Local Property Tax (LPT) was introduced to provide a stable and sustainable funding base for local authorities to support the delivery of critical local services to communities. Every local authority receives a minimum amount of LPT funding for its own use; this is known as the baseline. Local authorities with surplus LPT income i.e. income above the baseline, retain a portion of that surplus, up to 20% of the projected LPT yield for that area, also for their own use. Any remaining LPT above that is used to "self-fund" certain Housing and Roads services in their area. Local authorities that require "equalisation" funding are not required to self-fund.
Irrespective of baselines, each local authority retains 80% of the estimated LPT yield to be collected in its own area. The remaining 20% is used to support "equalisation" funding for those authorities with lower property bases. Exchequer funding is also required to ensure every local authority receives at least its baseline funding. Two-thirds of authorities receive "equalisation" funding support to bring their funding levels up to their baselines.
In 2019, overall LPT allocations to local authorities amount to €503m. In 2020, I expect that LPT allocations will increase to €516.8m. The increase is largely accounted for by the decisions of 19 local authorities to increase LPT rates above the basic rate for 2020. When a local authority decides to vary the LPT basic rate upwards (by up to 15%), it retains 100% of the resultant additional income collected in the local authority area. Likewise, when the rate is reduced, the authority forgoes the income that would have been otherwise collected. The 19 local authorities that voted to increase LPT above the basic rate are expected to increase LPT income by €19.7m, for their own use, in 2020.
Detailed information on LPT, broken down by local authority, including the allocations to each local authority in 2019 and 2020, are available at the following link on my Department's website: