Written answers

Wednesday, 20 April 2016

Photo of Finian McGrathFinian McGrath (Dublin Bay North, Independent)
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102. To ask the Minister for Finance to review the local property tax in order to make it a fairer system (details supplied); and if he will make a statement on the matter. [7436/16]

Photo of Michael NoonanMichael Noonan (Limerick City, Fine Gael)
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Revenue provides a wide range of payment and phased payment options that allow property owners to meet their Local Property Tax (LPT) obligations in a manner that best suits individual circumstances. One of the available phased payment options is Deduction at Source from ten separate payment schemes operated by the Department of Social Protection (DSP).

The Deputy should note that deductions are not taken from Jobseekers Allowance as the temporary and intermittent nature of the allowance could result in shortfalls in the amount of LPT deducted leaving property owners with outstanding liabilities at year-end.  Also, the concept of a de minimis welfare payment from the Department of Social Protection (DSP) is enshrined in social welfare legislation and deductions that would have the effect of reducing a person's take-home amount to below the minimum weekly rate of supplementary welfare allowance, currently €186 per week, cannot be made. In regard to the operation of "deduction at source" (DAS) from DSP payments, it has been ensured, through ongoing dialogue between Revenue and DSP officials, that individuals impacted by the €186 threshold are given early notification that Local Property Tax (LPT) payments cannot be deducted and alternative payment methods are put in place.

In cases where LPT cannot be deducted from DSP payments, there are other phased payment options available to assist property owners in spreading the liability over the course of the year. These options include monthly Direct Debits through banks and certain credit union accounts and flexible payments through four approved Payment Service Providers including An Post, Payzone, Omnivend and PayPoint. Each of these service providers applies various transaction charges that are outside of Revenue's control.

The option to defer payment of LPT is provided for in Part 12 of the Finance (Local Property Tax) Act 2012 (as amended) including full Deferral and Partial Deferral (50%) of LPT liabilities for property owners meeting certain conditions including 'Income Level', 'Hardship', 'Personal Insolvency' and 'Personal Representative of a Deceased Person'. The income threshold for a full deferral is €15,000 (single person) per annum and €25,000 (couple) per annum and for a partial deferral is €25,000 (single person) per annum or €35,000 (couple) per annum. These thresholds can also be increased by 80% of any gross mortgage interest payments. However, 'Deferral' and 'Partial Deferral' are not exemptions and the tax becomes payable at a later date and carries an annual interest rate of 4%.

Any property owners who wish to apply for a 'Deferral' or 'Partial Deferral', can access their records online at and amend the payment instruction as required. Alternatively they can contact the LPT Helpline at 1890200255 where an agent will confirm any balances due and assist with making alternative payment arrangements, including Deferral/Partial Deferral as necessary.

I engaged Dr Don Thornhill to consider the operation of the Local Property Tax, in particular, any impacts on LPT liabilities due to recent property price developments.  In his report on his review of the Local Property Tax - which was published on Budget Day 2015 - Dr Thornhill made a number of recommendations including that the existing deferral provisions should be continued and be reviewed and revised at frequent intervals. Dr Thornhill also recommended that for owner-occupiers over 80 years of age or those with stated certified long term illnesses and disabilities who are living alone, consideration be given to raising the income limit for deferrals to €20,000.

In my Budget 2016 statement, I announced that I would be proposing to Government that the revaluation date for the LPT be postponed from 2016 to 2019. This postponement means that home owners will not be faced with significant increases in their LPT in 2017 as a result of increased property values.  The postponement also gives sufficient time for the other recommendations in Dr Thornhill's report to be considered fully by the next Government.

The Finance (Local Property Tax) (Amendment) Act 2015 gives effect to the postponement of the revaluation date of residential property for LPT purposes, and also to two of the recommendations in Dr Thornhill's report, involving LPT relief for properties affected by pyrite and relief for properties occupied by persons with disabilities (recommendations numbers 11 and 12 respectively).

As I have indicated, issues relating to the implementation of other recommendations in the Report will be a matter for further consideration.

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