Covid-19 impact delays homeowners' property tax rise

Covid-19 impact delays homeowners' property tax rise

The delay in reviewing the local property tax means people who bought new homes since 2013 will be exempt from paying the tax for another year. File picture: PA

Homeowners will not face an increase in their Local Property Tax (LPT) bill for 2021, the Finance Minister has confirmed. 

Paschal Donohoe today confirmed that he had told cabinet that a re-evaluation of the LPT would not be undertaken on November 1 this year, as planned, due to the impacts of Covid-19. The review will instead be carried out on the same date next year.

The deferment also means that around 80,000 homeowners who bought new-build homes since 2013 will be exempt from paying the tax for another year. 

Mr Donohoe said that the move was designed to ward off "volatility" in the market due to the pandemic. 

"In taking almost five months to conclude, the process to form a new Government took longer than any of us would have anticipated, our initial focus and priority has rightly been on dealing with the impact of the Covid-19 pandemic. 

"As with many aspects of our economy, the pandemic has introduced volatility into the residential property market and I am also conscious of the need to allow sufficient time for the Revenue Commissioners to introduce the necessary changes to the LPT regime before any new valuation date. 

"With this new valuation date, there will be no change in LPT liabilities until 2022 at the earliest."

Mr Donohoe said he would bring forward legislation in 2021 to achieve the goals for the tax set out in the Programme for Government.

Under that document, there are three aims for the tax. Firstly to bring forward legislation "on the basis of fairness" and that "most homeowners will face no increase". 

Secondly to bring new homes, which are currently exempt from the LPT, into the taxation system, and, thirdly, that all money collected locally be retained within the county, using an Exchequer-backed equalisation fund.

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