Joan Burton (Dublin West, Labour)
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150. To ask the Minister for Finance the studies his Department has undertaken in respect of the changes in residential property values and the re-examination of property taxation in 2019; and if he will make a statement on the matter. [39158/17]

Paschal Donohoe (Dublin Central, Fine Gael)
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Dr Don Thornhill was engaged by my predecessor in 2015 to consider the operation of the LPT, and in particular, any impacts on LPT liabilities due to property price developments. The terms of reference for the review required that it also have regard to the overall yield from LPT and its contribution to total tax revenue on an ongoing basis and the desirability of achieving relative stability, both over the short and longer terms, in LPT payments of liable persons. Dr Thornhill’s review was informed by the outcomes of a public consultation which received 51 written submissions.

In a contribution to the review, the Economics Division of the Department of Finance prepared estimates of the potential implications for taxpayer liabilities of price developments as a result of price increases since May 2013. This analysis indicated a large variation across the country in possible changes to tax liabilities and estimated that

- 48% of properties would remain in their original band and thus not generate any increase in tax liability,

- 35% of properties would have moved by one band,

- 10% of properties would have moved by two bands,

- The remainder (6%) would have moved by between three and six valuation bands

This illustrated the hypothetical situation that if a revaluation occurred in 2015 there would be significant increases in tax liabilities for some taxpayers, with the bigger band jumps occurring for properties valued in the higher valuation bands in May 2013. The analysis also indicated a wide degree of regional variation in band changes with the largest band increases, and as a consequence tax liability increases under current legislation, mainly occurring in the Dublin area.

Dr Thornhill’s review report was published on Budget Day 2015. His central recommendation was for a revised system whereby a minimum level of LPT revenues in each local authority area would be determined by Government, ideally having regard to the apportionment between local authority areas of the historic yield. This in turn would allow for the estimation of LPT rates for each local authority area and the application of these by taxpayers and Revenue. Local authorities could adjust this rate upwards by a factor of up to 15%. This new system was recommended by Dr Thornhill with a possible interim deferral of the next valuation date until November 2018 or November 2019.

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

I have consistently stated that my Department will consider issues relating to the implementation of other recommendations in the Thornhill Report in due course in line with the 2019 timeline. I can assure the Deputy that this work will be done in good time and that the Government will be make its position clear so that households will know well advance what its plans are for LPT. In that regard I consider it very important that the principle that formed a central part of the terms of reference for the 2015 review of LPT i.e., achieving relative stability in LPT payments of liable persons both over the short and longer terms, will inform our consideration of this matter.