Paschal Donohoe (Dublin Central, Fine Gael) | Oireachtas source

The Department of Finance engaged Dr. Don Thornhill in 2015 to conduct a review to consider and make recommendations on the operation of local proerty tax, LPT, in particular any impact on LPT liabilities owing to property price developments. Dr. Thornhill made a number of recommendations in his report. His central recommendation was for a revised system whereby a minimum level of LPT revenues in each local authority area would be determined by the Government, ideally having regard to the apportionment between local authority areas of the historical yield. This, in turn, would allow for the estimation of LPT rates for each local authority area and their application by taxpayers and Revenue. Local authorities could adjust the rate upwards by a factor of up to 15%.

The new system was recommended by Dr. Thornhill, with a possible interim deferral of the next valuation date until November 2018 or November 2019. The previous Minister for Finance subsequently proposed to the Government that the revaluation date for local property tax be postponed from 2016 to 2019. This postponement meant that home owners were not faced with significant increases in their local property tax in 2017 as a result of increased property values. The postponement also gives sufficient time for the other recommendations made in Dr. Thornhill's report to be considered fully by the Government.

The Finance (Local Property Tax) (Amendment) Act 2015 gave effect to the postponement of the revaluation date of residential property for LPT purposes and also to two of the recommendations in Dr. Thornhill's report, involving LPT relief for properties affected by pyrite and for those occupied by persons with disabilities.

I have consistently stated that my Department will consider issues relating to the implementation of other recommendations in the Thornhill report in line with the 2019 timeline. The Government will make its position clear so that households will know well advance what are its plans for LPT. In that regard, it is very important that the principle that formed a central part of the terms of reference for the 2015 review of LPT, that is, achieving relative stability in LPT payments of liable persons over both the short and long term, will inform our consideration of the matter.

My Department will consider work on this matter in the new year in conjunction with the Departments of Public Expenditure and Reform and Housing, Planning and Local Government and the Revenue Commissioners.

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