Homeowners face ‘modest’ property tax hikes from 2021

All homeowners will see their local property tax (LPT) bills increase from 2021, as Finance Minister Paschal Donohoe seeks to increase the amount raised from the tax.

Mr Donohoe is also seeking to end the anomaly that sees newer homes exempted from the controversial tax, which raises about €500m a year.

He confirmed that owners of about 80,000 homes built since 2013, when the LPT was introduced, will continue to escape the charge for at least another two years, because his officials were unable to find a way to charge them.

Speaking yesterday at the Oireachtas Oversight Committee, Mr Donohoe said any increases will be “affordable and modest” but made clear those in bigger homes will pay more than those in lower value properties.

Mr Donohoe told committee members that he is of the “firm belief” that there is “latent potential for the tax to play a more significant and positive role in our overall taxation system”.

He said that, at “just 0.6% of GDP, the LPT yield is low when compared to rates of 2.8% of GDP in France and over 3% of GDP in the UK”.

Last night, Mr Donohoe said that he does not intend to seek to match the rates in the UK or France but that the rate here will have to increase.

The rate of property tax paid by homeowners is based on the value of the property in May 2013.

However, in 2015, then finance minister Michael Noonan announced the valuation thresholds for LPT would be frozen until October 2019. A freeze on re-evaluations until November 2020 was announced earlier this year.

As revealed by the Irish Examiner, the Attorney General Seamus Woulfe expressed serious concerns about the Government’s decision to delay a review of the LPT.

Mr Woulfe warned ministers explicitly that the Government is leaving itself open to a potential legal challenge because up to 80,000 homes built since 20132 are exempt from the LPT.

“The way that the 2012 act is constructed is that there is a significant number of properties that attract an exemption from liability for one reason or another,” said Mr Woulfe.

“Arguably, this could create an appearance of arbitrariness that could give rise to a challenge from a disgruntled liable person.”Mr Woulfe also raised the possibility that a deferral is not consistent with the Constitution.

More on this topic

One of the world’s oldest captive Borneo orangutans celebrates 50th birthday

Work under way to restore power after Argentina and Uruguay hit by major failure

Hong Kong government apologises after mass protests

Husband charged with murder of Cork wife

More in this Section

Gardaí launch murder investigation into death of woman in Mayo

Latest poll indicates five-point lead for Fianna Fáil

Farmers misled by Government on EU beef fund, claims TD

Post-mortem carried out on Mayo woman found dead yesterday


Want to make the most of an urban garden space? Here are seven ideas

More From The Irish Examiner