Moderate increases to Property Tax planned for 2020
The Government plans to introduce moderate increases to Local Property Tax in 2020 as part of wide-ranging reforms that will make LPT a more significant contributor to State revenue, according to advanced prepared remarks by Finance Minister Paschal Donohoe.
Minister Donohoe, who is scheduled to appear Tuesday afternoon before the Oireachtas Budgetary Oversight Committee, says the Government’s policy objectives on LPT reform include broadening the tax base to more properties and imposing “modest and affordable increases” in payments due for many properties.
“By ‘relative stability’ in LPT liabilities I mean that any increases should be modest and affordable and, of course, fair,” Minister Donohoe said in his prepared remarks.
The Committee plans to question the Minister about the Department of Finance’s latest recommendations for LPT reform contained in the Tax Division’s published March review. It outlined several scenarios for changing the rates and bands. Some scenarios would pin current LPT rules to today’s higher property values and thereby raise State revenue substantially, while others would largely preserve the status quo by broadening bands and lowering the current 0.18pc rate applied to properties valued under €1 million.
Nationally, property prices have risen more than 80pc since their 2013 trough, most sharply in greater Dublin. In most cases this has left the 2013 self-assessed valuations of LPT liability at hopeless odds with current market reality.
The latest figures from Revenue suggest substantial compliance with the existing LPT regime, with 98pc of assessed households paying the tax in 2018. Revenue says it collected €482 million in LPT last year. The owners of around 49,000 properties nationwide applied for exemptions citing a wide range of issues, ranging from pyrite damage to charitable use.
In his prepared remarks, Minister Donohue says expected reforms to LPT should include the removal of exemptions for unused properties built since 2013, when the LPT was introduced. Revenue figures suggest this would mean extending LPT to more than 5,000 properties.