Thursday 17 October 2019

Kevin Doyle: 'FG plays politics with LPT as election battle begins'

Taoiseach Leo Varadkar. Photo: Frank McGrath
Taoiseach Leo Varadkar. Photo: Frank McGrath
Kevin Doyle

Kevin Doyle

So now we know. It has long been suspected Fine Gael would use the reform of property tax as an election ploy - and now we have the proof.

The party's draft manifesto for next month's local elections makes it clear that candidates will promise to fight for property tax reductions in their local areas.

And in theory there is nothing wrong with that. Who wants to pay more tax?

However, questions have to be asked about whether the situation has been manipulated at Government level to suit party needs.

Homeowners currently pay the LPT based on the value of their property in 2013, but prices nationally have risen by around 80pc.

That anomaly was due to be addressed in November, when homes would be revalued ahead of their 2020 bills.

Taoiseach Leo Varadkar had repeatedly talked about finding a formula to ensure any increase would be modest.

After 14 months of waiting for an inter-departmental report on how to achieve that stability, the Government simply postponed a decision altogether in favour of seeking a cross-party consensus.

Admittedly this is a minority Government, so any changes to a contentious tax bring political risks at a time when the country needs to maintain a steady course.

At the same time, however, the expert report bluntly advised that "further delays in revaluation may present risks to the long-term sustainability of the tax".

The report is also clear in its conclusion that the existing ability of councillors to lower the LPT for their region should be limited.

The 'Local Adjustment Factor' should be amended "to permit upward-only adjustments to a maximum of 15pc," it says.

Since 2015, 15 different local authorities have used the existing system to lessen the burden on their homeowners.

The four local authorities in Dublin have dropped their rates for 2019.

By contrast, councillors in Co Limerick, Co Laois, Co Longford and Co Waterford have upped their rates.

The LPT raises around €500m for local authorities every year. The money is spent on roads, lighting, upkeep of open spaces and fire services.

"So, we want to make sure this revenue base is not undermined, as that would have a severe impact on these services," the Fine Gael document says.

However, the party is about to put property tax front and centre of the local election campaign. It will be interesting to observe how Fianna Fáil, Sinn Féin and the Labour Party react.

Will they try to outbid Leo Varadkar or will they try to cast Fine Gael as irresponsible for playing politics? Cross-party consensus, which was the basis for delaying changes, seems unlikely in the heat of an election campaign.

Irish Independent

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