Taoiseach vows no sudden property tax rises

Taoiseach Leo Varadkar has promised to work “might and main” to protect homeowners from increases in local property tax rates.

Taoiseach vows no sudden property tax rises

Mr Varadkar, speaking in Downing St, said there would be no sudden hikes in property tax rates despite spiralling house price values, particularly in urban areas like Dublin and Cork.

“One thing that has not increased, which we don’t want to see, and which we will do might and main to avoid, is any sudden hike in property tax that would come about because of house revaluations,” he said.

“There has been a very significant increase in property values, particularly in the greater Dublin area, but not just in the Dublin area, but I certainly don’t envisage, nor do I want to see, a sudden dramatic hike in property tax so we will be working hard to avoid that.”

Former finance minister Michael Noonan postponed the revaluation date for the property tax until 2019, thereby freezing the rate paid by homeowners.

The tax, collected by the Revenue Commissioners, has compliance rates above 90% and Mr Varadkar’s comments come as local authorities are voting on whether to change the tax rate. Homeowners in Co Cork will not have to pay increased local property tax (LPT) next year after the majority of councillors voted to maintain the status quo, but Kerry County Council yesterday voted to increase the tax by 5%.

While many councils said they would like to reduce the LPT, they maintained they could not as a cut in income would result in a reduction in services.

“Local councils have the power to vary local property tax up and down by 15%,” said Mr Varadkar.

“My own local authority in Fingal has voted to alter it downwards, but only by 10% instead of 15% because they want funds to spend on housing and homelessness.”

For homes worth €300,000 to €350,000, owners will pay annual property tax of €585, while homes valued between €400,000 and €450,000 face a charge of €765 a year.

It emerged yesterday that the average three-bed semi-detached house nationally has risen by 3.1% to €221,843 since June, as the housing crisis continues to grow.

The REA Average House Price Survey said the average price of such a home is jumping by €500 every week.

Overall, the average price of a three-bed semi across the country has risen 11.2% over the past 12 months.

The figures come as Revenue is set to increase its oversight of residential landlords by collecting information on the amount of rental income they disclose for the first time.

Meanwhile, the head of AIB is due to say the banking sector has a “crucial” role in helping to solve the escalating housing and homeless crisis.

AIB CEO Bernard Byrne, who is due before the Oireachtas finance committee today, will say that the severe housing shortage, particularly in Dublin, Cork, Galway, and Limerick is “an obvious cause for concern” for banks.

“There is no ‘silver bullet’ but lenders like AIB clearly have a crucial role to play and we are very active in not just providing real estate finance but increasingly in social and affordable housing,” he will tell the committee.

Mr Byrne will also tell committee members that the level of construction must increase but that a “clear constraint” to builders is the low availability of funding for the acquisition and refinancing of zoned land that does not carry planning permission.

It has also emerged that Housing Minister Eoghan Murphy is to announce details of changes in planning, likely to focus on larger developments and developments in the cities, in a bid to encourage more building.

Speaking in Dublin, Mr Murphy said: “It is viable to build apartments and still make a profit but there are difficulties there as well. Next week, I am going to announce some affordability measures that are going to speak directly to those concerns.”

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