Cork homeowners face 5% hike in local property tax after county council approves increase

Homeowners with properties worth between €315,001 and €420,000, the most common band in the county, will have to pay €382.95 annually, which is up €16.65

The council is expected to bring in close on €40m from the tax next year. The 5% increase amounts to €1.9m. Picture: Denis Minihane

Homeowners in Co Cork will have to pay an extra 5% a year on local property tax (LPT) between next year and 2029.

This will mean owners of houses worth less than €240,000 will pay €109.25 a year over the next five years, up €4.75 on this year. Houses worth between €240,001 and €315,000 will be liable for a €11.75 increase, bringing the LPT bill to €270.25 a year.

Homeowners with properties worth between €315,001 and €420,000 will have to pay €382.95 annually, which is up €16.65. That band is the most common in the county, with 34% of all properties falling within it.

The council is expected to bring in close on €40m from the tax next year. The 5% increase amounts to €1.9m.

The majority of councillors said they would only vote for the increase if council management agreed this additional block of money, amounting to €7.6m over the four-year period, be ploughed directly into the region’s eight municipal district councils.

Council chief executive Moira Murrell had initially said she was willing to provide 50% of the 5% income increase to municipal councils. Money is needed in the central coffers to counter significant inflation costs for construction and energy, and to purchase land for vital local authority house building projects, she said.

Lorraine Lynch, the council’s director of finance, also said additional money was needed not just due to inflation but to guard against the financial uncertainty in the global economy.

Fine Gael councillor Michael Hegarty and Fianna Fáil councillor Patrick Gerard Murphy proposed a vote to approve the 5% increase, but only if the municipal councils received the additional windfall, which would enable them carry out much-needed projects such as traffic calming measures, playground improvements etc.

Cllr Danny Collins, the Independent Ireland leader on the council, said the council had approved a 2.5% increase in LPT last year and his party could not vote for a further 5% on top of this, as it would add further pressure on already hard-pressed families.

Social Democrats councillor Ann Bambury said the council was having to raise extra funds because central Government was consistently drawing back financing of local authorities.

Independent councillor Alan Coleman agreed with her, pointing out Dublin City Council, which is the richest local authority in the country, was also recently forced to hike up the LPT to get badly-needed income.

"The LPT is basically a replacement of Government funding,” he added.

Independent councillor Ger Curley said house prices were going up an average of 7% per year.

“It’s a tax whether you are on a State pension or a multi-millionaire. It is the only tax we have direct control over, and it shouldn’t be increased,” he said.

But Fianna Fáil councillor Gearóid Murphy said compared with other developed countries, property tax here “is sufficiently low to allow for a 5% increase”.

After much debate, the motion to accept the 5% rise was passed by 41 votes to nine. Fianna Fáil and Fine Gael voted for its adoption, with Independent Ireland, Independents, Labour and Sinn Féin against.

It is the first time councillors have voted for a LTP package of four years rather than just on an annual basis.

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Those with the most valuable homes will pay proportionately more due to the 5% increase.

Homeowners with a property worth between €525,001 and €630,000 will pay an extra €26.15 per year, and those in the €630,001 to €735,000 bracket will face a €30.90 increase.

However, people living in the 8,000-plus council houses in Co Cork will not pay any LPT as the county council pays it for them.