Local Property Tax increases are necessary, economist says

A top economist says that “unfortunately” a review of the Local Property Tax is necessary.

Edgar Morgenroth, professor of Economics at Dublin City University told Newstalk Breakfast “unfortunately it is necessary, we do need taxes to deal with all sorts of crises such as health and housing, so there is a need for a tax review.”

He said that the Local Property Tax should have allowed for change all along, instead it had “stored up a large increase”.

Prof Morgenroth explained that the tax had been brought in to broaden the tax base, but by not indexing it the share of tax revenue has been declining.

“Rather than broadening it, it has narrowed it. That’s not a good idea.”

He recommended that the percentages should remain the same, but that the values increase. He acknowledged that this “will hit places like Dublin more”, but that the Government “could give some of it back” by other allowances and means.

If the issue is trying to raise local taxes then perhaps there should be a system to pay for local services, he suggested. Maybe there is a need to change the way local government is run, he added.

However, Dublin Fine Gael councillor Paddy Smyth said that the Local Property Tax should not be based “on the capricious values of the property market.

The effects on Dublin would be disproportionate.

He said that Dublin pays “a huge amount” of tax compared with the rest of the country which is not fair on his constituents.

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