Councils given time to decide over property tax

Local authorities have been given six months to decide if they are going to cut, or increase, the property tax charged to households.

Revenue Commissioners will write to all city and county councils over the next two months to ask if they intend to exercise their right to vary local property tax by up to 15 per cent from next year.

Councils then have until September 30th to tell Revenue what level of cut, or increase, they intend to apply, if any. However, councils still do not know how much of the tax they will be able to retain locally and how much will go into a central pot.

Government policy
Minister for the Environment Phil Hogan last March said it was Government policy that from this year, 80 per cent of all property tax receipts would be retained in the local authority areas where the houses were based. The remaining 20 per cent would continue to go into a national pot and be allocated on a needs basis.

In October, he said "retention of a portion" of tax at source would not begin until next year. Last November, Mr Hogan's department told Dublin City Council while the Government had indicated an intention to move to 80 per cent retention of the tax, it was necessary to "defer specifying the proportion of the proceeds of the Local Property Tax to be retained in each local authority until 2015".

The city council currently gets an allocation of property tax, which is up to 50 times lower per person than some rural local authorities.

Portion
The council's head of finance, Kathy Quinn, yesterday told councillors it would not be possible to decide any change to the tax rate until the Government had specified what portion the council would be allowed retain. "Each local authority needs to know if they vary the local property tax, is the hit going to be taken nationally or locally? Is the retention going to be 80 per cent, 60 per cent, 40 per cent?" A meeting of city and county managers was yesterday told the issues of "variability and retention" would be dealt with by Revenue, Ms Quinn said.

Independent councillor Nial Ring said there may be no advantage to Dubliners if a cut was set before the retention allowance was known, as the Government "could just take it out the other side".