Government deferred Local Property Tax review for political reasons, says FF

Government deferred Local Property Tax review for political reasons, says FF
Darragh O'Brien

The Government is “treating the public like children” and deferred the review of the Local Property Tax (LPT) for naked electoral reasons, Fianna Fáil says.

Responding to revelations in the Irish Examiner which detailed concerns expressed by the Attorney General, Seamus Woulfe, about deferring the LPT review, Fianna Fáil's Housing spokesman, Darragh O'Brien, said it is clear that ministers ignored those concerns for electoral reasons.

“Everyone wants fair and affordable LPT - the Government has been kicking this around since 2015. Many aspects of the LPT are not fair.

"The Government has basically dodged this and fudged it for political reasons because they do not want to make a decision before the local and European elections,” he said.

“They are treating people like children on this and that is not correct. If you look at what the Attorney General advised, he raised some quite serious issues about how this tax would be viewed constitutionally and how it would be seen as arbitrary given the large number of homes now exempt,” he said.

Attorney General Seamus Woulfe
Attorney General Seamus Woulfe

“This deferral, even the constitutionality was questioned by the AG, is simply being done for electoral reasons, not for fiscal prudence,” Mr O'Brien said.

Mr O'Brien pointed to a warning by the Attorney General about the potential loss of income of a quarter of a billion euro a year.

In response, Junior Public Expenditure Minister Patrick O'Donovan said it was reasonable for his boss, Paschal Donohoe to take his time to get the right solution.

He said suggestions that the government is foregoing €250 million a year is not correct as to collect that amount in tax would result in hikes to bills to people of between €100 and €300 a year.

“Paschal Donohoe has made it clear that any increases would be modest, fair and affordable,” he said.

"If no policy change was made and there was a revaluation, about 85% of people would see an LPT hike of up to €300.

"He is reflecting the fact we need some policy change. He wants the overall yield to be maintained at about €500 million."

In the Seanad, Independent Senator Michael McDowell sought to highlight the inequity of the tax, saying it is highly unfair on people living in Dublin: “Somebody in Dublin who lives in a very small house with a limited income and has much higher mortgage obligations than somebody living outside of Dublin in a much larger house but with a greater income pays more to local government in Dublin than a wealthier person living in a much bigger home pays towards local government in his or her county outside of Dublin.

"This is an injustice which the Government has to face up to."

In response, the Taoiseach Leo Varadkar accepted that homeowners in Dublin and in other cities pay more in their local property tax than those living in smaller towns or more counties: “That is, of course, true.

"There is more to the story than that, people living in urban areas receive more local services from the local authorities, whether it is footpaths or street lighting, local parks and grass cutting and so on.

"I think there is a solution. I have suggested it before, that is that the local property tax should be retained locally."

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