Cork council losing out on property tax from houses with lower valuations due to flood risk

Cork County Council heard that businesses and householders who have been refused flood cover since Midleton was hit, first in 2015 and again with Storm Babet in 2023, 'would happily pay a higher premium for peace of mind'. File photo: Guileen Coast Guard unit

The State is losing out on significant Local Property Tax (LPT) revenue because a growing number of properties which are being denied flood insurance can thus stay on the lowest valuation band. These properties are considered to be harder to sell and of lesser value than similar properties with insurance cover.

Cork County Council is now to write to Government in a bid to pressurise insurance companies to insure homes in the county which are at risk of flooding.

Fianna Fáil councillor Ann Marie Ahern raised the issue of a shortfall in property tax revenue for the local authority and received unanimous support from colleagues to urge the Government to act.

Ms Ahern, whose auctioneering firm was one of hundreds of properties in Midleton which fell victim to flooding following Storm Babet, said without flood cover properties have a lesser value and allows owners to justifiably value their property in the lowest LPT band, for properties valued less than €240,000.

She and other councillors claims that if houses were provided with flood cover their value would significantly increase their LPT contributions.

Ms Ahern said she had spoken to a number of businesses and householders who have been refused flood cover since Midleton was hit, first in 2015 and again with Storm Babet in 2023 and they “would happily pay a higher premium for peace of mind,” she said.

It is estimated that 600 households and businesses in the East Cork region have lost cover since the first major flood event. Fianna Fáil's Pat Hayes said insurance companies are making massive profits “and the government need to step up” on the issue.

Independent councillor John Buckley said the Government should impose a levy, as it does with motor insurance, whereby everybody pays extra money on their premium to ensure that any driver hit by an uninsured person is still covered. 

He said the same principle could be applied to flooding and he was back by his colleagues on this. Mr Buckley’s house was flooded in Midleton in 2015 and he has had no cover since.

Independent Ireland councillor Danny Collins said businesses in his hometown of Bantry who still have flood cover will not claim because their premiums will go through the roof or they will be denied cover they next time they renew.

Both he and Ms Ahern said the Government-assisted compensation scheme operated by the Red Cross is cumbersome and pays out nowhere near what the actual damage cost. Ms Ahern estimated that the grant aid she received through the Red Cross paid for about one third of the damage to her property.

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“The Bantry major flood defence scheme won’t properly start until 2031. It is my understanding that insurance companies won’t renew cover for five years after it is completed to ensure it works? God knows when the completion date will be,” Independent councillor Finbarr Harrington said.

Fine Gael leader on the council Michael Hegarty said he is aware of one case in East Cork where a property owner was refused cover because they were on a "mapped area" of concern adopted by insurance companies to disqualify people from getting cover.

Mr Hegarty said this was finally resolved by an insurance broker who pointed out that the person’s property was so far away from potential danger it was almost impossible that it would be flooded.