All's unfair in tax and mortgages
Published 09/12/2012 | 05:00
Madam – The property tax is the correct solution for raising revenues and can be bench-marked with other European countries. If Irish citizens are struggling with their double over-valued 2007 mortgages, then the not-fit-for-purpose mortgages must be restructured.
In 2007, buy-to-let mortgages were valued at 40 times the annual rent. Average homes were valued at 10 times the average wage. Built-in safety factors for borrowers were removed in favour of bank bonuses for lending staff.
Double-valued property was packaged and promoted as affordable to all. The Government colluded and looked the other way. The opposition of the day sat on their hands and did nothing.
In 2007, the Government received 40 per cent of property prices from all new developments, through taxes and stamp duty. This revenue paid for hospitals, schools, etc and has to be factored into restructuring.
Bank victims did not receive the over-valued mortgages from the taxpayer, so the costs should be levied from future bank profits, wages and pensions.
Park the false value portion (capital and interest) of the incorrectly valued mortgages and let the banks pay them off in 20 years' time when they are making profits again. This would answer the fairness solution for Enda Kenny and Michael Noonan.
Victims of the loan-shy banks would be back participating in the economy and meeting their real financial commitments. Bank rescue deposit money, which citizens are paying for, would be diverted back into the Irish economy.