The Government decided that the LPT should be centred on the principles of equity, transparency and simplicity and that a universal liability should apply to all owners of residential property with a limited number of exemptions and reliefs. Limiting the reliefs available allows the rate to be kept to a minimum for those liable persons who do not qualify for relief.
Properties in managed estates, to which management fees apply, would have been purchased by their owners in the knowledge that they would be taking on commitments to partake in, and to fund, the management of the estate, and that it was the intention that many such estates would not be taken in charge by local authorities, nor would it be appropriate for local authorities to do so.
Management fees in these estates can include services such as refuse collection, maintenance of common areas as well as a sinking fund for certain repairs to the buildings, depending on circumstances. These are costs which homeowners in other households have to fund themselves for their own properties.
Revenue from the LPT accrues to local authorities and supports the provision of local services. Local authorities provide a broad range of services in the public realm, which benefit the wider community. The proper functioning of these services are important for the well-being of every community and household. These include: fire and emergency services; road maintenance and cleaning; street lighting; spatial and development planning and other similar services; regulatory and inspection functions and business support services, as well as libraries, parks, and other recreation and cultural public amenities. The benefits of these services accrue to all members of society.
A requirement to pay management fees is not relevant in determining whether a property is subject to the LPT. Accordingly, whilst those who are liable for management fees to property management companies may be exempt from LPT for another reason, or may be entitled to avail of a deferral arrangement under the provisions contained in the legislation, there is no specific exemption for the payment of management fees, nor is there provision to offset the VAT paid on management fees against LPT. There are no plans to change this basis of liability to LPT.
Following the publication of the recent inter-Departmental review of the LPT I have commenced an engagement with the Oireachtas Budgetary Oversight Committee in relation to the appropriate way forward for the tax. In that context I have indicated my willingness to engage with the committee on the issue of taxpayers whose property is located in a managed estate on which the owner of the property is liable to the payment of management fees.