It's impossible to say if councils are providing better local services
Published 06/09/2016 | 02:30
The burden of the property tax is among the most unfair levies introduced during the recession. A flawed model based on property prices, as opposed to the underlying value of the land the property sat on, it penalised people living in the cities and didn't result in improved public services.
And unlike in other countries, the tax does nothing to dampen price increases. As economist and author of the Daft.ie report Ronan Lyons says, in countries with higher property tax rates than the 0.18pc employed in Ireland, buyers are less likely to add an extra €10,000 to their bid without thinking, because they add significantly to their annual tax bill.
The ability of councils to adjust the rate by up to 15pc (up or down) is solely based on politics and not services. For 2016, 11 councils cut the rate between 1.5pc and 15pc. The Revenue Commissioners says this reduced overall yield by €25m.
It's impossible to know if councils are providing a better standard of service. The fact the sector has been starved of funds since the onset of the recession doesn't help. A 2014 report from the Comptroller and Auditor General set out how funding for roads, housing, libraries and other services had been whittled away over the years, dropping from €2.8bn in 2012 to €1.7bn in 2014.
Although a record number of people are now classed as homeless, funding new homes is reliant on the Government. Councils don't have the money to embark on a building programme from their own resources. Making meaningful comparisons in service delivery is also difficult. A report from the National Oversight and Audit Commission, which oversees the local government sector, says that in 2012, it took just over 24 weeks to re-allocate a home to a new tenant. In 2014, there was no change.
In the same period, the number of renting housing inspections dropped from 437 to 397. Fewer new buildings were inspected, but that information doesn't really tell us anything.
The LPT has not funded new services, but merely replaced Exchequer funding. Assessing whether councils are better at providing services, and more of them, since its introduction could be a useful exercise prior to the 2019 revaluation.