The Finance (Local Property Tax) Act 2012 (as amended) sets out how a residential property is to be valued for Local Property Tax (LPT) purposes. As LPT is a self-assessed tax, the amount of LPT due on a property is based on the self-assessed valuation at 1 May 2013 that was declared by the liable person when filing the 2013 LPT1 Return.
I am informed by the Revenue Commissioners that compliance and other data in relation to the LPT for 2013 and 2014 were published on 17 April 2014 on the Commissioners website at: http://www.revenue.ie/en/tax/lpt/lpt-stats-0414.pdf. The report includes details of the number of properties in respect of which a Return was filed for 2013 and the amount of LPT collected for 2013 and 2014 by city and county council.
As can be seen from the report, high levels of voluntary compliance have been achieved in each local authority around the country. The report also provides a breakdown of the percentage distribution of properties across the 20 valuation bands nationally (based on Returns filed for 2013), which shows that over 75% of all residential properties were valued at €200,000 or less, which equates to a maximum LPT payment of €315 per annum. The average LPT payment in the eastern region, however, is likely to be higher than the national average given that properties in the region are likely to have higher valuations on average for LPT purposes, reflecting generally higher market values in the east of the country.
While no formal examination has yet been carried out into a possible distortive effect from LPT on the property market, given the average annual level of LPT payable, as a proportion of the consideration paid for residential properties, I am satisfied that LPT is unlikely to be having any distortive effect. This is borne out particularly by the fact that CSO data and other real estate indicators on property market trends over the last year show that values for residential properties in the eastern region are, generally, rising at a faster rate than prices being achieved elsewhere and the volumes of property transactions undertaken are similarly higher in this region.
The Deputy will be aware that section 20 of the Finance (Local Property Tax) Act 2012 (as amended) allows elected members of a local authority to pass a formal resolution to vary the basic rate of LPT by up to 15% for their functional area, which may result in a lower or higher LPT rate applying for 2015.