Catherine Murphy (Kildare North, Social Democrats)
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266. To ask the Minister for Housing, Planning, and Local Government the formula that will be used to calculate the self-fund element for local property tax; if the final adjustment to the allocations made to local authorities will be impacted by the decision to reduce the local property tax by up to 15%; and if he will make a statement on the matter. [47990/22]

Peter Burke (Longford-Westmeath, Fine Gael)
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As committed to in the Programme for Government - Our Shared Future, the move to 100% retention of Local Property Tax (LPT) will take place in 2023. A move to this model will lead to an increased surplus for those authorities with LPT income above their funding baseline.

These authorities shall now retain a greater proportion of that surplus for their own use in 2023; an increase from 20% of the overall yield this year to 22.5% next year. The remainder of the increased surplus will be used to self-fund housing, roads or other services in the local area. The self-funding requirement will be based on the total expected level of LPT in each local authority area before any application of a local variation decision and will not be adjusted if the basic rate of LPT is varied.

Every local authority has the power to vary the basic rate of LPT by up to 15% and the decision to vary the rate is a matter for the local authority itself. If a Local Authority decides to vary the LPT basic rate downwards (by up to 15%), the resultant loss in LPT income is reflected in a proportionate reduction in discretionary income for the Council. Likewise, if a local authority decides to vary the rate upwards, there will be a proportionate increase in such income.

Catherine Murphy (Kildare North, Social Democrats)
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267. To ask the Minister for Housing, Planning, and Local Government the process that will be used to consider the amendments needed to the local property tax baselines; if it will include consultation; the timeframe being worked to; if it is intended in the interim to recognise new needs that have arisen as a consequence of population growth; and if he will make a statement on the matter. [48002/22]

Peter Burke (Longford-Westmeath, Fine Gael)
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Each local authority’s situation is complex and it is important that sufficient time is taken to analyse and assess potential options in that respect. A comprehensive review of the baselines could not commence in time for the 2023 Local Property Tax (LPT) allocation process without reliable and up-to-date data; such as preliminary census data and updated LPT yield data, following re-valuation.

However, in line with the commitment in the Programme for Government – Our Shared Future, some changes have already been made to the LPT Allocation model that will take effect from 2023, namely:

(1) 100% of the estimated yield will now be retained locally within the local authority area where it is collected;

(2) Equalisation funding will now be fully met by the Exchequer, to ensure that all authorities receive, at a minimum, an amount equivalent to their Baseline. This will be at a cost of €118m to the exchequer in 2023;

(3) Those authorities with a surplus, i.e. with LPT income above their baseline, shall now retain a greater proportion of that surplus for their own use; to a maximum of 22.5% of the pre-variation yield as opposed to 20% in 2022. The remainder of the surplus will be used to self-fund housing and/or roads services expenditure in the local area.

My Department intends to commence a comprehensive review of the LPT allocation model shortly, with a particular focus on the baseline funding of individual authorities. This review is expected to be concluded in time for the 2024 LPT allocations. It is intended to establish a working group comprising key stakeholders and, in course of this review, submissions will also be invited for consideration from other interested parties. Previous reviews and studies of local authority baseline funding will also be assessed and considered. It is intended that the updated census data, including population growth, will be taken into account in the context of this review.

It should be noted that LPT yield has remained largely unchanged following the 2021 revaluation by Revenue. Any additional funding requests for the Local Government sector must be agreed with the Department of Public Expenditure & Reform, and will be considered within the parameters of the national fiscal and budgetary situation, and the competing priorities presenting themselves currently at a national level.

Finally, the Department is aware of the current financial environment in which local authorities are now operating and, in recognition of the ongoing pressures, additional support of €60m has been recently secured to assist the sector. The purpose of this additional funding will be to assist local authorities in meeting the increasing costs involved in providing a wide range of services. This funding is additional to the contribution of €333m towards LPT equalisation, payroll and other miscellaneous schemes in 2023.