Thursday 25 December 2014

Councils fear cuts in other areas will hit property tax surplus

Niall O'Conno

Published 09/07/2014 | 02:30

Councils are afraid cuts in other areas will hit their property tax surpluses
Councils are afraid cuts in other areas will hit their property tax surpluses

A NUMBER of local authorities have sought clarity from the Government over whether their property tax surplus will be cancelled out by cuts to other areas, the Irish Independent has learned.

Council officials have warned local representatives that they now cannot guarantee whether proceeds generated by the property tax will be retained to improve local services.

While there was an expectation among councillors in over a dozen local authorities that they will have the power to reduce the tax rate by 15pc, council officials have refused to confirm that this is the case.

The issue is particularly relevant in Dublin, where property tax prices are higher than the rest of the country.

Government sources have now confirmed that a number of local authorities have contacted the Department of the Environment seeking clarity on the issue. Council officials have requested to know whether 80pc of the proceeds from the tax will be retained locally before any instruction is issued to councillors.

In correspondence from head of finance at Dublin City Council, Cathy Quinn, it is confirmed that the council does not yet know whether the money will be diverted to local services.

Clarity

The correspondence, seen by the Irish Independent, states that clarity surrounding €80m of funding is being sought.

"Should the minister confirm the 80:20 apportionment of Local Property Tax receipts of 80pc held locally and 20pc held centrally for redistribution, then €64m would be retained by DCC with €16m being held centrally," Ms Quinn said.

"Dublin City Council is awaiting clarity on whether other government grants (which broadly total in 2014 to €80m) would be affected by arrangements around the LPT."

Ms Quinn outlined the council position in response to a question by Dublin City councillor Ruairi McGinley, who is based in the Rathgar/Rathmines electoral area.

Mr McGinley said that the public are "rightly expecting" a reduction in their property tax and called on the government to "guarantee" that such a process will take place.

"Dublin needs to get a dividend out of this, because people are paying this in a compliant way," he said.

The confusion over the property tax comes after the Irish Independent revealed that Fine Gael-led plans to "claw back" the property tax surplus from a number of councils have caused deep tensions in the Coalition.

Irish Independent

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