Michael Healy-Rae (Kerry South, Independent)
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1479. To ask the Minister for Environment, Community and Local Government to set out his views regarding increasing funding for local authorities through the residential property tax, thus allowing the reduction in the rates burden for businesses; and if he will make a statement on the matter. [33066/14]

Alan Kelly (Tipperary North, Labour)
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I expect the Local Property Tax to have multiple benefits, including providing a more sustainable and resilient system of funding for local authorities and, therefore, a sounder financial footing for the provision of essential local services. It will provide greater local scope for financial decision-making concerning service provision and, therefore, a strengthening of democracy at local level with a more active relationship between local authorities and local electorates.

Effective from 1 July 2014, local authorities may vary the rate of Local Property Tax (LPT) in their administrative area for the following year by up to 15% of the basic rate of the Tax. 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.

The Local Property Tax (Local Adjustment Factor) Regulations 2014 set out the process for local authorities who wish to vary their LPT basic rates, including the factors that they must consider and the type of public consultation that they should undertake as part of that process. As part of the public consultation process, local authorities must publish a notice inviting written submissions from the public in advance of a meeting to consider the setting of a local adjustment factor. This notice specifically welcomes submissions on the potential effects of varying the basic rate of the local property tax on businesses, individuals and local authority services.

I am aware of the pressures on businesses and the challenging economic environment in which many property and business owners are operating at the present time. Rates income is a very important contribution to the cost of services provided by local authorities and all rates collected within a local authority area are spent in delivering the public services which are required locally to create the environment in which businesses can prosper. Locally elected members adopt the annual rate on valuation (ARV) they consider necessary in order to provide the required services.

A key objective of the reorganisation of local governance structures is to reduce the burden on ratepayers and indeed taxpayers generally, by maximising efficiency. The new structures of local government, including the establishment of municipal districts, provide an opportunity to achieve a more coherent approach to rates and charges on a county-wide basis having regard to funding requirements and the need to support employment and business competitiveness.

It is a matter for each local authority to consider their overall financial position as part of their budget deliberations and make decisions in respect of the mix of income and expenditure that they consider most appropriate for the following year.