Dáil Éireann Debate, Tuesday - 28 January 2014
199. Deputy Róisín Shortall asked the Minister for Finance the reason the increase between bands one and two of the local property tax is €135, despite the fact the increase between all other bands is €90; and if he will make a statement on the matter. [3826/14]
View answerThe Inter-Departmental Group on the design of a local property tax, the Thornhill Group as it was referred to, recommended the creation of a sufficient number of tax bands to allow property owners to place their properties in an appropriate valuation band with reasonable confidence. The Group considered the owners should be able to do so without potentially being exposed to disproportionate risks if they incorrectly positioned their properties by one or even two bands.
The Thornhill Group considered that grouping all except the most expensive properties into valuation bands (with the rate applying at the mid-point of the bands), could ease the valuation challenges. In devising the bands the Group considered that a balance should be struck between the width of the bands and avoiding substantial liability differences between adjacent bands. The wider the band, the easier it would be to carry out a self-assessment; but very wide bands would run the risk of creating inequities between taxpayers as well as compliance challenges.
Taking account of all aspects, the Group recommended a market value based system of self-assessment involving bands of €50,000 in width, for properties valued between €100,001 and €1000,000. The Group specifically recommended that the tax liabilities on properties valued at less than €100,001 would be a basic charge determined by applying the tax rate to the midpoint value of €50,000. For properties valued at more than €1000,000, tax liabilities would be determined on the self-assessed value using the percentage rates applicable to properties with values in excess of that amount.
The Government accepted the recommendations of the Thornhill Group in this regard and I am satisfied that the current system of valuation bands strikes the appropriate balance between ease of assessment and a smooth progression of liabilities between the valuation bands.
