Written answers

Thursday, 14 January 2016

Department of Finance

Property Tax Administration

Photo of Peadar TóibínPeadar Tóibín (Meath West, Sinn Fein)
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29. To ask the Minister for Finance if he has carried researched the likely increase in local property tax that will be faced by liable residents if this tax is not abolished and if the deferral of valuations for the purpose of the tax is not renewed in 2019. [1336/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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I am very conscious of the concerns of homeowners over increasing property prices and the effects this will have on their Local Property Tax (LPT) liabilities, particularly in urban areas.  For this reason I asked Dr Don Thornhill to review the operation of the LPT and, in particular, any impacts on LPT liabilites due to recent property price developments. Dr Thornhill's review has been published and is available on the Department of Finance website.

In the course of the review, the Economics Division of the Department of Finance prepared estimates of the potential implications on taxpayer liabilities of price developments as a result of price increases since May 2013.  The paper prepared by the Economics Division is included in Dr Thornhill's report at Chapter 7.  I can confirm that the discussion and analysis undertaken in the course of the review did not, however, take account of projected price movements after that date.  This was because residential price movements show considerable volatility not just from year to year but quarter to quarter. Any forward projections would be highly conjectural and run the possible risk of providing a poor basis for policy making.

The Finance (Local Property Tax) Amendment Act 2015 was enacted in the last Dáil term. Among other things, it defers revaluation of properties for LPT purposes from 1 November 2016 to 1 November 2019; self-assessed valuations for properties made by homeowners as of 1 May 2013 stand for a further 3 years, until 1 November 2019, and this means that home owners will not be faced with significant increases in their LPT in 2017 as a result of increased property values. This arises out of one of the recommendations of the review. 

Issues relating to the implementation of other recommendations in the Report will be a matter for consideration by the next Government.

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