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Dublin: 2 °C Tuesday 20 March, 2018

So will the Local Property Tax be increased, or not?

And if there is an increase, what will it cost you?

Image: Watchara Ritjan via Shutterstock

THE LOCAL PROPERTY Tax is causing a bit of angst between Fine Gael and the party supporting its minority government, Fianna Fáil.

A spokesperson for Fianna Fáil has requested that no “hefty increases” be imposed on householders as a result of a review of the tax – but Minister for Public Expenditure and Reform Paschal Donohoe has given little assurances, and slightly hinted at increases to the annual tax after November 2019.

So quickly, let’s run-through the basics about the tax, why it’s being reviewed, and what kind of increases householders could be hit with.


The Local Property Tax (LPT), which came into effect in 2013, is a charge on all households in the State (owners are liable, but those who are renting are excluded).

The LPT is a self-assessed tax where the homeowner calculates the amount of tax they owe based on a rough estimation of the value of their property. You can see Revenue’s valuation guide for estimating your home’s worth here.

Depending on what property price bandwidth you fall under, you pay a set amount of tax. Here’s an example of house prices and their corresponding LPT rates:

Local Property Tax Source: Local Property Tax

Although the LPT is paid annually, the payment is based on the value of your property from March 2013, which in most cases would mean a lower evaluation and a lower tax rate than if it was evaluated at today’s market price.

House prices have been dramatically fluctuating for the past decade due to the recession, the property bubble ‘bursting’, and the demand and lack of supply of housing now.

Because house prices have been constantly rising in the past several years, politicians are concerned that the LPT could rise dramatically in November 2019, when the valuation date of March 2013 is to be reviewed by the government.

Brexit The Taoiseach has said he doesn't want to see an increase in the Local Property Tax based off inflated house prices. Source: John Stillwell via PA Images

In a letter to the Minister Donohoe, Fianna Fáil’s Cork TD Micheal McGrath said that householders were about to be hit by “hefty increases” if the LPT were to be based off current house price evaluations.

“…According to official CSO data, residential property prices have risen nationally by 60% since March 2013. In many cases this will result in households moving up a number of bands in terms of their liability.”

In his reply to the Cork TD, Donohoe said that the Department of Finance, which he also heads up, had compiled estimates of the effect a reevaluation would have if properties were evaluated based on their worth in 2015.

According to the department’s estimates:

  • 48% of properties would remain in their original band, thus not generating any increase in tax liability
  • 35% of properties would have moved by one band
  • 10% would have moved two bands
  • The remainder (6%) would have moved by between three and six valuation bands.

As we know, the minister acknowledged that there was a great disparity in the value of properties based on region, and cited a report that recommended the government set a “minimum level of LPT revenues” per local authority area.

The revenue generated from the LPT is intended to fund local authorities, so a reduction in the tax would mean either they would need increased funding from elsewhere, or reduce their expenditure.

As it stands, local authorities have the power to increase or decrease the LPT by 15%; recently, Cork County Council voted to keep the current tax rate, while Kerry County Council voted to increase it by 5%.

Fine Gael TD for Dublin-Rathdown Josepha Madigan, and Catherine Murphy co-leader of the Social Democrats, are also among those opposed to the LPT, with the latter lawmaker labelling it as a “form of wealth tax”.

Speaking in London after meeting with British Prime Minister Theresa May, Taoiseach Leo Varadkar said that he would hope the property tax wouldn’t be increased based off inflated house prices caused by the country’s housing crisis.

“There has been a very significant increase in property values, particularly in the greater Dublin area, but not just in the Dublin area, but I certainly don’t envisage, nor do I want to see, a sudden dramatic hike in property tax so we will be working hard to avoid that,” he said.

Today, he said that a working group had been established to examine the matter and that a final decision would be made sometime next year.

“The assurance I gave people yesterday was on foot of a question I was asked in London.  In answering that question, I acknowledged that without a change of policy or without a Government decision, some people would be facing a steep and sudden increase of the property tax in 2019, not just in the greater Dublin area but also in other many parts of the country.

I gave the assurance that people would not see sudden or dramatic increases in their property tax in 2019.

Paschal Donohoe has also assured those with concerns that householders would know “well in advance” of what the government’s plans for the LPT would be.

Read: One month out from the Budget, what can we expect?

Read: Landlords are evicting tenants and doing up their properties as a ‘back door’ around rent limits

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