Shay Brennan (Dublin Rathdown, Fianna Fail)

I am grateful for the opportunity to address the House on the Finance (Local Property Tax and Other Provisions) (Amendment) Bill 2025. As a representative of Dublin Rathdown, I am acutely aware of the importance of the local property tax, both as a source of funding for our local authority and as a topic of real concern for homeowners and communities across the country. I wish to set out clearly why this Bill is not only necessary, but also fair, balanced and in the best interests of our citizens, local authorities and the future sustainability of our public services.

I will begin by recalling why the local property tax was introduced in the first place. The local property tax, established in 2013, was a critical reform in the wake of the financial crisis. It was designed to broaden our tax base, to provide a stable and predictable source of funding for local governments and to reduce our reliance on volatile transaction-based taxes, such as stamp duty. Since its inception, the LPT has delivered on these objectives. It has become the cornerstone of local government funding, supporting the delivery of essential services that every citizen relies upon every day. From the maintenance of our parks and green spaces to the upkeep of our roads, the provision of libraries, community centres and local amenities, the LPT underpins the very fabric of local life.

Perhaps the LPT's most important aspect is that it is a tax that is retained locally. The revenue raised in each local authority area is spent almost primarily in that area, ensuring that the communities see a direct return for their contribution. This principle of local accountability and local benefit is at the heart of the LPT system and one that the Bill seeks to strengthen.

As with any tax, however, the LPT must evolve to reflect changing circumstances. We cannot ignore the reality that property prices have risen significantly since the previous revaluation in 2021. According to the Central Statistics Office, residential property prices nationally have increased by approximately 24% over the past four years. In some areas, particularly outside of Dublin, the increases have been even more pronounced. Without reform, there would have been a sharp and sudden increase in LPT liabilities for many homeowners. This is an outcome that would have been neither fair nor sustainable. The Government has listened to these concerns and engaged with stakeholders, local authorities and the public to ensure that the system remains balanced, equitable and fit for purpose.

This Bill addresses these challenges head on. It contains a number of key provisions, each designed to ensure that the local property tax remains fair, proportionate and sustainable. First and foremost, the Bill widens the valuation bands by 20%. This means that the bands within which properties are valued for LPT purposes will be broader, allowing many homeowners to remain in their current bands despite increases in the property values. This is a crucial intervention that ensures that the vast majority of homeowners - an estimated 96% - will not see their LPT liabilities jump by more than one band. Many will see no change at all. To put this in context, while property prices have risen by approximately 24%, the widening of the bands, combined with the new base rate of 0.0906%, means that the average increase in LPT for most homeowners will be limited to less than 5%. For properties valued under €1.26 million, base LPT charges will increase by between 5% and 6%. This is a modest adjustment, one that is in line with property value growth and far less than the headline rate of inflation. For higher value properties, the Bill ensures that LPT charges are proportionate to their market value. Properties valued at more than €2.1 million will be charged on their actual value, with progressive rates applied to the different proportions of the property value. This progressive element is fundamental to the fairness of the system. It ensures that those who own more valuable properties contribute accordingly while protecting those on lower and middle incomes from excessive increases.

Another important feature of the Bill is the setting of the valuation period to five years from 2026 to 2030. This provides certainty and stability for property owners, allowing them to plan their finances with a certain degree of confidence. The next revaluation will take place on 1 November 2030, maintaining a regular cycle that reflects market conditions without causing undue disruption.

The Bill also addresses affordability concerns by indexing the income thresholds for LPT deferral. This means that those on lower incomes or with limited means will continue to have access to deferral options that reflect current economic realities. The thresholds have been updated to keep pace with inflation, wage growth and increases in State payments since 2021. This is a vital safeguard that ensures that the LPT does not become an undue burden on the most vulnerable in our society.

The Bill empowers local authorities by allowing them to vary the LPT rate upwards by up to 25%, giving them greater flexibility to respond to local needs and priorities. The downward variation remains capped at 15%. Importantly, any additional revenue generated from these changes will be retained by the local authorities, ensuring that the benefits of this tax reform are directly felt in local communities through improved services and infrastructure.

As a TD for Dublin Rathdown, I wish to speak directly to the impact of these changes on my constituency. Dublin Rathdown is a vibrant, diverse community that is home to families, young professionals, retirees and people from all walks of life. It is an area with a strong sense of community, but also one that faces real challenges, whether it is in housing, transport or the provision of local amenities. The LPT has played a crucial role in supporting local services in Dublin Rathdown. It has funded the maintenance and enhancement of our parks and playgrounds. It has supported local sports clubs and enabled the delivery of community initiatives that bring people together. It has helped to maintain our roads, improve public lighting and support the work of our libraries and community centres. I have spoken to many constituents who recognise the value of these services, but who are also concerned about the potential impact of rising property prices on their LPT liability. This Bill responds directly to those concerns. By widening the valuation bands and limiting the average increase to less than 5%, we are ensuring that the vast majority of homeowners in Dublin Rathdown will see only a modest adjustment to their LPT bills, one that is fair, proportionate and manageable.

For those on lower incomes, the updated deferral thresholds provide a vital safety net.

No one should be forced to choose between paying the LPT and meeting basic needs. The Government is committed to protecting the most vulnerable and this Bill delivers on that commitment.

I am aware that some in this House and, indeed, in the wider public have raised concerns about the LPT. Some argue that it is an unfair burden on homeowners or that it fails to take account of ability to pay. Others suggest it should be abolished altogether or replaced with an entirely different system. Let me address these concerns directly.

First, on the question of fairness, the LPT is a progressive tax by design. Those with more valuable properties pay more while those on lower incomes have access to deferral options. The widening of the bands and updating of deferral thresholds in this Bill further enhance the fairness of the system. The alternative of relying on transaction taxes or general taxation would be less predictable, less stable and ultimately less fair.

Second, on the ability to pay, the LPT is not only a tax on home ownership, but a contribution to the services that make our communities liveable. The updated deferral thresholds ensure that whose who genuinely cannot afford to pay are protected. The vast majority of homeowners will see only a modest increase and, for many, the benefits of improved local services will far outweigh the cost.

Third, to abolish the LPT would be to undermine the financial foundation of local authorities. It would mean less funding for parks, libraries, roads and community services. It would mean greater reliance on central government funding, reducing local accountability and local decision making. It would be a step backwards, not forwards.

On alternatives, some have suggested that the LPT should be replaced with a site value tax or another form of property taxation. While there is merit in considering the long-term evolution of our tax system, the reality is that the LPT is a well-established, well-understood and administratively efficient system. The changes proposed in this Bill build on that foundation, making the system fairer and more sustainable for the future.

It is important to situate the Bill within the broader context of our public finances. Ireland has made significant progress in recent years in restoring fiscal sustainability, reducing our debt burden and investing in public services. The LPT is a key part of that progress. It provides a stable, predictable source of revenue that supports local initiatives and reduces our reliance on more volatile revenue streams. In a world of increasing uncertainty, whether due to global economic shocks, climate change or demographic change, it is now more important than ever that we have a broad, stable tax base. The LPT is an essential part of that base and the Bill ensures it will remain fit for purpose in the years ahead. The Bill also delivers on the commitments made in the programme for Government, which promised to ensure fairness and stability in LPT payments, retain revenue locally and protect those on lower incomes. The Bill fulfils all of those promises. It is a balanced, responsible and forward-looking Bill that will serve our communities well.

I will turn to the principles that underpin the Bill, namely, fairness, stability and local empowerment. By widening the valuation bands, updating deferral thresholds and applying progressive rates to higher value properties, we are ensuring that the LPT remains fair and proportionate. Regarding stability, by setting a five-year valuation period and providing certainty for homeowners, we are ensuring the system is stable and predictable. Regarding local empowerment, by allowing local authorities to vary the LPT rate and retain additional revenue, we are strengthening local accountability and ensuring communities see a direct return for their contribution.

I urge all Deputies to support the Bill. It is the right thing to do for homeowners, local authorities and the future of public services. It is a Bill that balances the needs of today with the challenges of tomorrow. It delivers for the people of Dublin Rathdown and communities across Ireland. Let us work together to ensure the LPT remains a fair, sustainable and effective source of funding for our local authorities. Let us support the Bill and, in doing so, support the future of our communities.

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