Blog – McCarthy & Associates – Galway Talks, 16/07/2015

Issue: Central Bank warns institutions over people in mortgage arrears.
Comment: The Central Bank recently conducted a review of the adherence to the Code of Conduct for Mortgage Arrears by the banks. It found that there have been a number of breaches of the regulations. Unfortunately they have not named the banks involved but have warned these institutions that they need to adhere to the code.
Recent evidence suggests that a number of borrowers have felt intimidated when dealing with arrears and in some cases the banks have not followed the correct procedures.
It is important that the Central Bank continues to monitor this situation carefully in order to protect consumers.

Issue: Evidence suggests Central Bank regulations hindering the property market.
Comment: Unfortunately all of the negative predictions regarding the bank’s interference with the mortgage market, with the increase in the deposit requirements, have come to pass. The level of mortgages sanctioned in the first 6 months of this year has seen a considerable drop and this has had a knock on effect for the building industry.
Whilst the new regulations have been effective in cooling the property market, more importantly it has also hindered activity.

Question: Why is it that some investments are taxed at DIRT of 41% and others at Capital Gains Tax of 33%?
Answer: Most investments are deposit based and accordingly attract DIRT at 41%. Others such as Kick Out Bonds, in certain instances, are structured in such a way that the tax on any gains is at Capital Gains Tax rate of 33%.