Richard Boyd Barrett (Dún Laoghaire, People Before Profit Alliance)
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51. To ask the Minister for Finance in the context of the budget 2017 process, if he is considering abolishing the local property tax and reverting to the direct funding of local authorities through progressive taxation; and if he will make a statement on the matter. [17504/16]

Michael Noonan (Limerick City, Fine Gael)
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The Deputy will be aware that in 2015, Dr. Don Thornhill, who chaired the 2012 Inter-Departmental Group which designed the Local Property Tax, conducted a review at my request to consider, and make recommendations, on the operation of the LPT, and any impacts on LPT liabilities due to property price developments.

 The Finance (Local Property Tax) (Amendment) Act 2015 gave effect to the postponement of the revaluation date of residential property for LPT purposes 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 arose from one of the recommendations of the review.

The postponement also gives sufficient time for the remaining recommendations in Dr Thornhill's report to be considered in full. Local authorities receive income from a variety of sources including grants from Central Government, Local Property Tax allocations, commercial rates and other locally raised charges.

Local Property Tax was introduced to provide an alternative, stable and sustainable funding base for the local authority sector, providing greater levels of connection between local revenue raising and associated expenditure decisions and making the taxation system less dependent on other taxes.

The Government decided that no local authority would receive less income from LPT in 2015 and 2016 than they received as General Purpose Grants from the Local Government Fund in 2014. This provides a level of certainty and stability in a time of significant change for the sector and will ensure that citizens will continue to receive an appropriate level of services from their local authorities.

It is a positive outcome from the policy of local retention of LPT that local authorities can use LPT proceeds to pay for local services which were funded by the Central Government in the past. This facilitates further implementation of the overall objective of the local government reform programme, which is greater devolution to the local government sector, through supporting enhanced local decision making on spending priorities.

My Department will be considering issues relating to the implementation of other recommendations in the Thornhill Review in due course. I also note that the Programme for a Partnership Government provides for the preparation of a report by mid-2017 for Government and for the Oireachtas, on potential measures to boost local government leadership and accountability.

I have no plans for the abolition of the Local Property Tax.