Dáil Éireann Debate, Tuesday - 15 June 2021
63. Deputy Richard Boyd Barrett asked the Minister for Finance if it will be ensured that changes to the local property tax take into account the incomes of the homeowners in question; and if he will make a statement on the matter. [31408/21]
View answerThe 2012 inter-Departmental Group which considered the structures and modalities of a property tax recommended that liability to the Local Property Tax (LPT) should apply to all owners of residential property with a limited number of exemptions. Limiting the exemptions available allows the rate to be kept low for those liable persons who do not qualify for an exemption.
At present, Part 12 of the Finance (Local Property Tax) Act 2012 (as amended) provides for a system of deferral arrangements for owner-occupiers where there is an inability to pay the tax and where certain conditions under different categories including, 'Income Level', 'Hardship', 'Personal Insolvency' and also to 'Personal Representative of a Deceased Person' are met. In most cases the property must be the sole or main residence of the liable person. The current income thresholds are €15,000 for a single person and €25,000 for a married couple, civil partners or cohabiting couple. Deferral in respect of half of the local property tax payable is possible, where the gross income is above the threshold but less than €25,000 in the case of a single person and €35,000 in the case of a couple.
The deferred tax remains as a charge on the property and must be paid before a sale or transfer can be completed. Interest is charged on the deferred amount at a rate of 4% per annum and the duration of the relief normally coincides with the valuation period (1 May 2013 to 31 October 2021).
The General Scheme of the Finance (Local Property Tax) (Amendment) Bill 2021 which the Government recently approved provides that, from the next valuation date, the deferral thresholds will be increased to €18,000 for a single owner and €30,000 for a couple. As well as being recommended by the 2019 inter-Departmental Review of LPT this approach was endorsed by the Oireachtas Budgetary Oversight Committee in its September 2019 Scrutiny Report on the 2019 Review. In addition, the rate of interest charged on deferred LPT liabilities will be reduced from 4% to 3% annually.
Where a liable person does not qualify for, or does not wish to avail of, a deferral, they can avail of a wide range of flexible payment options Throughout the pandemic, Revenue has engaged extensively with individual taxpayers experiencing financial difficulties due to the pandemic to agree flexible arrangements that best suit their circumstances, including in respect of LPT liabilities and will continue to fully engage with taxpayers facing financial difficulties.
