Tuesday, 16 January 2018
Department of Finance
I propose to take Questions Nos. 174 and 177 together.
The Department of Finance engaged Doctor Don Thornhill in 2015 to conduct a review to consider and make recommendations on the operation of the Local Property Tax, in particular any impacts on LPT liabilities due to property price developments.
Doctor Thornhill made a number of recommendations in his report on his review of the Local Property Tax. 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 Doctor Thornhill with a possible interim deferral of the next valuation date until November 2018 or November 2019.
The previous Minister for Finance subsequently proposed to Government that the revaluation date for the LPT be postponed from 2016 to 2019. This postponement meant that home owners were not 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 Doctor Thornhill's report to be considered fully by the Government.
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 of the recommendations in Doctor Thornhill's report, involving LPT relief for properties affected by pyrite and relief for properties occupied by persons with disabilities.
I have stated consistently 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. The Government will 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.
My Department will advance work on this matter in 2018 in conjunction with the Departments of Public Expenditure & Reform, Housing, Planning & Local Government and the Revenue Commissioners. This review will involve a public consultation so that the views of all interested individuals and parties can be elicited.