Phil Hogan (Carlow-Kilkenny, Fine Gael) | Oireachtas source

Effective from 1 July 2014, local authorities may vary the rate of property tax in their administrative area for the following year by up to 15% of the basic rate of the tax. As Deputy Cowen said, the decision must be taken by resolution of the council and must be notified to the Revenue Commissioners by 30 September in order to apply for the following year.

There are certain factors that local authorities are legislatively bound to take into account when deciding whether to vary their property tax for a given year. These include expected income and expenditure, accumulated assets and liabilities, and the economic impact in their local area. The decision is not one that can be taken in isolation as it will have a direct impact on the overall level of funding available to local authorities and, therefore, on their ability to discharge their statutory responsibilities. The financial implications of any decision to vary must be considered.

The power to vary the rate of local property tax, LPT, has been conferred on local authorities to further increase their autonomy. Elected members are already responsible for finalising the annual budget of the local authority – it is a reserved function for them – and the power to vary LPT will enable them to influence directly the level of local property tax income they have to meet their expenditure requirements in the future.

I will make regulations in the coming weeks to set out the process for local authorities who wish to vary their LPT base rates, including the factors they must consider and the type of public consultation they should undertake as part of the process.

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