Property tax overhaul to see some bills rise and bring post-2013 homes into net

A third of existing property tax payers face higher rate while 11 per cent face reductions

Homes built after 2013 will face inclusion in the local property tax, under plans approved at Cabinet today.

Under the existing terms of the tax, it is levied on property valuations from 2013. However, homes that were not built at that time do not have a liability as they do not have a valuation dating from then.

Minister for Finance Paschal Donohoe brought a memo to Cabinet this morning seeking to address the issue along the lines of commitments made in the Programme for Government.

Sources said the change will likely be enacted from next year, and would address the issue of around 100,000 homes not being eligible for the tax.


Sources said the valuation point for the tax will be November of this year.

It is understood that Cabinet was told six out of ten home owners will not be paying any more than they already do, while 10 per cent will see a decrease. However, in addition to the homes built after 2013 being brought into the net, an estimated 33 per cent of owners currently paying property tax will see it go up by one band and a smaller percentage – perhaps as low as 3 per cent – could an increase of two bands.

It is estimated that 11 per cent will go down a band, and 53 per cent will see no increase.

It is estimated the change will raise €560 million annually.

Mr Donohoe told RTE radio’s News at One programme on Tuesday “We are in a situation where the local property tax base has been broadly unchanged since 2013 and homes that were built since that point have not been paying local property tax.

“I believe it is important that all homes pay local property tax the same, it is tax for local services and what the Government agreed today is a plan to bring those homes into paying local property tax, but to do it in a way that is affordable for the country.”

The Minister explained that from November of this year all homes would be revalued, but it would be done in such a way that recognised the affordability challenges facing many families. Despite the fact that many properties would have significantly increased in value since 2013, Mr Donohoe said that most people would not face an increase any more than a single band width, which would be an increase of €90 per year. This would be because of changes in the calculation of band widths, he added.

Meanwhile, Cabinet was also told there will be a change to the system that redistributes some of the property tax outside the local authority limits.

Currently, 80 per cent of the monies raised are retained in the area, with 20 per cent sent to local authorities. From 2023 it is understood that 100 per cent will be retained in the local authority with central government making up any shortfall.

Property tax is levied at a rate of 0.18 per cent on the value of a property in a particular band; so a house worth €230,000 for example, is in the €200,000- €250,000 band, with the value based on the mid-point in the band.

The tax was introduced on a self-assessed basis, which means that homeowners submit their own valuation to Revenue.

When the tax was introduced back in 2013, the legislation exempted a number of homeowners including; first-time buyers; buyers of homes in ghost estates and those who built their own home.

It was estimated that around 5 per cent of all properties, or more than 100,000 were not eligible the tax due to these exemptions.