Donohoe indicates minimal change to property tax

Any increases will be ‘moderate and affordable’ despite rise in property values

The property tax is currently calculated on 2014 property values. Photograph: Gareth Fuller/PA Wire

The property tax is currently calculated on 2014 property values. Photograph: Gareth Fuller/PA Wire

 

Minister for Finance Paschal Donohoe has given the strongest indication to date that there will be minimal alterations to the property tax when he reviews it at the end of this year.

Speaking at the weekend, Mr Donohoe told reporters that any increase or change in the tax would be “moderate and affordable”.

He also did not rule out the possibility that the current tax payments would stay the same, notwithstanding a substantial increase in property values since 2014. The tax is currently calculated on 2014 property values.

“When this issue developed earlier on in the year, particularly when the bills for the Local Property Tax [LPT] began to come into people’s homes in January, I said that my view regarding the changes in property taxes is that changes in the future should be moderate and affordable,” he said

“That continues to be my view. When I bring the Local Property Tax review to conclusion later on in the year, we’ll be outlining how we will do it.”

People’s bills next year will reflect the current valuation, the Minister said.

“We’re talking about changes that will take place from 2020 onwards. But they will be moderate, they’ll be affordable and they’ll be well understood by people in advance of that,” he said.

Mr Donohoe said it was too early to give a view on changes, if any, that will be announced in the Budget. He said he would be guided by the report produced by the Budget Oversight Committee earlier this year.

The committee began examining the LPT in December and came out strongly against the tax being levied against current home values, which have increased by well over 50 per cent in some areas in the past four years.

The tax was originally to be reviewed around the time of the last general election but the then government decided to freeze the home values on which the tax was based. At the time, there was no anticipation that house prices would experience such a dramatic rise.