independent

Sunday 20 April 2014

If anyone should be paying property tax, it's the banks

Houses no longer represent wealth – they symbolise everything that went wrong for us as a nation, says Eilis Hanlon

Like most people, I was well into my 20s before I had a chance to get my feet on the property ladder. Before that, my earnings had been too intermittent, not to mention meagre, to make buying a house a realistic prospect; and even then, buying in the area where I lived back then wasn't possible. And I'm not talking Killiney Hill Road. This was the early Nineties, and the one-bedroom artisan's cottage I was renting in the Liberties already cost more in rent than I could really afford, and banks in those days actually offered mortgages based on a person's earnings rather than some figure plucked from the ether of fantasy and optimism.

Buying in Dublin was out of the question. The only way I could afford to buy was by moving back to my home town of Belfast. So that's what I did. It was pre-ceasefire, so house prices were still remarkably affordable in the North.

That first house cost me much less than most TDs claimed on average in expenses last year, but it was a good, solid redbrick terrace. I put in a kitchen, central heating, the usual.

A few years later, the value of the house had increased, so I traded up for a semi in a leafier area a bit farther up the road. The mortgage more than doubled, but it was affordable if we were careful. That meant no foreign holidays, no fancy car. Every penny we made was put into that house, because that was supposedly the sensible thing to do. And it was. If we'd stayed there, we'd be financially secure now.

But it had always been in my head to return to Dublin at some point. And this time I had the chance to do it. Not only had the property market been rising in Belfast since the ceasefires, but by that stage I'd also started writing a series of thrillers with my partner under the pen name Ingrid Black. That had provided a modest but decidedly not unwelcome lump sum and there was another contract coming up, as well as foreign sales. Banks by then were also practically throwing money at customers. Together it meant there was finally enough to make an offer on a

house within striking distance of Dublin. It meant spending every cent that I'd managed to save during my working life, and borrowing beyond my income limit, but houses were a solid investment. If my finances went pear-shaped, I could always sell up and start again with the proceeds.

Then came the crash.

In retrospect, it was probably insane to believe that house prices wouldn't fall. All I can say in my defence is that I thought I was doing the right thing, investing what money I had in a family home. It wasn't as if I was stockpiling apartments in Vietnam and developmental land in Albania. Like most people, I just got caught out by my own financial naivete, because I believed that the value of a house was a real thing which, not having a pension or a guaranteed income, I might be able to turn into money one day to pay for the kids to go to college or get their own foot on the property ladder.

I'm still luckier than many. I'm not in negative equity, as far as it's possible to judge. If I had to sell the house tomorrow, the bank would be paid off. That monkey would not be on my back. But every other cent that I put into that house, including thousands spent on building work and tens of thousands in stamp duty (a daylight robbery which still niggles at me to this day) will have vanished. Money that represented 20 years of thrift and hard work is gone.

If I'd breezed through those years lavishing my wages on holidays and restaurants and new cars and designer handbags, I'd be no worse off than I am now. In fact, I'd be better off, because I wouldn't still be throwing away a fortune in mortgage and interest payments on a house that isn't worth selling and which I can't even afford to heat properly through each bitter Irish winter. Best of all, I could've passed what are laughingly called the best years of my life with my feet up, watching TV, glass of wine in hand, instead of burning the midnight oil for years, literally years, writing novels in the delusion that it would make me more financially secure.

Don't get me wrong. I'm not complaining. I made a mistake, but it was my own fault and now I'll just have to live with it. There are also many people much worse off than me. I'm just saying that this responsible middle-class life hasn't exactly worked out as expected for many of us, and this is the context in which Finance Minister Michael Noonan's new property tax will be muscled in.

In an ideal world, a property tax would be a spiffing idea to raise much-needed revenue. But this isn't an ideal world. This is a country where houses have come to symbolise everything which went wrong for us as a nation.

Houses don't represent wealth anymore. They represent debt. How can you tax debt? If anyone should be paying a property tax, it's the banks. They're the ones who actually own the damn houses. The rest of us are simply coughing up to the men in pinstriped suits for the privilege of being allowed to squat in their properties until they decide they can make more money by calling in the loans.

That's what Michael Noonan and the rest of the automatons on the government benches seem entirely unable or unwilling to understand. To them, it's only a few hundred euro. Given the scale of the economic challenge, what's the big deal?

I'll try to keep the answer simple so that it can be grasped even by someone who's spent their entire career in Leinster House putting in annual expenses claims larger than the amounts which some of us borrowed to buy our first houses. You can't quantify the feelings that people now have about their homes and jot them all down in the ledger for Budget 2013. It's about real human emotion. Houses represent hope and hard work and sacrifice and regret and sleepless nights.

There are intense emotions involved in people's relationships with their homes, and you mess with them at your peril. If you're wise, you don't mess with them at all, but at least know what you're dealing with before commencing the battle. Trying to minimise the symbolic impact of being ordered to pay more for the very thing which has brought you to your knees simply adds insult to those who have already been injured enough.

Sunday Independent

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