Kenny plays down Cabinet split over property tax

Taoiseach Enda Kenny has moved to downplay concern over a Cabinet split centred on property tax cuts.

Mr Kenny denied the Government was divided over how to allocate resources from the levy across the country.

Fianna Fáil leader Micheál Martin accused the Government of being in disarray over the issue after claims Fine Gael was seeking to reduce central grants to high population urban areas when authorities are allowed to keep 80% of the property tax in collection areas.

Labour wants to see cuts in the controversial tax, and metropolitan areas able to keep more funding rather than subsidise other parts of the country.

The Government is locked in talks on how to cushion the blow for less populated rural areas when councils gain the power to vary tax rates by up to 15%.

Mr Kenny insisted that would be a matter for individual authorities.

“The law says that the elected representatives of the people, whatever the shade of opinion on the council, are entitled to reduce the property charges by 15% if they so wish.

“It is a matter for themselves to make that decision,” the Taoiseach told the Dáil.

Mr Martin said the Coalition had handled the introduction of the tax badly by delaying passing funds to councils so the money could be used to cover the huge start-up costs of Irish Water.

“The Government decided to retain 80% of the revenue that was meant to go to local authorities to pay for the establishment of Irish Water over the last 12 months.

“Provision was made in the legislation to reduce or increase the property tax by 15% at local level.

“This is despite the fact that at the beginning of this year the property tax was doubled.

“It was an extraordinarily cynical move to double the tax and then have the Tánaiste commit the Labour Party to reducing it by 15% in 2015.

“We have now learned there is a significant split in the Cabinet on this issue,” Mr Martin said.

The row came as Labour Dublin TDs stepped-up pressure against funding being switched from the city to rural areas.

Meanwhile, councils have been told what they have to do if they are to adjust the rate of property taxes.

Minister Phil Hogan signed regulations that require authorities to consult with the public for at least 30 days on any proposed change.

This process will include a report by the county or city manager which takes into account the likely effect the new tax level would have on homeowners and the contrasting impact on the council’s finances.

The council must also prepare a full economic assessment of its own books to show the Department of the Environment that a hike in taxes is necessary.

This will have to include an assessment of the debt situation in the council and the burden that legacy loans are having on its finances.


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