What your property taxes are spent on - as higher bills loom
With hikes in the pipeline, it's more important than ever that the money is spent well
Almost a million property owners are facing major hikes in their local property tax (LPT) bills this year - and many more could be doing so this time next year when changes to the property tax system are set to kick in.
The higher property tax bills being currently faced by around a million homeowners are due to the decision by 19 local authorities to increase the property tax for their area for 2020. However, changes to the way the property tax system operates in the future could push up property tax bills across the board - meaning almost two million property owners could be hit with higher bills this time next year. This is because the valuation date (the date you value your property for the purpose of property tax) is expected to change from May 1, 2013, to November 1, 2020. Your property tax bill for 2021 could increase as a result.
"This is likely to substantially increase the tax paid because most [property] valuations have risen substantially since 2013 - and so most owners will pay more property tax," said Michael Gaffney, a tax expert with KPMG.
The Government has indicated it wants to ensure homeowners don't face major leaps in their property tax bills when the valuation date is changed - and so there are expectations of tweaks in the property tax system around then to prevent big increases in bills.
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All the same, higher property tax appears to be in the pipeline. All the more important then to know what your property taxes are spent on - and that those taxes are spent wisely.
How is lpt spent?
A good chunk of your property taxes is spent on the day-to-day management of your local authority and to provide local public services - such as street cleaning, maintenance of parks and green areas (including grass cutting), street lighting, library services, fire and emergency services, and leisure amenities. Some of the money may also be spent on tourism development and promotion in your area.
Some local authorities are required by Government to ring-fence a proportion of their property tax allocation to fund housing or road services in their area. This applies to local authorities with a large property tax base - such as those in large urban or commuter areas.
About a fifth of the €503m of property taxes collected in this country in 2019 is set to be spent on housing and road services. Four-fifths is for use at the discretion of local authorities (where your council decides which local services and other items the money should be spent on). It is a matter for each local authority to determine its own spending priorities, including how to spend its property tax allocation - apart from where it is required by Government to ring-fence some money for housing or road services, according to a spokesman for the Department of Housing, Planning and Local Government.
The Sunday Independent contacted a number of councils and asked for a flavour of some of the projects that property tax has helped to pay for.
Dun Laoghaire-Rathdown County Council was allocated about €33.7m in property taxes for 2019. Almost 60pc of this (about €19.35m) was spent on housing - including local authority housing, affordable housing, Traveller accommodation and supports, and private housing grants, according to a spokeswoman for the council.
About €3.5m was spent on road maintenance - including road resurfacing, the replacement of footpaths and bridge maintenance. About €10.9m was for the council's discretionary expenditure (where money is used to provide local services and so on).
Fingal County Council was allocated about €26.8m in property taxes in 2019. About €15.3m of this was spent on housing, almost €4m was spent on roads and €7.5m was for the council's discretionary expenditure, according to a spokesman.
"The discretionary expenditure has allowed Fingal to expand its library activities - including the acquisition of mobile libraries and an increased library book budget. It also has allowed us to increase funding to communities and arts activities within the county. In addition, Fingal County Council has increased funding to events such as St Patrick's Day parades and 'Fingal Festival of Fire' [a Halloween event]."
Wexford County Council was allocated about €14.7m in property taxes for 2019. Property taxes have helped - and will help - fund a number of initiatives around the county, including the Southeast Greenway, according to a council spokesman. This greenway - a 24km cycling and walking route which will link New Ross in Wexford with Ferrybank in Waterford through south Kilkenny - is expected to cost €13m and to open in autumn 2021. Other initiatives which the council says property taxes have helped support include the Hatch Lab in Gorey, a shared office space which was completed in 2018 and was designed to support technology companies and start-ups, and Enniscorthy Technology Park, a 30-acre business park in Enniscorthy which has been partially completed and has planning permission for further works. "The development and continuation of these projects, as well as the maintenance and continuing provision of our everyday public services, is dependant on the overall income received by the council from all sources, including local property tax," said the council spokesman.
Wicklow County Council was allocated about €13.7m in property taxes for 2019. The council recently voted to increase the 2020 rate of property tax in its area by 10pc - and said that the money raised by this increase will help fund projects such as the Blessington Greenway, the Avonmore Way Link Bridge and a public transport bridge in Bray. "Playgrounds and parks in Wicklow are supported by the property tax," said a spokesman for Wicklow County Council. A number of playgrounds built in Wicklow in recent years include one in Laragh and another in The Murrough along the Wicklow Town seafront.
Kildare County Council was allocated about €17.3m in property taxes in 2019. Property tax has helped fund a number of projects in the county which have been delivered in recent years or are ongoing, according to a council spokeswoman. These include an upgrade of the Heritage Centre in Athy, town and village health checks in the Clane-Maynooth municipal district, the undergrounding of overhead cables in Naas, and the conservation of Tea Lane Graveyard - an ancient cemetery in Celbridge. "Playgrounds funded by local property tax were Kill, Caragh, Sallins and Eadestown, all of which have been built," said the spokeswoman. Funding has been provided for a number of other playgrounds while an outdoor gym in Kildare Town was also funded by property tax, she added.
Galway City Council was allocated €6.5m in property taxes for 2019. "The local property tax income is not allocated to specific projects but is applied across all our services such as maintenance of social housing, homelessness, litter control, arts funding, community centres and so on," said a spokesman for the council.
South Dublin County Council (SDCC) was allocated about €20.55m in property taxes in 2019. "Since 2013 [when the property tax was introduced], SDCC has been able to continue existing projects and local works, such as the upgrading of district and neighbourhood centres; the provision of all-weather pitches and sports pavilions; the provision of over €1m in additional direct supports to communities in the form of community initiative funding, sports grants, education bursaries and age-friendly initiatives; and the investment of €2m in 36 new playgrounds," said a council spokeswoman. Some of the SDCC projects which property tax has supported include the new Enterprise Innovation Centre in Tallaght, and the construction of new libraries in Clondalkin and Tymon.
Put to good use?
Find out what your council is spending your property taxes on. Local authorities often publish details of how they spend their income - including property taxes - on their website. Let your council - or the Department of Housing and Local Government - know if you're unhappy about any of the projects or items that your property taxes are being spent on. It is taxpayers' money - so it's important that it's put to good use.
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