Dubliners could face hike of 15% in property tax bill

Dubliners will be hit with a Local Property Tax (LPT) hike of 15 per cent if city councillors accept budget proposals from chief executive Owen Keegan next week.

City councillors last year voted to cut the rate of property tax for Dublin homeowners, the State’s biggest payers of the tax, by the maximum rate of 15 per cent for 2015, putting the liability at €65.9 million.

Mr Keegan will recommend that councillors do not apply the same cut next year, which would result in an increased bill for every homeowner in the council’s administrative area to a total of €77.5 million.

The change would mean a house valued in May 2013 at €325,000 with a property tax liability of €497.25 would next year have a bill of €585, while a house valued at €675,000 with a bill of €1,032.75 would see this jump to €1,215.

Mr Keegan said he needed the money to fund the council’s 2016 budget which would include more than €781 million in expenditure. That level of spending would not be possible if councillors cut property tax.

“My advice to the elected members is that a local adjustment factor not be applied to the LPT basic rate,” he said. “Each 1 per cent movement in the LPT liability results in a change in funding of €775,474.”

Almost 10 per cent of the council’s expenditure next year will be used to fund homeless services. Mr Keegan estimates the city will need to spend €70.8 million on this. In its 2015 budget the council had planned on spending €59.2 million, but by the end of this year it is likely to have spent just under €72 million.

Homelessness

However Mr Keegan said the additional property tax revenue would not be used to tackle homelessness. Minister for the Environment Alan Kelly had given assurances to fund the additional costs of homelessness in 2015 and 2016, he said. "Although written confirmation of the Minister's commitment has not yet been received I am entirely satisfied that the Minister's pledge will be honoured."

Instead Mr Keegan plans to spend the money on services including libraries, footpaths and pedestrian crossings, a “dog fouling blitz” and 1916 commemorations. “I consider it timely that the city council should approve a service investment programme, funded through the application of the basic LPT rate.”

Councillors must decide what rate of property tax to impose by the end of this month, but will be asked to make the decision next Tuesday.