Revealed: What you will pay in property tax under new plan

The overhaul of the tax will also see councils keeping all of the money raised from property taxes, instead of the 80% they can retain currently. 

In addition, 100,000 more homeowners face paying the tax liability from next year after the Government decided to end exemptions on homes built since 2013.

At least a third (36%) of Irish homeowners will see their local property tax go up from next year, and every home in the country liable for the tax will be revalued.

In addition, 100,000 more homeowners face paying the tax liability from next year after the Government decided to end exemptions on homes built since 2013.

The reduced rate, compared to the 2013 formula, will mean that a majority (53%) of homes will either pay the same rate of tax, or see a reduction (11%), while a third of homeowners will see their property tax bill rise by up to €100. A further 3% will climb by over €100.

Speaking about the proposed changes to the regime, Finance Minister Paschal Donohoe says for most homeowners there will be no increase in charges.

"We have decided to both cut the rate of the tax and widen the bands to make the changes affordable," he said.

"This means that the majority of homeowners are likely to see either a decrease or no change.

"Where increases arise, the majority will be a single band (€90), notwithstanding the significant increases we have seen in property values since 2013."

	Proposed - €200k Band 1  + 75% increase in thresholds  (includes higher midpoint rate for bands 12-19)
	BAND	CHARGE
1	1 -200,000	90
2	200,000 -262,500	225
3	262,501 - 350,000	315
4	350,000 -437,500	405
5	437,501- 525,000	495
6	525,001-612,500	585
7	612,501 - 700,000	675
8	700,001- 787,500	765
9	787,501 – 875,000	855
10	875,001 – 962,500	945
11	962,501 – 1,050,000	1,035
12	1,050,001 – 1,137,500	1,190
13	1,137,501 – 1,225,000	1,409
14	1,225,001 – 1,312,000	1,627
15	1,312,501 – 1,400,000	1,846
16	1,400,001 – 1,487,500	2,065
17	1,487,501 – 1,575,000	2,284
18	1,575,001 – 1,662,500	2,502
19	1,662,501 – 1,750,000	2,721
20	1,750,001+	2,830+
	Rate = 0.1029  (fixed charge in first and second bands)

The changes will see valuation bands increased by 75% to account for a rise in house prices since 2013. 

For example, a homeowner paying €405 on a home valued in 2013 at €200,000-€250,000 will pay the same if their home is valued between €350,000-€437,500 on November 1. 

If it is valued higher, they will enter the next band at €495 per annum.

Review

Mr Donohoe said the money payable under the charge will be reviewed every four years.

He also confirmed that people will be asked to value their own homes under the adjusted property tax system which will be based on "fairness" and "affordability".

Wealthy local authority areas will be allowed keep all funds collected from the taxes under the reworked system meaning funding from central Government will have to be allocated to make up the deficit across other councils.

Up until now, 80% of the LPT is retained locally to fund vital public services, the remaining 20% is re-distributed to provide additional funding to certain local authorities that have lower property tax bases due to the variance in property values across the State.

"It is going to take a year to bed in the implementation of the new structure and rate," said Mr Donohoe.

"Across 2023 to 2024 we want to move to a situation where taxes that are raised within a particular local authority are kept within that local authority, but we will also make changes to ensure that no local authorities are worse off as a result of that change happening."

Local Property Tax Changes

Mr Donohoe said the "majority" of homeowners will see a decrease or no change in the amount they pay when the new rates are introduced in November. The current 20 bands will remain in place, but they will be widened and higher-end properties of over €1m also face an increased charge.

There are up to 100,000 homes nationally which do not pay LPT. Properties, including those that have so far been exempt as they were built since 2013, will be taxed based on a valuation of the home on November 1 this year.

The revised method for calculating local property tax Band 1 will be expanded up to €200,000 and band 2 will contains homes valued in the range of €200,000 to €262,500. The LPT charge is fixed at the current charge for bands 1 and 2, which is €90 and €225, respectively.

Mr Donohoe said: "Under the proposed methodology, it was likely that owners of higher value properties could benefit from reductions in LPT liabilities due to the widening of the bands and the reduced rate.

"To address this, we propose that a higher rate should be applied to properties above €1.05m by charging a higher mid-point rate on bands above that level and a third rate be applied to properties above €1.75m.

"Properties in bands 12 to 17, inclusive, between €1.05mand €1.75m, will be charged a mid-point rate made up of 0.1029% on the first million euro and 0.25% on the balance, and properties in band 20 will be charged on individual property prices up to 0.3%."