Independent Alliance wants cap on Local Property Tax
Homes are to be revalued for the levy, with the amended bills taking effect next year
Minister for Finance Paschal Donohoe is to complete a review of the Local Property Tax by the end of March. Photograph: Dara Mac Dónaill
The Independent Alliance wants a cap on property tax bills to ensure no homeowner pays more than their current amount when reforms take effect next year. They are seeking this in tandem with a cut in the national rate of property tax levied.
A review of the Local Property Tax (LPT) is due to be completed by Minister for Finance Paschal Donohoe by the end of March.
The review was initially expected to be finished by last August, and then by the end of 2018, but it is now expected to be concluded in the first three months of this year.
Taoiseach Leo Varadkar on Monday said “the intention is not to dramatically increase the yield from the Local Property Tax” when homes are revalued for the purpose of the levy this November, with the amended bills taking effect next year.
The base rate is currently 0.18 per cent of a home’s value, but valuations have not been updated since the LPT was introduced in 2013, when property prices were much lower.
The 0.18 per cent rate applies on all homes with a value up to €1 million, with houses above that subject to 0.25 per cent. Councils have the power to adjust the base rates by 15 per cent.
The property tax is also organised by valuation bands and homeowners have to self-declare what valuation band their property falls within. For example, someone with a house valued between €450,001 and €500,000 pays a base rate of €855 per year. In this case, the 0.18 per cent rate is levied on the mid-point of that value band, ie €475,000.
Mr Varadkar told reporters the rate and the bands would be changed “so that people will see no increase or perhaps only a modest increase or perhaps a modest decrease in 2020 after revaluation”. The Taoiseach has also previously suggested that the exemption from property tax from homes newly built since 2013 will be abolished.
Sources in the Independent Alliance claim a cap on the tax paid is also needed in order to ensure nobody pays more than they do at present.
It is argued this will prevent people whose house values have increased to such an extent that they would still be levied with more tax, even with a cut in the rate, from paying more.
Minister for Transport Shane Ross has been pushing for exemptions from the property tax for “fixed income” pensioners, although the level of fixed income is not clear. Mr Ross has repeatedly focused on property tax in talks within the Independent Alliance and with Fine Gael.
Finian McGrath, Minister of State for Disability Issues, wants those with disabilities exempted too, although sources elsewhere in Government have previously expressed opposition to the requests on property tax from the Alliance.
It is understood the Alliance is due to meet Taoiseach Leo Varadkar on Tuesday to discuss their priorities for the year ahead. Another member, Kevin “Boxer” Moran, is said to be frustrated with the pace at which one of his favoured measures is progressing.
Mr Moran wants the Courts and Land Conveyancing (Amendment) Bill, which was approved by the Cabinet last July, implemented. The Bill seeks to make courts take a number of issues into consideration when making repossession orders.