Decision needed on new property tax rate
Published 27/05/2014 | 02:30
INCOMING councillors will have to decide by next September if they intend reducing the annual property tax bill levied on homeowners.
Local authorities are entitled to increase or reduce the rate by up to 15pc for 2015 – but any cuts will have major implications for the delivery of essential services.
Anti-austerity candidates and Sinn Fein are bitterly opposed to the tax, but will increasingly rely on it to fund libraries, the fire service, public parks and building inspections.
The issue is likely to pose a major headache for these politicians, especially as cuts will have a larger impact on people living in expensive homes.
The tax is based on 0.18pc of the value of the property. If worth between €100,000 and €150,000, the annual tax is €225. A 10pc cut would yield a saving of €22.50 a year to the householder.
But if a house is worth between €250,000 and €300,000, the tax is €495 – 10pc would save almost €50.
New councillors will take their seats on June 1, and any change to the property tax – up or down – must be notified to the Revenue Commissioners by September 30 – just four months after they take office.
This is to comply with European Union rules that national budgets, including the proposed spend in local government, are published by October 15 every year.
The Department of the Environment said a cut in the tax could only be considered if it did not impact on the overall funding for the council – meaning if a reduced rate is introduced, savings would have to be found in other areas.
"The Local Property Tax Acts specify that there are certain factors that local authorities will have to take into account when deciding whether or not to vary their tax rates for a given years, including income and expenditure, accumulated assets and liabilities and the economic impact in their local area," it said.
"The decision is not one that can be taken in isolation as it will have a direct impact on the level of funding available to local authorities and, therefore, on their ability to discharge their statutory responsibilities. The financial implications of any decision to vary must be considered."