Many homes will see increase in liability because of rising property prices
The Government’s approach to revising the property tax should be outlined by Minister for Finance Paschal Donohoe in next month’s budget, Fianna Fáil has said. Michael McGrath, the party’s finance spokesman, has written to Mr Donohoe asking him to outline the Government’s proposals on the issue.
The Local Property Tax (LPT) is based on home valuations that have not been updated since 2013. Another valuation update is due in November 2019, and many homes will see increases in their liabilities because of rising property prices.
Taoiseach Leo Varadkar has said Mr Donohoe will outline a three-year budget plan next month to “give people, to give business, to give organisations a little bit more certainty about what’s going to happen in the years ahead”.
Mr McGrath believes this should include what will be done to the property tax.
Valuations were supposed to be updated in 2016, but in 2015 the Fine Gael-Labour coalition decided to delay the revaluation date until November 2019, with the new tax levels taking effect from 2020. Mr McGrath has asked Mr Donohoe if his department has done any analysis of how increasing property prices would affect the total tax raised, as well as individual households. “While there may not be a legal obligation on you to address the issue in Budget 2018, I believe it is important for you to set out the Government’s approach to this issue in good time,” his letter says.
Mr McGrath further asked for a timeline on when decisions on updating the LPT would be made. “It is undoubtedly the case that, assuming no other changes to the LPT regime, many householders will face hefty increases in their LPT liability in 2020 based on new property valuations.
“Now is the time for the Government to properly examine how this issue can be dealt with fairly, and to provide some clarity and certainty to households as to what lies ahead for them. It is not acceptable that households would face a dramatic spike in their LPT liability overnight.”
A spokesman for Mr Donohoe declined to comment. A senior Government source, however, said that while the approach to the property tax would not be decided in this budget, future policy will likely be finalised by the middle of 2018.
During the Fine Gael leadership contest Mr Varadkar said the revaluation of property tax would allow the Government take a “proper look at it”. He indicated he favoured allowing councils to keep more of the tax raised in their areas, and giving them greater powers to vary the rate of tax.