Ollie Crowe (Fianna Fail)

I welcome the Minister, Deputy Donohoe, to the House. He is a former member of the Seanad and I wish him continued success as Minister for Finance. I am standing in this afternoon for Senator Pat Casey who is attending the Council of Europe.

Having been a councillor for 11 years before becoming a Member of this House, I am very aware of the importance of the local property tax, both as a source of funding for local authorities and as a concern for homeowners, particularly in challenging times. As the Minister and Members will be aware, the local property tax was introduced in 2013 as part of a wider effort to broaden our tax base. The idea behind the tax was that it would provide a stable and a predictable level of funding to our local authorities and reduce our reliance on volatile transaction-based taxes, such as stamp duty. Over a decade on since the introduction of the LPT, I think even critics would have to agree it has delivered on those goals of broadening our tax base and delivering a reliable level of funding to our local authorities. It has become the lynchpin of local government funding, supporting the delivery of essential services we rely on every day. Whether it is the maintenance of our roads, footpaths, the upkeep of our parks and green spaces, or funding for our libraries, community centres and other local amenities, the funding delivered from the LPT is essential to those works.

Perhaps the LPT's most important aspect is it is a tax retained locally. The revenue raised in each local authority area is spent almost exclusively in that area, ensuring that communities see a direct return for their contribution. The principle of local accountability and local benefit is at the heart of the LPT system and one that the Bill seeks to strengthen. From my own experience on Galway City Council, it was very important we ring-fenced the money for certain projects in the three LEAs in Galway city in order that each person living in those areas would see the benefit. Of course, the LPT must adapt to changing conditions, as any tax must. As the Minister and all Members will be aware, property prices have increased substantially since the previous revision which was made in 2021. Data from the Central Statistics Office reflects this, showing that residential property prices have increased by over 20% in the past four years. In some areas the increases in residential property prices have been ever steeper than that. If the current system had been left in place, it would have led to homeowners facing a dramatic rise in their LPT, and that would have been neither fair nor sustainable.

The Government recognises this and has engaged with all stakeholders before publishing this Bill, which will ensure changes made to the system keep the LPT as fair and sustainable as possible. The Minister, Deputy Donohoe, referenced that the Bill widens the valuation bands by 20%. As a result, the valuation bands used to calculate the LPT will be expanded, allowing many homeowners to stay within their existing bands despite rising property values. As has been outlined, this key measure helps ensure the vast majority of homeowners, around 96%, will not experience an increase of more than one band in their LPT assessment. In fact, many will see no change at all. To give perspective, even though property values have gone up by roughly 24%, the broader bands and updated base rate of 0.0906% means that the typical increase in LPT for most households will remain under 5%. For properties valued below €1.26 million, the base charge will rise between 5% and 6%. This represents a relatively small adjustment consistent with the rise in property values and significantly below the rate of inflation. For higher value properties, the legislation ensures that the local property tax remains aligned with market values. Homes worth more than €2.1 million will be taxed based on their full market value, with graduated rates applied across the value brackets. This progressive structure is central to maintaining fairness in the system, ensuring owners of more expensive properties pay their fair share while shielding those with low or middle incomes from steep increase, which is correct, right and fair. I commend the Government on doing this.

A key element of the Bill is the establishment of a five-year valuation period from 2026 to 2030. This brings greater predictability and stability for property owners enabling them to plan their finances with more confidence. The next revaluation scheduled for 1 November 2030 will continue a consistent review cycle that reflects shifts in the property market without causing major disruption.

The Bill also tackles affordability by adjusting the income threshold for LPT deferral in line with current economic conditions. This ensures that individuals on lower incomes or with limited financial resources can still access the deferral options. These thresholds have been revised to account for inflation, wage growth and increases in State supports since 2021, an essential measure to prevent the LPT from becoming an excessive burden on vulnerable households.

Additionally, the Bill strengthens the roles of the local authorities by allowing them to increase the LPT rate by up to 25%, enhancing their ability to address local priorities. The existing cap of a 15% reduction remains in place. Crucially, any extra revenue generated through these adjustments will stay with the local authorities, ensuring that the financial benefits are reinvested in local services and infrastructure, directly benefiting communities across our country.

From a local perspective with regard to Galway, I know how important the funding from the LPT was for Galway City Council's budgets. I also recognise the strain householders were under in terms of their own finances. The local property tax has been instrumental in funding essential services across our city. It has supported the upkeep of parks, playgrounds, locals sports clubs and enabled the delivery of local programmes that strengthen our communities. It has also contributed to funding road maintenance and enhanced public lighting. Over the past few months I have heard from many constituents who value these services but are understandably concerned about the effects rising property values might have on their LPT bills. This Bill addresses those concerns head on by expanding the valuation bands and limiting the average increase to less than 5%. We are ensuring most homeowners in Galway city and county and across the country will see only a modest and manageable adjustment to their LPT liabilities and one that is fair and proportionate.

The revised deferral thresholds provide an essential safety net. No one should have to choose between paying LPT and covering basic living costs. The Government has been steadfast in its determination to protect the most vulnerable. This Bill is a clear reflection of that commitment. We live in most uncertain times and that means it is more important than ever to maintain a broad and stable tax base. It also delivers on commitments made in the programme for Government to promote fairness and stability in LPT payments, keep revenue in local areas and protect those on low incomes. This Bill meets all of those commitments. It is a balanced, forward-thinking and responsible piece of legislation that will benefit our communities for years to come. The core principles that shape the Bill are fairness, stability and local empowerment. By broadening the valuation bands, updating the deferral thresholds and applying progressive rates to high-value properties, we are ensuring the LPT remains fair and proportionate. On stability, the five-year valuation period brings predictability and allows homeowners to plan with confidence. When it comes to local empowerment, it enables local authorities to vary the LPT and retain any additional revenue. It also reinforces the importance of local authorities and local accountability.

I am proud to support this Bill and urge all Members to do so. It is the right step forward for homeowners, local authorities and the future of public services.