Members of Dublin City Council voted down proposals this week to increase local property tax (LPT) rates by 30% to shore up funding gaps in the council’s coffers.
The fractious vote saw councillors vote 34 to 21 in favour of maintaining the status quo, which sees Dublin LPT rates set at 15% below the basic national rate.
It comes ahead of similar votes taking place in other councils in the coming weeks, with cash-strapped local authorities already facing significant losses due to Covid-19 and its impact on revenue streams, such as rates and parking.
Management of Dublin City Council (DCC) had urged members to increase the property tax by 15% above the national rate, representing a 30% increase, because of “material finance issues”, which have been compounded by the Covid-19 pandemic.
The proposed increase in property tax would have provided an additional €24.1m in funding, DCC Chief Executive Owen Keegan argued.
Income from property tax was estimated at €81m in 2021, the majority of which would go into a centralised local government fund for all local authorities.
The local authority outlined that it is facing a €39m deficit and that there was a "large gap" between funding and demand for services.
The city council has seen increased costs due to the Covid-19 pandemic of around €41m to cover personal protective equipment, IT, homelessness services, and other additional costs and it has also suffered income losses in the order of €21m due to reduced planning fees, parking charges, commercial and housing rents.
Independent councillor Anthony Flynn, who believes the property tax should be abolished, said constituents should not be expected to bridge funding gaps and the Minister for Local Government will need to clarify what extra funding will be made available to manage additional pressures posed by Covid-19.
“The council has taken a major whack in terms of lost revenue and increased costs and we’ve had no indication from the Government if that is going to be reimbursed to the council,” Mr Flynn said.
A recent public consultation, carried out by DCC, on the property tax found that 69% of 627 people surveyed wanted the rate maintained at 15% below the basic rate.