Thursday, 11 February 2021

Questions (92)

John Paul Phelan

Question:

92. Deputy John Paul Phelan asked the Minister for Housing, Local Government and Heritage when the new funding model for local authorities will be introduced; and if he will make a statement on the matter. [7489/21]

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Written answers (Question to Housing)

In 2018, the then Minister for Finance and Public Expenditure and Reform initiated an Inter-Departmental review of Local Property Tax (LPT). The purpose of the review was to inform the Minister in relation to any actions he may recommend to Government concerning the overall yield from LPT and its contribution to total tax revenue.

As the LPT review did not primarily concern itself with the allocation mechanism to individual authorities, it was important that a framework be established regarding the allocation of any additional funding that might be available to the local government sector as a consequence of any changes to LPT. Therefore, in May 2018, the then Minister for Housing, Planning and Local Government separately initiated a Local Government Funding (Baseline) Review to help inform the distribution of any such funding that may become available for general operational purposes. The Minister for Finance subsequently decided to defer the next valuation date for LPT liabilities from 1 November 2020 to 1 November 2021 and the finalisation of the baseline review process was deferred.

The Programme for Government 'Our Shared Future', commits to bringing about reforms in the workings of LPT. These reforms will involve bringing new homes, which are currently exempt from LPT, into the taxation system as well as providing for all money collected locally to be retained within the county. This will also be done on the basis that those counties with a lower LPT base are adjusted via an annual national equalisation fund paid from the Exchequer, as is currently the case. It is my intention that an examination of local authority funding baselines will be considered in this context this year.