Money Guide Ireland

There was a bit of media and political uproar in Ireland over the recent PTSB mortgage rate rise.  With mortgage rates in Ireland at the lowest in years – how do the interest rates here compare with those available in other EU countries?

Figures compiled by the European Central Bank show the average rates available on loans for house purchases at “floating” (variable) rates in the Euro zone at June 2009
Average  Irish mortgage rates are shown as 2.68% .  We are amongst the lowest in the comparison. There are only  2 countries in the June 2009 survey with lower mortgage rates than Ireland. (Finland 2.51% ; Portugal 2.54%) . All the other 12 euro-zone countries have higher rates than Ireland.
The average mortgage interest rate for all the countries surveyed was 3.13%. The individual countries rates are shown below.
Finland 2.51%
Portugal 2.54%
Ireland  2.68%
Italy – 2.85%
Spain – 2.95%
Belgium 3.21%
Greece – 3.46%
Malta – 3.54%
Germany – 3.73%
Holland – 3.79%
France – 3.91%
Austria – 3.97%
Slovenia – 4.11%
Slovakia – 5.48%
Cyprus – 6.1%

At the peak of ECB rates in Sept 2008 (4.25%)  the average rate of mortgages in the Eurozone was 5.8% and the average rate in Ireland according to the ECB was 5.58%.
Rates in Ireland are 48% of what they were in September 2008 – whilst in France they are at 73% of the levels in Sept 2008. In Austria rates in June 2009 are 67% of the Sept 2008 peak.  Only in Luxembourg, Portugal and Finland have mortgage rates fallen more than in Ireland.
So maybe mortgage rates in Ireland do need to rise in line with some of the other EU countries? In the aftermath of the government guarantee the banks were falling over themselves to pass on rate drops in full after each ECB cut. Media coverage named and shamed those lenders that didn’t follow the pack. Maybe those cuts to keep in the good books were not sensible for the survival of the banks ?  It is likely that more rate rises in Ireland will happen soon – and hopefully the press will have moved on to a different story by then.

A new tax on Non Principal Private Residences ( NPPR.ie ) comes into effect in Ireland on 31st July 2009. The 2009 payments are due by 30th September 2009 .  One month’s grace is allowed – so any payments made after October 31st  will incur the penalty of €20 per month or part month.

The new “NPPR” charge is aimed at  property that anyone owns in Ireland that is not used by them as their principal residence. You do not have to own two homes to be liable for this charge. You could be living in a rented house while the home you own is empty or you have tenants in it. It is initially  going to be set at €200 a year and is to be used to help fund Local Authorities. The charge is the same for all properties – regardless of size, location or value. The Liability date for 2009 is 31st July – in future years it will be March 31st

The Local Government (Charges) Act 2009 is structured with a starting position of a universal liability for residential dwellings in respect of the charge. It then goes on to exempt certain buildings and owners from this liability.

The main exemption is for principal private residences. No person can have more than one sole or main residence. If you are renting a home and own another property – you are still liable for the NPPR. You don’t have to own more than one house to be liable.

Note : A property that is not suitable for use as a dwelling should not be regarded as dwelling within the meaning of the act . ( A temporary cutting off of the electricity or water supply does not make a property unsuitable)

Other Exemptions:

a) Properties are exempt if they are rented out as part of the RAS (rental accommodation scheme)  or rented to the HSE , or leased to a housing authority;
b) Where a person partly occupies a dwelling as his or her sole or main residence, and avails of and is entitled to the Revenue Commissioner’s Rent-a- Room Scheme, no liability for the NPPR charge will apply
c) Charities are exempt
d)Properies that are liable for commercial rates will not be laible for the NPPPr charge.
e)There is also an exemption for Newly Constructed but Unsold Buildings – that are vacant and  have never been occupied.

The new property charge  is to be paid to a body called the NPPR . You will be able to register your properties and pay the charges online at the nppr.ie  website by credit or debit card.
Property owners  will also be able to register and pay at your local council offices using an  NPPR registration form. The payment types accepted wil be credit card, debit card, bank draft, postal order and cheque.

Late Payment : if the NPPR  charge is not paid within a month after the last date for payment, a late payment fee of €20 will apply for every month or part of month that the €200 Euro charge remains unpaid.
The 2009 payments are due by 30th September .  One month’s grace is allowed – so any payments made after  October 31st  will incur the penalty of €20 per month or part month.
From 2010 the charge will be due before March 31st every year.
Landlords Note: Information from Revenue Dept  is that the €200 charge is not an allowable expense for calculating rental income.

About €40 million is hoped to be raised by local authorities from this new property tax – but the administration and IT costs of the collection systems required  will probably swallow up a lot of that income . It will be interesting to see how much of the revenue is actually used in collecting the new charge.

Property Registration:
It seems that the onus is on property owners to register any properties that are not their principal residence.  There is no national housing / address database in Ireland – so it is probably going to be difficult for the local authorities to determine which properties are actually non principal private residences.
The Local Government Charges Bill 2009 allows for the use of information from the Private Residential Tenancies Board , the Revenue department  and ESB to assist in the identification of non principal residences. There are probably many landlords who are not even registered with the PRTB – so there may be many rented properties that will be missed unless the owner voluntarily registers them.

Properties in the Rental Accommodation Scheme are exempt. There are also limited exemptions where a person is moving house and, in temporarily  owns two houses for a  short period.

Full details on www.NPPR.ie where you can register and make payments.

Tesco Ireland are still rolling out their new lower prices all over Ireland – but you can take advantage of the reductions wherever you live by shopping online at Tesco. You can also get up to €30 discount with these vouchers. There are three vouchers worth €10 euro each. They can only be used one at a time but are all valid until Oct 31st 2009. (Minimum spend €100)  EXPIRED.

See the current Tesco Special Offers and Discounts – Visit Tesco Ireland Here

NIB have made fairly large increases to  their fixed rate mortages today.
A 2 year fixed rate was available with an interest rate of  3.9% – but from today the same mortgage has a rate of  5.35% . That is an increase of 1.45 base points or a 37% increase. Similar increases on the 3 and 5 year fixed rates have also been introduced . The 3 year rate went from going from 4.1% to 5.8% and the 5 year fixed rate going from 4.4% to 6.45%. (a 46% increase !) . Is this a trend that other lenders are going to follow?  With PTSB starting the move towards higher variable rates – maybe the lenders are also going to move fixed rates higher also.

See the Best Fixed Rate Mortgages

Bank of Ireland are offering 6 months interest free credit on cash withdrawals with their credit card for new applicants who apply before October 30th 2009. BOI were already offering an introductory 0% credit on balance transfers and purchases – this added bonus may look more attractive – but beware of the 1.5% cash withdrawal fee (min fee €2.54) .

There is a danger that people may get carried away and use this interest free cash to buy stuff they don’t need. After 6 months – the full rate of interest will be payable – 17.4% APR.

It would not really be possible to make money by withdrawing the cash up to your credit limit and putting in into a deposit account paying 3.75% . After you take DIRT and the withdrawal fee into account you would only just about break even.

Anglo Irish Bank has lowered the interest rate on it’s Premium Demand Account from  3.6% to 3.1% .  The best on demand rate at the moment for amounts under 10k is from Halifax at 3.75%. For amounts over that – Nationwide UK has the best rate of 3.55%.

Anglo Irish has also re-introduced it’s 12 month fixed rate deposit account with a rate of 3.8%  – this account was withdrawn a few weeks ago. Rates on other fixed term deposits have also gone down at Anglo Irish – for example the 2 year fixed rate is now 3.25% and was previously 3.5% .

See the best Irish deposit rates here

Most Irish homes probably have a collection of old mobile phones hidden away in the bottom of a drawer somewhere . Your old mobile phones can be recycled – there are plenty of reusable parts in them. If your old handset is less than 4 years old you could get cash for it and play your part in helping the environment by recycling.
If you live in Ireland and your old mobile is working, has a battery, is of European or UK spec and is not barred – you can exchange it at Envirofone.ie for CASH. Payable by cheque or Paypal. (Or Argos Vouchers).

Residents of Northern Ireland and other UK residents can visit the UK Envirofone site here to get money for your old mobiles.

You can get an instant  price for your old phone online . You then just post your old phone (Freepost) to Envirofone who , after checking the condition , send you the agreed price. If you have phones that are more than 4 years old you can still send them FREE for recycling but you won’t get paid.

Another Tesco money off coupon for use up until 3oth September  2009. Get €5 Euro discount on your Tesco online shopping delivered on or before 30/09/09   -Expired

Latest Tesco Offers Here