The expert group which advised on the design of a property tax, the Thornhill Group, considered whether local authorities should be liable as property owners for the Local Property Tax (LPT). Notwithstanding the economic arguments in favour of liability, the group on balance did not favour creating a circular flow of payments. However, the Government felt there could be issues of equity and proportionality in the differing treatment of privately owned properties and properties that are occupied by local authority tenants. While reform of the local authority differential rents system would contribute to horizontal equity between local authority tenants and low income owners, anomalies could arise in cases where local authorities own and rent out a property in an otherwise privately owned housing estate. The tenant in such a local authority property would not be subject to the LPT, but the owners of other properties would be subject to it. The Deputy may be aware that the Household Charge was not payable in respect of houses owned by local authorities. My intention in making local authorities liable for the payment of LPT was to address such anomalies. Section 7 of the Act therefore provides that local authorities will be liable to pay the LPT on their properties in the same way as any other residential property owner, unless the properties in question are used to accommodate people with special housing needs such as the elderly or people with disabilities. Residential properties purchased under the various local authority shared ownership schemes will also be subject to LPT, and in these cases, the individual(s) who purchased the residential property from the local authority will be liable to pay the tax.
In response to submissions from local authorities, approved housing bodies and the Department of Environment, Community and Local Government, section 17 of the Act was amended to deem the chargeable value of local authority properties would fall into the first valuation band of €0 to €100,000 for the first valuation period, from 2013 to 2016. This will result in a charge to LPT for each property of €45 for 2013 and €90 for 2014 to 2016. The payment of the local authorities’ 2013 liability as also been deferred until January 2014. This provision will not apply to residential properties purchased under the local authority shared ownership schemes, only to properties owned by local authorities and those owned by bodies standing approved for the purposes of section 6 of the Housing (Miscellaneous Provisions) Act 1992.
The provision was introduced as a transitional provision to give local authorities and approved housing bodies time to put structures and processes in place for dealing with LPT.
Privately owned residential properties will be subject to the standard valuation mechanism set out in the legislation.
