Alan Farrell (Dublin North, Fine Gael)
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171. To ask the Minister for Environment, Community and Local Government if paragraph 3 (a) of Part 4 of the Local Property Tax (Local Adjustment Factor) Regulations 2014 means that local property tax rates, where they have been reduced by a local authority, will revert back to the full pre-reduction rate after a period of one year or if local authorities will have the ability to reduce the local property tax rate year on year; and if he will make a statement on the matter. [37362/14]

Alan Kelly (Tipperary North, Labour)
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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. This is the maximum allowable variation that can be applied by any local authority and is referred to as the "local adjustment factor" (LAF). 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. As the LAF applies to one year only, the rates revert back to the basic rate in subsequent years at which stage the matter is considered afresh.

There are certain factors that local authorities are legislatively bound to take into account when deciding whether or not to vary their LPT rates for a given year (expected income & expenditure, accumulated assets and liabilities and the impact of any variation on their local area). The decision is not one that can be taken without considering the financial implications as it will have a direct impact on the level of funding available to local authorities and, therefore, on their ability to discharge their statutory responsibilities.

The Local Property Tax (Local Adjustment Factor) Regulations 2014 set out the process for local authorities who wish to vary their LPT base rates, including the factors that they must consider and the type of public consultation that they should undertake as part of that process. Guidance has also been issued to local authorities concerning matters relating to these Regulations:

The power to vary LPT rates has been given to 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 rates will enable them to directly influence the level of LPT income they have to meet their expenditure requirements in the future.