The local property tax
Sir, – On September 9th, you reported that Dun Laoghaire-Rathdown Council voted not to increase the local property tax (LPT).
Contrary to some media reports and comments at the council meeting, the LPT was an issue in the recent local elections in the county.
I gave a commitment if elected not to increase the LPT, and I have honoured that commitment, by my vote, to my constituents. The council management also presented at the meeting an outline budget that indicated that current services could be funded from the current rate of LPT. Any proposed increase in service provision must then be reviewed to ensure it is cost-effective prior to seeking additional funding sources, increasing any charges or rates, to ensure we are delivering value for money to our communities. – Yours, etc,
Cllr MAEVE O’CONNELL,
Sir, – Jim O’Sullivan, who lives in Sligo, is concerned about inequity, discrimination and injustice (yes, all of these) arising from the fact that councils can increase or decrease local property tax bills by a maximum of 15 per cent from their base amounts (Letters, September 13th).
He instances the fact that Sligo County Council recently opted for the maximum increase while Dun Laoghaire-Rathdown (DLR) Council went the other way. Mr O’Sullivan calculates that this will result in the LPT on a band-five property being €150 per annum higher in Sligo than in DLR. This, he concludes, sees citizens paying more based only on where they live.
Valuation band five covers properties in the price range €250,000 to €300,000. A quick check on Daft.ie tells me that at this price level I could choose from a large number of detached homes in Sligo town with from three to seven bedrooms.
The check for Dun Laoghaire was even quicker – Daft.ie currently has one property for sale in this price range. It is a two-bed terraced house which the estate agent describes as charming, oozing potential and offering a blank canvas (gentle readers can do their own translation).
So if Mr O’Sullivan wants to avail of the €150 annual saving by living in a band-five home in Dun Laoghaire, he will find that his choice is somewhat limited and that he should leave the swinging cat in Sligo.
Mr O’Sullivan offers that allowing LPT to wither on the vine “has already eroded the so-called wealth tax intention”. I must concede that I wasn’t aware of that intent. I had thought that the purpose of the LPT was to provide a stable source of revenue to local authorities for the provision of services.
One of the features of LPT is that part of the revenue raised in areas with stronger property tax bases is transferred to an equalisation fund and distributed to other local authorities.
Official figures for 2019 show that Sligo was projected to raise €5.3 million from LPT and to receive a distribution of €6 million from the equalisation fund (in other words, home-owners outside Sligo contribute more through LPT to the financing of local services there than do Sligo home-owners).
DLR is one of the few local authorities which contributes to this equalisation fund. It is not too much to say that the occupant of the charming two-bed blank canvas in Dún Laoghaire is subsidising the provision of local services to the occupant of the seven-bed detached house in Sligo.
There may well be anomalies in the LPT regime but I’m not sure if the denizens of Sligo have grounds for complaint. Figures on the Sligo County Council website indicate that more than 93 per cent of homes in Sligo are in bands one to three (that is, are valued for LPT at less than €200,000) and that the owners of these homes will suffer an increase of less than €1 per week as a result of the 15 per cent increase. – Yours, etc,