Householders in Cork city to face local property tax hike

The owners of an average home in Cork City will pay €450-€550 in LPT per year — an increase of between €2 and €16 per year on homes up to €500,000

The move will raise just over €2.3m for the city — around 1% of Cork City Council's overall budget. Picture: Dan Linehan

Private homeowners in Cork City face a hike in their local property tax (LPT) next year with some of the income set to be used to help fund footpath repairs — one of the key issues raised during the recent local election campaign.

It follows a decision by city councillors on Wednesday to vary upwards the LPT local adjustment factor by 3% — from 9% to 12% — above the baseline rate set by Revenue.

It means the owners of an average home in Cork City will now pay between €450 and €550 in LPT per year — an increase of between €2 and €16 per year on homes worth up to €500,000. 

The move will raise just over €2.3m for the city — around 1% of the city’s overall budget.

In a report to councillors, deputy chief executive Brian Geaney recommended the maximum 15% increase allowed above the baseline rate to cover the increased costs facing the city, and that it would apply for the five-year lifetime of this council.

He said the preparation of the city’s 2025 budget is proving to be extremely challenging considering the increased cost of providing a fire service, the compensation payment to Cork County Council because of the boundary extension, and the increase in demand for services being sought.

He said there will be additional pay costs next year due to the national pay agreement, that additional staff are being sought to improve and enhance services, and because of age demographics, there will be increased spend on lump sums and additional pension costs.

And he said there will be a reduction in income due to public realm and flood relief works, as well as providing additional cycleways and pedestrianisation of city streets.

Fianna Fáil councillor Sean Martin proposed a 3% increase, from 9% to 12%, above the baseline rate, and said some of the income it generates should be used to fund footpath repairs and tree cutting. The proposal was supported by Fine Gael, Labour and the Green Party who said the city needs to fund the delivery of services.

However, Sinn Féin and Solidarity opposed the increase, with Solidarity’s Brian McCarthy describing the LPT as an “injustice” and “a regressive austerity tax”.

Any increase is “an attack on families and living standards” against the backdrop of a cost-of-living crisis, he said.

Sinn Féin’s Joe Lynch criticised the three government parties who he said are promising to give with one hand in next week’s budget while taking with the other, and he called for a ‘Cork dividend’ from the €13bn Apple tax windfall to address some of the city’s infrastructural challenges.

Acknowledging the challenging financial position facing the council, he said it should not be resolved by increasing the cost to workers and families.

“The problem with the Local Property Tax is that it is a regressive form of taxation that disproportionately impacts those on lower to middle incomes. It takes no account of one’s ability to pay, because it is not a tax on wealth, but rather a tax on homeownership,” he said.

Independent councillor Paudie Dineen also opposed the increase at a time when the country is awash with money.

“We are able to give RTÉ €725m, we’re able to build a bike shed for €346,000. We have €13bn coming in from Apple. I think it’s time the government stood up to the plate, and give householders a break and not have any LPT for a couple of years....as a gift to everyone,” he said.

Councillors then voted 22-6 in favour of the 3% increase in the local adjustment factor, from 9% to 12% above the baseline rate, and voted to set it for two years, with an option of an upward review next year.