Richard Bruton (Dublin Bay North, Fine Gael)
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281. To ask the Minister for Housing, Planning, and Local Government the date from which 100% of the yield from local property tax will be retained within the county in which it is raised; and if he will list the extent to which local authorities intend to increase or decrease the tax yield by using their discretion to raise or lower the rate for each local authority. [47530/21]

Peter Burke (Longford-Westmeath, Fine Gael)
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Local retention of Local Property Tax (LPT) began in 2015 and since then the overall principles and allocation methodology have broadly remained the same. Currently, 80% of LPT is retained in the area it is collected, with the other 20% supporting equalisation for local authorities with LPT bases lower than their funding baseline.

The Programme for Government 'Our Shared Future', commits to bringing forward LPT reforms including providing for all money collected locally to be retained within the county. This will also be done on the basis that those counties with a lower LPT base are adjusted via an annual national equalisation fund paid from the Exchequer, as is currently the case.

The Finance (Local Property Tax) (Amendment) Act 2021 gives effect to a package of measures in line with the commitments in the aforementioned Programme for Government to address the future of the LPT. The Government has signalled its intention that the move to 100% local retention of LPT will be introduced over the 2023 and 2024 budgetary cycles. Any changes to the allocation process may be considered in that context.

In the meantime, LPT allocations for 2022 will provisionally be based on updated information regarding the 2021 yield, on a no change basis i.e. the 80:20 model. All other elements will also be based on 2021 figures, including the LPT baselines, the equalisation contribution and self-funding of housing and roads from surplus LPT. It is recognised that the yield will change following the revaluation and the matter will be revisited at that point.

Since 2015, local authorities have had the power to vary the rates of LPT in their areas by up to 15%. The power to vary LPT rates locally enables local authority elected members to directly influence the level of LPT income they have to meet their expenditure requirements.

When an authority decides to vary the LPT basic rate upwards (by up to 15%) it retains 100% of the resultant additional income collected in the local authority area. Likewise, when the rate is reduced, the authority forgoes the full amount of the reduced LPT income collected.

The Finance (Local Property Tax) (Amendment) Act 2021 does not change the extent to which local authorities can vary the local adjustment factor. My Department will publish details on the allocation, including the impact of variation decisions, in the coming weeks.