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Sunday 21 September 2014

Howlin wants councils to have full control over property tax rate

Published 29/07/2014 | 02:30

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Public Expenditure and Reform Minister Brendan Howlin
Public Expenditure and Reform Minister Brendan Howlin

COUNCILS will eventually have the ability to set their own rate of property tax at whatever level is required for their local budgets, according to Public Spending Minister Brendan Howlin.

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From next year, local authorities will have the power to cut or increase their property tax rate by 15pc, when the proceeds of the tax go direct to councils.

But Mr Howlin would like councils to have even greater flexibility to set the rate.

"Personally, this is entirely personal, I wouldn't have any restriction on it. They make up their mind, yeah. They decide. That would be my view over time," he told the Irish Independent.

Homeowners in Dublin are in line for a full 15pc cut in their property tax in 2015.

In another eight council areas around the country, householders can expect a reduction of up to 15pc, according to draft calculations for the Government.

A cut of up to 15pc in the rate will be possible in Cork City, Cork County, Galway City, Kerry, Clare, Meath, Kildare and Wicklow. The 12 councils can cut the rate because they will have a surplus of funding next year when the benefits of the property tax are felt locally.

The rest of the 19 councils will have the same amount of money as this year, so won't be able to cut their property tax rate.

Mr Howlin says, ultimately, councils should be able to go beyond the 15pc variation and set the property tax at whatever level is required to balance the books.

"I would like to see over time – and it would be a matter for the Minister for the Environment, obviously – even greater freedom to local authorities to vary the rate in accordance with the views of their own electorate that they would be accountable to," he said.

Mr Howlin said giving councils more responsibility for their budgets will lead to greater levels of accountability for candidates in the local elections.

"If people want to stand and say that 'I will stand on the basis of the very lowest property tax possible, but of course we will have to cut services accordingly' and others will say 'listen, this is the suite of services I'd like to provide, but this will be the cost of it'. And you're going to have real local democracy when you have that debate locally.

"It couldn't happen this time and it may not be bedded down to do it in five years' time. But over time, that's where we should be going to," he said.

The Government has worked out how much each local authority will receive next year when the property tax goes direct to the local authorities.

The first €4 out of every €5 collected will go straight into the area where it is collected. The remaining €1 out of every €5 collected will go into a pot to be distributed among the poorer councils.

The exact formula for the distribution of funding is still to be decided. The final figures will determine which local authorities can cut by the full 15pc without affecting services.

Irish Independent

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