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Income tax changes will benefit people and families in Kerry in 2022 – Griffin

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Income tax changes taking effect from January 1 will benefit people and families in Kerry in 2022, Deputy Government Chief Whip, Brendan Griffin TD has said.

Deputy Griffin said Fine Gael in Government is supporting average and middle-income earners to meet the rising cost of living through income tax changes. The tax package was announced by Minister for Finance Paschal Donohoe in October as part of Budget 2022.

Deputy Griffin said, “Fine Gael is on the side of the average and middle-income earner who is dealing with the rising cost of living. The tax changes announced by my colleague Minister Paschal Donohoe in the Budget, come into effect on the 1st of January and will benefit everyone who pays income tax, supporting people and families in Kerry.

“These are tangible changes that everyone will feel the benefit of in their pocket throughout 2022. The standard rate band for all earners will rise from €35,300 to €36,800 for single earners, from €39,300 to €40,800 for one-parent families; and from €44,300 to €45,800 for couples. There is also a €50 increase in each of the main tax credits – personal tax credit, employee tax credit and the earned income credit.

“There is also a change to the Universal Social Charge- the 2% rate band ceiling will increase in line with the increase in the national minimum wage from €10.20 to €10.50 per hour. This was the eighth increase in the minimum wage under Fine Gael in Government and we wanted to ensure that full-time workers benefiting from the increase will remain outside the top rate of USC.

“As well as the tax changes, Fine Gael also prioritised spending measures in Budget 2022 to help combat the cost of living and add to our quality of life. We introduced a €5 increase in Social Welfare payments across the board including disability payments, pensions and working age payments. The Fuel Allowance increased by €5 per week and the Living Alone Allowance increased by €3 per week.

“Fine Gael is committed to tackling the rising cost of living and the tax changes coming into effect this week will be felt by individual earners and families in Kerry.”

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Housing Will Never Be The Same

Last week I wrote about the pathetic investment options out there for Irish investors. Despite high ongoing fees (mortgage, maintenance, insurance etc.) and the actual headache of being a landlord, […]

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Last week I wrote about the pathetic investment options out there for Irish investors.

Despite high ongoing fees (mortgage, maintenance, insurance etc.) and the actual headache of being a landlord, it’s easy to see why real estate functioned as the de facto investment portfolio for an entire generation.

Wealth creation was a rinse-and-repeat function where couples put money away until they had enough for the ‘next house’. As a result, we have an economy where 70% of household wealth is tied up in real estate.

Driven by the profits it created, Ireland became obsessed with owning real estate.

But real estate as an investment won’t be nearly as successful for our generation. (If you are able to get a house, that is)

All you have to do is look at the anecdotal evidence all around us to confirm this.

My parents bought the house they currently live in for 30k (pounds) 35 years ago. The house is now worth roughly 450k.

I typically despise these back-of-the-envelope calculations when It comes to property, given the endless variables and ongoing costs involved, but bear with me.

That’s a gross return of 15 times the original value. Now there are upgrades, a change in currency and other adjustments to consider here, so for argument’s sake, let’s call it 10X.

To achieve the same level of growth over the next 35 years, you would be left paying 4,500,000 euros for what is a pretty modest house.

Sure, we will still see property prices increase over time, but the rate of growth won’t be anywhere near as meaningful for one simple reason.

Interest rates.

Artificial Growth

Over the last 30 years, real economic growth has been stagnant, yet Ireland has experienced enviable nominal growth.

How did we manage it?

We created imaginary wealth.

We pushed interest rates lower and lower to stimulate economic growth.

And it worked.

After all, if you make 100k/year you can probably afford a 400k mortgage at 4%. At 2%, with the same 100k/year salary you can now take on 600k in debt.

So, were we getting richer, or was the debt just easier to afford?

Where do we go from here?

We have now squeezed interest rates as low as they can go.

The house price appreciation we have seen was justifiable because the mortgage rates on housing continued to fall in recent decades. This allowed people to take on more debt without severely impacting their ability to repay that debt.

If we go back to my parents, they were paying 14% on their mortgage. Mortgage rates are currently between 2 to 3%.

A relentless drop in interest rates gave way to higher and higher prices for houses, but interest rates are now on the floor.

The juice has been squeezed.

In fact, the trend has started to reverse, with rates expected to rise 1.5% in the first half of 2023

Be mindful that the same credit expansion cannot happen again.

How the next generation thinks about their investment options has to change.

Banks offering 0% returns for the use of your money and a housing ladder you can’t get on are not your only two options.

If you need help creating your own investment portfolio, just reach out to me at mike@theislandinvestor or simply scan the QR code above.

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Biddies performance celebrates St Brigid

Two local Biddies groups performed at Muckross House as part of St Brigid’s Day celebrations in aid of Kerry Parents and Friends Association. The Killarney Parents and Friends Biddy Group – formerly […]

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Two local Biddies groups performed at Muckross House as part of St Brigid’s Day celebrations in aid of Kerry Parents and Friends Association.

The Killarney Parents and Friends Biddy Group – formerly known as the Beaufort Biddy Group – and Kilgobnet Biddies came together for the event.

The tradition of the Biddies is one of the oldest and most colourful customs in Ireland, a blend of pagan and Christian pageantry, held on February 1 each year, heralding the beginning of springtime and honouring St Bríd the patron saint of the farming community.

Master traditional craftsman, Pat Broderick, at Muckross House, was also part of St Brigid’s Day celebrations, making a St Brigid’s Cross as part of the traditions.

 

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