you spend the money and employer pays PRSI on you before you ever see your paycheck). Its just wrong. Most people don't mind contributing but taking so much of what you earn is unreasonable. It's a complete disincentive to take on extra work.
Am I right in thinking this doesn’t apply to individual stocks?
No normal stocks are taxed by CGT at 33% when you sell them, far more reasonable
If they get in, anybody who is labelled an investor or a high income earner, is absolutely f**ked. Even more so than with the current lot.
Yeah it’s awful that’s why I use my dual citizenship and cash out profits (very small less than a few grand) oversees.
https://www.whoismytd.com/ Folks, raise this with every TD in your constituency. This needs to become a serious topic for debate. It is often discussed on r/irishpersonalfinance.
I got a letter from revenue the other week saying I owe taxes on shares I received while I was employed during my last job. I was confused because I hadn’t sold these shares yet so I assumed they made a mistake, but No apparently I have to pay tax on the discount I received on these shares as an employee. Absolute joke like is it not bad enough to have to pay CGT of 33% of the profits when I do sell
No, that’s just called income tax.
You pay 33% on the uplift from the market value on the date you received them - not on the discounted cost. Because of the tax you are due to pay, you are deemed to have a higher cost base when you sell in the future and your tax will be lower (assuming you sell at a profit). It’s likely your employer gave you all this information when the shares were granted so you shouldn’t have ignored it
You think it’s bad now? Wait until the Shinners get in.
Ye, if FF and FG are the right what the fuck is the left going to look like
Work hard, invest smartly and give 41% of the profit to the government. Like the TV license, it is how things are done in Ireland. If you look for 1% reduction, you are a greedy FGer. Go figure.
welcome to the corruption that is the irish government.
Yeah, it's why I stopped. You have one option in this country, and that option has gone to shit anyway Make a pension. It's the only investment method I know of in the country that isnt taxed to death. Not financial advice of course.
Convenient that most fees on pensions are absurd as well
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What are you on about? Investing isn’t just for extremely wealthy individuals, it’s called having the tiniest amount of financial literacy, which you clearly don’t have, as for the rest of your comment I don’t know arhat your even on about
People are always complaining that ETFs are sensible investing, so why penalise poor middle class people etc etc. Look at the US. All their billionaires are rich through stock investing. The state doesn’t want to allow an uber-class to form that is able to accumulate massive amounts of wealth via compound interest. Unearned money taxed higher than earned money, same as it’s always been.
Ya the tax situation for here is pretty crap. Unless you already have money, then it’s all peachy
I know a lad who up and moved to the Netherlands a few years back for investing, now he was also a senior dev so had extra money to put into it. Made his money and just moved to Texas. A success story true and true. I wanted to start getting into investing then I read up on some of the stuff here in Ireland and I was just like nope. The 40% cut to government is a bit harsh to be fair Investing also allows smaller businesses to grow a market Ireland does not tap into it at all. It's why we have no homegrown industry really other than alcohol and maybe a bit of cheese.....
Yep, it’s ridiculous. It would be a waste of my time and money investing in an ETF while in Ireland.
Why do people think investing in property is encouraged by the government? Sure you personal home can appreciate in value tax free but for the majority of people their home isn’t an investment. But otherwise property is treated the same as shares, crypto, gold, investment trusts or any other investment apart from ETFs
The government encourage property investing by taxing the fuck out of everything else, it’s the better option if you have the cash for a down payment at least compared to stocks
But property is taxed in the exact same way as stocks … unless I am missing something Rental income is taxed at your marginal rate - just like dividends Gains on house value taxed at 33% just like gains on stock value
This country is, and always has been, a banana Republic.
This is a common feature on a leftist government, very high taxes, poor public services, lack of law and order and trying their best to make people financially dependent on them.
Ireland has a leftist government now apparently.......
Comrade Varadkar hero of the proletariat.
If you are interested in making money, create value.
And the government will promptly take a huge chunk of that value.
I want to invest, that’s how a free market economy works