No changes to property tax until 2021, Finance Minister announces

The valuation date has been deferred from November 1 2019 to November 1 2020, meaning bills will not change until 2021.

There will be no change in Local Property Tax (LPT) until 2021, the Minister for Finance has announced.

Paschal Donohoe is deferring the revaluation date so the Oireachtas budgetary oversight committee can review a report into the tax, as he believes further scrutiny is needed to ensure relative stability for taxpayers.

The report was charged with examining the impact on the tax of property price developments since the May 1 2013 valuation date.

The valuation date has been deferred from November 1 2019 to November 1 2020, meaning bills will not change until 2021.

Speaking in Dublin on Wednesday, Mr Donohoe was forced to defend the decision and rejected the idea the deferral was tied to any upcoming elections.

“What I’m aiming to do is get this completed in a relative time frame,” he said.

“By taking a few more months to get this done, we will secure an LPT that meets the objectives I’ve described.

“It’s correct that the report says that continued referrals would undermine the integrity of the tax, so making a change at this point in relation to evaluation is going to be the most challenging one.

“This will not undermine the integrity because it’s a deferral of a single year and I am outlining what I want to do and where I want to take it.”

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Finance Minister Paschal Donohoe during the press conference at Government Buildings (Brian Lawless/PA)

The Review of Local Property Tax Report has provided five different possible scenarios for calculation.

Mr Donohoe said he was not married to any one scenario and was open to discussion with opposition, expecting to be back in June with a number of amendments, but noted he was leaning towards scenario five.

 

Scenario five increases all the valuation band thresholds by 80%, in which the midpoint of each band increases and the rate is reduced to leave the liability in each band unchanged.

Mr Donohoe was forced to defend this preference after it was noted this could especially benefit people with larger homes, such as in South Co. Dublin, the country’s most expensive area for property.

The Government’s failure to bring forward any reforms to the Local Property Tax is undoubtedly a decision taken for political reasons in advance of the upcoming local and European elections
Michael McGrath, Fianna Fail

“I’m not committing myself to any bands or thresholds,” Mr Donohoe said.

“The objectives that are laid out in the report, of a band widening combined with a single rate change, offers the prospect of insuring that any increases that were they to occur with the majority of people, will be of a single band.

“There is a model there that could be made work.

“This is a national tax, and I’m conscious of all competing demands.”

He added: “I know for lots of people what won’t be affordable, which is facing an increase of more than 200 euro and that happening from early next year.

“The model I’m trying to get to is that anybody who does experience a change, it’s a band change, but there’s an awful lot of complexity.”

Opposition party Fianna Fail said the failure of the Government to introduce any reforms to the tax would come at a particular cost to low income households who were not being given the option of deferring their LPT.

“The Government’s failure to bring forward any reforms to the Local Property Tax is undoubtedly a decision taken for political reasons in advance of the upcoming local and European elections,” finance spokesman Michael McGrath said.

“The Review Group recommends a 20% increase in the income thresholds to qualify for a deferral of the LPT.

“The group recommends that the current thresholds of 15,000 euro for a single owner and 25,000 euro for a couple be increased to 18,000 and 30,000 euro respectively.

“We know that in 2018 some 56,000 property owners with income below the qualifying threshold chose to defer their LPT payment.

“Many more wish to do so but cannot because their income is above the threshold. The Government has let them down.”

Press Association

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