Local Property Tax – 2017

Key Point

Eleven local authorities reduced the basic rate of Local Property Tax (LPT) for 2016. The cost of this reduction was over €36m. A similar reduction in 2017 would cost €36.8m.

Context

The revaluation of properties for the purpose of the Local Property Tax (LPT) will not occur until November 2019. The valuations taken in May 2013 have determined the tax liabilities for properties to date. This will remain the case up to 2019.

Elected members of each local authority must inform Revenue by 30 September 2016 if they intend to adjust the basic rate of LPT for 2017 by plus or minus a maximum of fifteen per cent. This decision is known as the ‘local adjustment factor’.

Revenue Reduction for 2016

Eleven local authorities applied a local adjustment factor for 2016. The other twenty local authorities applied the basic rate of LPT. No local authority increased the rate of LPT. The basic rates of LPT are 0.18% on valuation bands up to €1m, and 0.25% on the value over €1m.

The eleven local authorities’ reduced LPT for 2016 at a cost of €36m. The reductions ranged from 1.5% to 15%. Five local authorities chose to reduce their basic rate by the full 15 per cent allowed under the LPT Act 2012; these were the four Dublin local authorities and Clare. Table 1 shows the rate of reduction applied in each local authority in 2016 and the value of each reduction to their total LPT revenue.

Table 1 – 2016 Local Adjustment Factors

lpt-1-page-001

(Source: http://www.housing.gov.ie/)

Adjustment for 2017

If the eleven councils which applied a reduction to the LPT basic rate for 2016 were to apply the same reduction for 2017, total LPT revenue would be reduced by close to €37m. Table 2 shows the possible impact.

Table 2 – Local Adjustment Factor 2016 and possible Local Adjustment Factor 2017

lpt-2-page-001
(Source: http://www.housing.gov.ie/) [*LAF = Local Adjustment Factor]

Dún Laoghaire Rathdown’s reduction is worth the most relative to their Budget for 2016, at 4.6%. It is followed by Fingal (2.7%), South Dublin (2.1%) and Dublin City (1.5%). The value of reductions in 2016 was €36.0m. This will increase to €36.8m (+2.2%) if the same percentage reductions are applied by the 11 local authorities for 2017 as those made for 2016.

The four Dublin local authorities reduced the LPT by the full amount (15%) for 2016. If they were to apply the same reduction for 2017 it would result in a sizeable decrease in their LPT income of €30.1m 1 .

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Notes:
1 At the time of publication, Dún Laoghaire Rathdown and Fingal County Councils both voted for a 15% reduction, Longford County Council voted for a 3% reduction and Monaghan County Council voted not to vary the basic rate.

 

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