LOCAL COUNCILLORS SHOULD continue to decide the level of local property tax (LPT) each area pays, according to Communications Minister Richard Bruton.

There has been a lot of speculation over potential hikes in property tax, with Culture Minister Josepha Madigan telling The Irish Independent today that she wants lower rates of property tax in affluent areas, like her own constituency in south Dublin, when the LPT review is completed by the government.

“I would like to see a lower rate in areas with the highest house prices. Residents of south Dublin, for example, should be entitled to reliefs as they could be most affected,” she said.

Currently, property tax is based on the market value of a house, but due to the rapid increase in house prices, there have been concerns about the massive leap in tax homeowners will have to pay.

Frozen

In 2015, the LPT being paid by homeowners was frozen until 2019, meaning that people whose properties had increased in price or had been improved still only had to pay the same rate of tax that they have since the original LPT valuations in 2013.

Another round of valuations were due this year, but because house prices have been constantly rising in the past several years, politicians are concerned that the LPT will rise dramatically when the valuation date of March 2013 is to be reviewed by the government.

Discretion

When asked about whether he would want affluent areas to pay less property tax in the future at the Fine Gael first parliamentary party meeting of the new year today, Bruton said the Taoiseach and finance minister have “long ago signalled” that there will be no big increases this year.

He said the way the property tax is designed, it is the local authorities in each area that have discretion over the rate, and can modify it by increasing or lowering the tax by 15%.

He said it is his view there won’t be “much deviation” from that, however he said the review will determine if the role or discretion of the local council will be “enhanced” in the future.

Bruton said the government wants local councillors – who he pointed out will be running for election this year – to decide the range of property tax liable for their area.

With all this talk about possible property tax hikes, the Independent Alliance has clarified its position, warning that it will “vehemently oppose” any suggestions of an increase both in 2019 and 2020.

“As partners in government, we welcome the recent statement from the Taoiseach indicating that Fine Gael supports our position on this. We have made our opposition to any increase absolutely clear in our submission on the Local Property Tax Review. That opposition will remain, whatever the findings of the upcoming review,” the Independent Alliance members said in a statement.

The statement continued:

No homeowner, large or small, merits any further penalty for owning their own house. Our submission proposes waivers for vulnerable home owners, including the disabled and senior citizens on fixed incomes. We look forward to agreement on reform of this unfairly implemented tax in the near future.