The Help To Buy Scheme for First Time Home Buyers

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A Helping Hand onto an Elusive Ladder

We have spoken at length in the past about the multitudinous issues facing prospective first time home buyers in our current climate in Ireland. From saving deposits amidst paying skyrocketing rents, to being effectively written out of the narrative due to stricter borrowing rules and increasing home prices across the country. As a result it was recently reported that owning their own home has become more of a distant dream for many, rather than a feasible option for the future, with many saying that it would take them many years to save a deposit and even then they may not be able to afford the costs on current salaries. Rather than sticking with the unpopular opinions of recent months, of giving up avocado toast and living on your parents couch while asking for a loan of €30,000 we decided that today we would take a look at the more positive side of being a first time or prospective first time buyer. Believe it or not there are some options available to you out there, and we hope that access to these may make your dream more of a reality.

We all know about the all-important 10% deposit required to get your foot onto the first rung of the property ladder, as well as the additional funds required on top of these for legal costs etc. As mortgage relief is no longer an option, this all adds up quickly and when paired with every increasing house prices which don’t seem inclined to start falling any time soon, can lead to a number of hopeful buyers who simply cannot afford the costs. Whilst seeking a loan from a local authority may be an option for some, there is still the matter of a deposit to be raised and countless costs to be taken into account. The recent installation of the Help to Buy (HTB) Initiative may be a saving grace for some buyers, and has already helped many families find their new homes.

Essentially, the Help to Buy (HTB) scheme is an income tax rebate scheme now in place in order to help first time buyers buy new or self builds, and does not apply to second hand dwellings. This scheme allows buyers a rebate of their income tax paid over the previous 4 years as well as a refund of DIRT and will run until the end of 2019.

Naturally there are a number of stipulations on this as follows:

  • You must take out a mortgage of at least 70% of the cost of the property.
  • Applies only to properties costing €500,000 or less.
  • Applies only to new builds.
  • You must occupy the property for 5 years or more from the date it is habitable.
  • You must be fully tax compliant for the 4 years prior to your claim, complete a tax return form (Form 12) and pay any outstanding taxes that may be owed.
  • PAYE employees can apply using Revenue’s My Account system whilst self-assessed employees will apply through Revenue’s online system (ROS).

Should you have any queries or require further information on this or any other business or financial matter please don’t hesitate to contact us here at EcovisDCA’s new head office, where as always we will be delighted to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Should You Fix Your Mortgage Rate?

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Keeping that Roof above Water

We have spoken recently about the struggles facing prospective homeowners and their long term range of effects on the market at large. Something we haven’t touched upon thus far is the struggles facing those who already have a foothold on the property ladder, existing homeowners currently holding a mortgage. Whilst this may seem like the ideal status for those struggling to buy their first home, there are of course issues which apply here that may not be considered.

It has been reported recently that homeowners could see a marked increase on their mortgage bills in years to come. This is due to the fact that European interest rates are set to begin to rise from 2019 to 2020 as the European Central Bank is expected to increase its main refinancing rate. Depending on the rate of mortgage and the loan size, this could see mortgage payments possibly increase by a couple of hundred euro.

These European interest rates have been at a stable low for many years, with many homeowners likely to not have experienced excessive rises in their time. In the atmosphere of uncertainty as we wait for the confirmation of these changing rates, what action can be taken either on new or old mortgages to limit the amount of damage to your pocket?

Fix it Up:       

A fixed rate mortgage can often seem like the most expensive option on the surface when choosing your mortgage, but can be quite the saving grace at times like these when rates are in flux as this option fixes your mortgage rate at one price for a certain period of time.

Whether choosing your mortgage or switching, a fixed rate might be the perfect option during these uncertain times and may offer you a slight buffer.

Pay, Pay, Pay:

Although it can be tempting when funds are low to take out further loans to replenish emptying pockets, this is likely to be damaging in the long run as your repayments begin to stack up. Instead of this, it is advisable to keep your mortgage payments up to date, and even overpay whenever possible in order to reduce your overall term.

In addition to this, clearing off any other debts you may have from loans or credit cards is advisable as the goal is to reduce your monthly repayments to as few as possible, with your mortgage being the ultimate priority. This will avoid you paying higher interest rates on other loans as well as your mortgage.

Should you be in a position of struggle when these rises come into play, be sure to discuss with your provider and solicitor options for restructuring your mortgage in order to avoid any long term issues.

Should you have any queries or require further information on this or any other business or financial matter please don’t hesitate to contact us here at EcovisDCA’s new head office, where as always we will be delighted to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Revenue Clampdown on Airbnb Income

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Temporary Hosts – Permanent Fines

We have spoken at length about the so-called Revenue crack down, as Revenue continue to battle against evasion and fraud in all its forms. The latest to feel the Revenue wrath will be Airbnb hosts as Revenue have begun contacting hosts in writing regarding undeclared income.

Following on from the financial crisis, many individuals have sought additional income to offset the damage done by the crash. In addition, the ever-increasing cost of housing and cost of living we have recently discussed have left many with little option but to rent their properties out to cover costs and perhaps gain some additional income. Whilst this is a necessity for many, there has also grown over the past couple of years a penchant for the renovation of properties for use on short term rental sites such as Airbnb.

Airbnb can be a safe and convenient source of additional income for many, but has been seen as somewhat of a grey area for taxation purposes for some time, with many unaware of how to declare this income. Earlier this year it was announced that a number of Irish Airbnb hosts would be facing penalties due to a lack of awareness of how to declare their income from this source. It was revealed at the same time that quite a large number of hosts were not declaring the income as they may have been unaware of their requirement to do so. There are also a number of cost deductions which hosts are entitled to claim, but many were unaware of this also.

Luckily, Revenue have recently clarified this issue which will be valuable information for all of our clients and friends who are Airbnb hosts. In recently issued guidelines Revenue have stated the following in relation to Airbnb properties:

Rent a Room Relief can NOT be claimed on Airbnb lettings.

Airbnb lettings should NOT be treated as Case V rental income.

Airbnb lettings should in fact be treated as either:

  • Case I – Trading income for a property which is let frequently.

Or

  • Case IV – Miscellaneous income for lettings which are sporadic or occasional.

As Revenue continue to clamp down on evasion, non-declaration and general taxation issues, this is vital information for all Airbnb hosts in Ireland to be aware of going forward. As always we advise keeping thorough records and ensuring that you have all documentation to hand well in advance of your filing date.

Should you have any queries or require further information on this or any other business or financial matter please don’t hesitate to contact us here at EcovisDCA’s new head office, where as always we will be delighted to help.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

 

 

Knock Knock Knocking on Overpriced Doors

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We have spoken many times in recent years about the difficulties faced by prospective home owners, whether they be first time buyers or otherwise. The mortgage rules currently in place in Ireland can no longer truly be called ‘new’, and are unlikely to be changed drastically but continue to place heavy restrictions on prospective buyers. Recent reports suggest that it may in fact be keeping many prospective buyers off the property ladder permanently, if not delaying the process by as much as a decade.

A large part of the issue seems to exist independently from the mortgage rules, while house prices have risen exponentially in recent years (and are forecast to continue to do so for at least three more years with the possibility of reaching a housing bubble due to lack of supply to meet demand), the cost of renting has followed suit, meaning that many prospective buyers find it increasingly difficult to save the required 10% deposit due to both rental costs and the overall cost of the house they wish to purchase placing increased pressure on the hopeful buyer. A recent report by Threshold has found that of those surveyed, less than a third are happy to be renting. 71% of those surveyed are currently renting due to not being able to afford a mortgage in the current market. Similarly, it was found that 96% of tenants have found it incredibly difficult to find appropriate and affordable rental accommodation due to the increasing costs which often see families spending between one third and one half of their take home pay on rent. Many tenants have been renting for in excess of five years due to the lack of other options available to them.

Chair of Threshold Dr. Aideen Hayden has been quoted as saying the following about the current rental crisis:

“A home is not just where you live, it is a place of sanctuary, offering protection from the stresses and strains of daily living. The current insecurity for tenants in the private rented sector means that they can’t look ahead and plan, they can’t put down roots.”

Whilst demand for housing strongly outweighs supply currently, it has recently been speculated by Savills that the trend in supply is turning upwards which may lead to a more balanced market by 2021, meaning that there is still space for some good news in the future for prospective buyers.

Should you require any assistance or guidance on any business or personal finance matters, please do not hesitate to contact us here at EcovisDCA where we are always happy to help.

Taxation of Vacant Lots

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The vacant site register has become a hot topic of conversation in recent months as many of Ireland’s development firms have begun to fight back against their inclusion on the list. This register was introduced in 2017 in an attempt to deter the hoarding of land in areas that could be utilised for housing development. As we have spoken about recently, housing supply is running low as prices continue to soar so naturally the hoarding of land has become somewhat of a bone of contention.

One issue that development companies are fighting here is the financial cost. Once added to the register, the local council can issue levies of up to 3% of the site’s market value to the owner. The owner will then have 28 days to appeal their inclusion on the list, and failing this, appeal to An Bord Pleanála. This can of course add up to quite significant levies being applied, leading to a number of development firms currently fighting against their local councils to appeal their inclusion on the register including housebuilding giant Glenveagh Properties and Ziggurat, a big name in the student housing business.

According to studies completed by Fora, 39 cases have been appealed to the Board since the beginning of 2017, with 11 having come to an official decision, and only 3 being granted their wish of being removed from the list while 8 were decided to be kept on. Two of the overturned cases related to land owned by the Office of Public Works wherein it was decided that residential properties would not be an agreeable outcome for these sites.

Whilst the effectiveness has been called into question with so few councils taking the land hoarding situation seriously and what was described by Goodbody economist Dermot O’Leary as a “lack of urgency” it seems that there is still room for improvement. Recently, The Minister for Finance has appointed international economic consultancy firm Indecon to complete an independent review of the issue and begin to inform a new government policy in this area. There is currently a period of public consultation until June 29th, so be sure to make your voice heard if you have something to add, or other concerns regarding the taxation of vacant property. This is also an opportunity to suggest alternative options, should you have any in mind.

With housing in such short supply and with these issues being at the forefront of the public mind, this is sure to be an ongoing battle and concern. Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Signs of continued Economic Improvement?

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Hope is the thing with Euros.

Ever since the economic downturn, good news must be taken with a pinch of salt in terms of finances and the economy. Whilst we are somewhat used to the deluge of negative stories of ever increasing house prices as well as the general cost of living, we must also celebrate the good news, the positive stories and the numbers that inspire hope for the future of our small island’s finances. Particularly as more Brexit talks loom on the immediate horizon and there is a certain nervous and uncertain energy associated with the future, it is crucial to accept and celebrate whatever small victories are available to us at this time.

This month it was revealed that consumer spending has risen, which marks 14 months of continual growth for Ireland. Whilst the rise may not seem exponential, it is the fact that growth has been continuous for over a year that is important here for a country recovering from a severe crisis. This is vital as such sustained growth feeds into other aspects of the countries growth through fuelling job creation and boosting morale. The Visa Irish Consumer Spending Index suggests that payments of all kinds increased by almost 4% in April in comparison with the same time the previous year. This rise has been particularly evident in the area of online spending, which continues to soar.

This large spike in growth was in fact encouraged by March’s Storm Emma, which briefly dampened consumer activity and lead to a larger spike in April than expected. The unexpected snow storm meant that March saw a rise of only 1.5%. Some retailers have reported a decline in sales of up to 30% which has led to a lot of ground needing to be made up in the remaining months of the year for these retailers, many of which had to close their doors for a number of days due to the adverse weather conditions.

Whilst this increase is of course a move in the right direction for spending in Ireland, it is advisable to remain cautious as always as Visa have themselves reported that this level of growth “remains relatively subdued” perhaps due to the level of ground that needs to be made up following Storm Emma’s damaging effects. Cautiously optimistic may be the appropriate outlook for the coming months.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Data Protection, General Data Protection Regulation, EU, Law, GDPR

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As the deluge of GDPR and “we have updated our privacy policy” emails begins to slow down somewhat and the dust settles on these new regulations thundering into our lives, and following on from our recent post, we thought it might be a good time to explore some of the key concepts associated with the new General Data Protection Regulations. In relation to GDPR, what are the rights of the individual and what constitutes a breach?

Two key terms that you will see time and time again in relation to the new regulations are Controller and Processor. Essentially, the organisation is the Controller who is responsible for deciding what data is processed and in what manner. The Controller is also responsible for ensuring compliance. The Processor on the other hand is the employee or individual who acts on the behalf of the Controller, and may generally be the person who deals with personal data on a day to day basis.

The below are the key rights of the individual in relation to their personal data:

  • The Right to be Informed – All individuals should be informed that their data is to be stored.
  • The Right of Access – Individuals should be able to request a viewing of the personal details held on them. The organisation has one month to comply with this request.
  • The Right to Rectification – Individuals are entitled to request changes to data that is incomplete or incorrect. Again, the organisation will have one month to comply.
  • The Right to Erasure – This is not an absolute right, in that it is not a guarantee, but the individual has the right to request all data be wiped on them.
  • The Right to Restrict Processing – The individual can request that processing be put on hold until they can verify accuracy.
  • The Right to Data Portability – The individual has the right to obtain and re-use their data across different devices. The information must be accessible to them.
  • The Right to Object – All individuals have the right to request that the organisation stop processing their data immediately, unless the data is proven to have legitimate contractual or legal basis to be stored and processed.

The issue with living in such a fast paced digital age is that data is always at risk of being breached and with these new regulations, a breach can result in a serious breach of human rights as well as a fine of up to €20m or 4% of annual turnover not to mention a loss of client confidence and damage to company reputation.

Interestingly, in terms of GDPR, access is not the only form of breach. A breach can take the form of an incorrect email or postal address resulting in details being sent to the wrong person, the destruction of personal data without consent, or the ultimate loss of the personal data whether digitally or manually. All changes made to personal data need to be consented to.

It is advisable to appoint a data protection officer for this role who is independent and able to report any incidences to the Board without interference. Should a serious data breach occur, the organisation has 72 hours to report it to the Data Protection Commission, and it is advised that everything be reported, even if there are only suspicions of a breach.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

GDPR: What does it Mean?

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It would be impossible to have missed the impending GDPR (General Data Protection Regulations) being implemented recently on 25/05/2018 as we are all flooded with emails regarding personal data and it became almost impossible to do anything without being informed of a changed privacy policy. This is all good news however as the GDPR will now mean that there are more strict standards across the board and create a new level of trust across a single digital economy. With these new standards and requirements now in place, there will be no grace period for companies to be eased in to the new standards due to the fact that the announcement was made in April 2016.We have briefly spoken about the GDPR before it came into effect and thought that today we would talk about some of the main changes and actions to be taken going forward.

The GDPR contains a much broader definition of what constitutes personal data than that which exists in the Irish Constitution. Now, personal data will be defined as any information relating to an identified or identifiable living person. For example, online identifiers now constitute personal data. The new rules will apply to both automated personal data and manual filing systems. The advice here is to encrypt all personal data to a good standard as even anonymous data can be included depending on the ease with which the data can be accessed and combined with other identifiers. All personal data which is stored will now need to be done only after confirming consent of the individual. Consent must be freely given, verifiable and confirmed through affirmative action. A pre-ticked box on a website will not legally constitute consent. The only situations in which it is permissible to share personal data without having consent will be in cases of national interest, or in the case of counselling services for children. A new definition within the GDPR is that of ‘sensitive personal data’. This is data such as race, ethnicity, sexual orientation, trade union memberships, religious beliefs or medical information. There are stricter rules in place for these forms of data, a higher standard of consent is required here.

Accountability is a key area in which the GDPR differs from previous regulation. Organisations are now required to demonstrate compliance with all GDPR principles. The best course of action is to take precautions to avoid a breach of regulations. When handling personal data take extra care with both standard and sensitive information. When asked to disclose any personal data be vigilant and ensure you identify the authority as legitimate.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Revenue’s New ‘Digital Transaction’ Tax

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Tax for the Memories

Taxation is always a hot topic of conversation, particularly in recent months as Revenue have begun to clamp down on issues of taxation from non-filing and late filing to fraud. With Brexit continuing to cast a shadow of uncertainty over us here in Ireland, our focus moves more into Europe. Recently two new legislative proposals have been put forward by the EU Commission which could possibly have unforeseen consequences for Ireland.

These proposals relate to digital tax and aim to create a turnover-based tax in an attempt to provide both a long and short term solution for the treatment of digital tax transactions. Essentially, the proposals will involve a 3% tax on gross revenues of certain digital transactions based on the location of target customers, meaning that the targeted consumer area will be issued with a tax payment, creating a sort of symbiotic tax relationship between the country of origin and the country of consumption. An apparent win-win situation as both countries receive something positive whether a tax payment or the revenue from the endeavour itself.

To begin with, this will only apply to larger companies with turnover in excess of €750m worldwide, but it is hoped that in the longer term, these plans can apply to a wider range of companies. It has been suggested that the proposals are in direct contrast to the normal tax principles in that it applies to where customers are located as opposed to where the work actively takes place, and also doesn’t take into account whether the company is making any profits as it is generally based on gross revenues. It has also been suggested that it will be far more difficult to quantify as rather than the standard procedures, it will involve converting customer data and satisfaction into actual facts and figures for taxation purposes. This has been suggested as being somewhat damaging for the Irish market which has a long history of exporting. It has also been suggested that this could be damaging for Ireland as it somewhat diminished the value of our 12.5% tax rate as this digital tax becomes a cost for Irish companies. A reduction in the appeal of our tax rate could result in Ireland becoming a less attractive prospect.

It has also been suggested that these proposals could have adverse effects on competition and be economically damaging should these short term proposals be in place for longer than expected as a longer term solution is formulated. These proposals could potentially penalise smaller countries whilst rewarding larger, this would of course be damaging to Ireland. Perhaps the longer term solution will factor in the value both of the country of origin and the country of consumption, but both this and any adverse or positive effects remain to be seen.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY

Protect that Data

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In light of recent revelations in terms of personal data in the realm of social media, data protection issues have become more of a common topic of conversation. New changes this month will ensure that these issues stay a hot topic. In April 2016, after a lengthy period of debate and preparation, the General Data Protection Regulation (GDPR) was approved by the European Union Parliament. This new regulation is set to come into force on the 25th of May 2018 and any companies found to be non-compliant may face rather severe fines. With that in mind we want to ensure that all of our clients and friends are well informed so today we will be discussing the main topics of note ahead of this enforcement date.

In essence, the GDPR will replace the existing Data Protection Directive 95/46/EC and has been formulated in order to standardise data protection and privacy laws across Europe. The regulation is also intended to empower organisations to take data privacy increasingly seriously and to fully understand the impact this can have on a business.

Regardless of the location of your company, if you are an entity which offers goods, services or data exchanges to EU subjects then the GDPR will apply to your company. For our British neighbours, there exists a level of uncertainty with Brexit continuing to loom, for all businesses having dealings in data with the UK it would be advisable to apply the same rules to data coming to and from the UK as data staying within the EU. There will likely be legislation put in place which may stay in line with the GDPR but in order to avoid issues, it is advisable to treat non EU entities and their data in the same strict manner.

It is important for companies to make themselves aware of what actually constitutes personal data. In its most common form personal data is any information on an individual which could identify them. Anything from photos, bank details, addresses, certificates etc. can constitute as personal data for which there must be consent given for this information to be retained. If your company in any way deals with personal data, it is essential that new actions be taken to protect this data in the wake of these new rules.

Penalties for non-compliance can be as severe as fines of 4% of annual global turnover, with the most serious infringements carrying a maximum fine of €20million. There will of course be a tiered system in terms of infringements.

For further information, we recommend visiting the website of our friends at Chartered Accountants Ireland, where they have put together a concise and informative booklet which will discuss everything you need to know about the GDPR.

Should you require any help, advice or guidance on any financial or business matters, please don’t hesitate to get in touch with us here at EcovisDCA, where we will be happy to support you in getting your business to the next level.

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~ DCA PARTNERS, DECLAN DOLAN & EAMONN GARVEY