Dáil Éireann Debate, Tuesday - 3 March 2015
208. Deputy Terence Flanagan asked the Minister for Finance his plans to link the rate of local property tax to a household's earnings and ability to pay; and if he will make a statement on the matter. [8977/15]
View answerIn designing the Local Property Tax (LPT), due regard was given to issues such as ability to pay. The Finance (Local Property Tax) Act 2012, as amended, provides for the possibility of deferring the charge to LPT in certain circumstances to assist individuals who may have difficulty paying the tax. To qualify for a deferral, the residential property must be occupied as a sole or main residence. The gross income thresholds for a full deferral are €15,000 for a single person and €25,000 for a couple, whether married persons, civil partners or qualifying cohabitants. A person may claim a deferral if their gross income will not, "as can reasonably be foreseen at the liability date" exceed these thresholds in that year.
A deferral of up to 50% of the LPT liability will be possible where the gross income of the liable person does not exceed €25,000 for a single person or €35,000 for married persons/civil partners/cohabitants.
The full and partial deferral thresholds may be increased in the case of properties occupied as a sole or main residence and subject to a mortgage. In such cases, the gross income thresholds may be increased by 80% of the mortgage interest payments. The deferral option in such qualifying cases will apply until the end of 2017.
Interest of 4% per annum will apply to any amounts deferred. Where a liable person no longer satisfies the necessary conditions, amounts deferred prior to the date on which eligibility ceased may continue to be deferred. The deferred amount, including interest, will attach to the property and will have to be paid before the property is sold or transferred. Any amount deferred will be a relatively small part of the overall value of the property, even where the deferral lasts for a number of years.
The LPT legislation also provides for the possibility of a deferral for liable persons who cannot without excessive hardship pay their LPT when it becomes payable, as a consequence of a significant and unexpected financial loss or expense. Further information on this deferral option, including Revenue Guidelines, is available from: http://www.revenue.ie/en/tax/lpt/hardship-grounds.html
Where a liable person does not qualify for, or does not wish to avail of, a deferral, phased payment of LPT can be used to assist with budgeting. Taxpayers have a wide choice of payment options for the LPT from which they can choose the method most suited to their individual circumstances.
