Monday 23 September 2019

Finance Minister defends delaying property tax changes amid claims it's 'kicking the can down the road'

Finance minister Paschal Donohoe. Photo: Frank McGrath
Finance minister Paschal Donohoe. Photo: Frank McGrath
Cormac McQuinn

Cormac McQuinn

FINANCE minister Paschal Donohoe defended the decision to delay Local Property Tax (LPT) changes for a year amid claims it’s 'kicking the can down the road' and being done for electoral reasons.

He also said that if the revaluation of LPT rates had gone ahead this year as planned, and no changes were made, two-thirds of households would have seen increases of more than €200.

Mr Donohoe conceded that there’s an “inequity” in the situation that sees almost 50,000 home owners who bought new-build houses since 2013 remaining exempt from the tax.

LPT rates for householders are to be frozen for another year after a government decision last night.

Home owners now won't see any change in their LTP bills until 2021.

That’s beyond the next general election which is expected by summer 2020 at the latest.

Sinn Féin TD Pearse Doherty has claimed the government is kicking the can down the road on LTP ahead of the upcoming local elections and that it’s “cute hoor politics”.

Mr Donohoe said he “won’t take any lectures on cute hoor politics from a party… that’s looking to abolish local property tax.”

Five scenarios for changing LPT rates are set out in a review carried out by the Department of Finance.

Mr Donohoe said he favours an option similar to scenario five which would see increases all of the valuation band thresholds by 80pc.

However, he said he wouldn’t be setting out a preferred increase in the thresholds at this point.

Mr Donohoe is referring the Review Group’s report to the Oireachtas Budgetary Oversight Committee for consideration in a bid to build cross party consensus on any changes.

Mr Donohoe pointed out that there is a minority government and he would require Opposition support to make alterations to the LPT regime.

He also noted that changes to property tax in other countries had been done with difficulty.

He said the extra time was needed to “ensure we get this right”.

It was previously decided to keep them at this level until November 2019.

There have been fears that the tax will increase significantly due to rising house prices if the way LPT is calculated is not changed.

The government has promised to change the way LPT is applied to avoid large increases for the majority of households.

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