Homeowners face hikes of up to 350pc in property tax bills as prices increase
Homeowners face a sharp rise in their property tax bills - in some cases by as much as 350pc - if Central Bank predictions about price rises come to pass.
A survey of estate agents, auctioneers, economists and surveyors suggests that prices will rise by 8pc nationally this year, and 15pc over the next three years, which will have a major bearing on local property tax (LPT) bills.
The LPT is based on property values as of May 2013. Bills are frozen until 2019, when the LPT is expected to be recalculated based on property prices at that time. If prices rise by 15pc by that stage, it will result in the vast bulk of homeowners paying more - in some cases, families can expect a three-fold increase in their bills.
An analysis of price data from the Central Statistics Office (CSO), which is broken down by Eircodes, suggests that homeowners in 101 areas will be hit with increases ranging from 10.5pc to 350pc. In 21 areas, there will be no change. LPT bills will fall in four.
It shows that in four areas - Kells in Co Meath and Rylane, Bandon and Macroom in Co Cork - hikes of 350pc can be expected. The average price for a home in these areas in 2013 was less than €100,000, which incurred a €90 LPT bill. They could rise above €200,000, meaning a LPT liability of €405 a year arises.
The analysis also shows:
Increases of 250pc are forecast across 14 areas, generally because house prices were less than €100,000 in 2013 but are likely to increase. In all cases, they are forecast to rise from €90 a year to €225. Affected counties include Roscommon, Westmeath, Cork, Offaly, Waterford and Kerry;
The sharpest rise in the capital is expected in Dublin 12, where average house prices are forecast to increase from €156,000 to €418,000, resulting in a LPT hike from €315 to €765, up just over 140pc. There will also be substantial rises in Dublin 4, from an average LPT liability of €585 to €1,395;
Properties in Roscommon, Midleton, Shannon and Skibbereen are not forecast to rise above 2013 prices, meaning the LPT will fall from €225 a year to €90.
The Central Bank survey suggested that the shortage of properties is the driving force for price growth. The latest CSO figures show property price growth accelerated in June, with prices up 11.6pc year on year.
The average market price paid by households for a dwelling was €258,544. In Dublin, the average sales price was €401,890, and there are no signs of prices stabilising.
Taoiseach Leo Varadkar has indicated local authorities could be given more flexibility to vary the rate of property tax when revaluations occur, which would reduce the burden on households affected by rising prices but would impact on council spending.