I am informed by the Revenue Commissioners that the various types of expenses that can be deducted by a landlord in calculating taxable rental income are specified in section 97 of the Taxes Consolidation Act 1997 and that expenses are not deductible unless they are specifically authorised. In that regard, subsection (2)(b) of that section provides for a deduction in respect of any rate levied by a local authority while subsection 2(d) provides for a deduction for the cost of management of a premises.
Local Property Tax (LPT) is not such a rate and nor does it constitute a cost or expense of management. Rather, it is a tax arising from ownership of a property that is payable regardless of whether the property is let or not.
As indicated in replies to previous Parliamentary Questions, I have accepted in principle the recommendation in the Thornhill report that LPT should be a deductible expense in calculating a landlord's taxable rental income and that this deduction be phased in over a number of years with the start date being determined by the economic and budgetary situation. However, the manner and timing of this change has not yet been considered and will require a change to section 97 of the TCA 1997.
