Possible rise in Local Property Tax will only be 'modest', Taoiseach insists
Homeowners will face only modest increases in their Local Property Tax (LPT) bills if at all, Taoiseach Leo Varadkar has said.
Speaking on Monday in Dublin, Mr Varadkar made it clear that a sharp rise in house prices will not lead to spikes in LPT bills from next year.
He confirmed the Government will adjust the tax bands and adjust the rate so that either people have no increase at all or any increase in the cost.
“But a lot of people feel that because house prices have increased by 50% or more than that in the last couple of years that that means Local Property Tax will increase by that much. It won’t. We will adjust the bands and adjust the rate so that either people have no increase at all or any increase in the cost and that won’t happen until 2020,” he said.
Were the Government not to amend the rates and bands, homeowners would face increases of between €200 and €1,000 depending on the value of their properties.
Controversy arose yesterday when Culture Minister Josepha Madigan broke ranks and called for LPT charges in areas with high house values. Her Dublin Rathdown constituency would include some of the most valuable houses in the country.
Mr Varadkar said the way the property tax works is it’s based on the value of the house and we don’t intend that to change. Local authorities have the power to vary property tax upwards and downwards and we don’t propose that to change either, he said.
I know a lot of people are concerned that because property prices have recovered so much in the past couple of years that that’s going to mean a big increase in property tax in 2020. That’s not the case,” he added.
“Obviously we’re examining the changes that we need to make but the intention is not to dramatically increase the yield from the Local Property Tax. So we’ll have to make changes in the bands and changes in the rate as well so that people see no increase or perhaps only a modest increase or a modest decrease in 2020 after the revaluation,” he said.
Meanwhile, local county councillors should continue to decide the level of local property tax (LPT) each area pays, according to Communications Minister Richard Bruton. Mr Bruton said the Taoiseach and finance minister have “long ago signalled” that there will be no big increases this year when asked did he agree with Ms Madigan.
He said the way the property tax is designed, it is the local authorities in each area that have discretion over the rate and can modify it by increasing or lowering the tax by 15%.
He said it is his view there won’t be “much deviation” from that, however, he said the review will determine if the role or discretion of the local council will be “enhanced” in the future.
On Sunday, the Independent Alliance who are part of the coalition government warned that its ministers will “vehemently oppose” any suggestions of an increase in Local Property Tax in 2020.
“As partners in government, we welcome the recent statement from the Taoiseach indicating that Fine Gael supports our position on this. We have made our opposition to any increase absolutely clear in our submission on the Local Property Tax Review,” the statement said.
