Property tax Q&A
Published 05/09/2014 | 02:30
What's happening with the property tax?
The Local Property Tax (LPT) was introduced to make homeowners help pay the cost of running their local authority. The €500m collected every year will replace central Government funding.
Under the rules, councils retain 80pc of the monies raised while the balance is surrendered to a central fund. This is re-distributed to councils, mostly rural, which do not have sufficient income from the LPT to fund services. In effect they are subsidised by councils with higher revenues.
Has money been redistributed to other councils?
Yes, some €220m. The highest top-up is for Donegal, of €13.9m, and Tipperary at €12.9m.
Why does this matter?
Twelve local authorities have received more in the LPT than they would have from central government. This allows them to adjust the rate by 15pc without impacting on services.
What about the other local authorities?
They can reducing the tax by 15pc, but at a cost of €22.16m. This means that savings of this amount have to be found before any tax reduction can go ahead.
How much is the cut worth?
The 'average' payment is €269 a year. A full 15pc hike would reduce this by €40.50 a year. A person living in a house valued between €500,001 and €550,000 pays €945 a year, so a 15pc cut would reduce bills by €141.75.
Is this finalised?
No. Councillors must decide if any changes go ahead before the end of the month. There's also the remote possibility that some may call for the tax to be increased, or remain the same,