Dáil Éireann Debate, Tuesday - 12 July 2022
327. Deputy Carol Nolan asked the Minister for Finance if there are plans to abolish the local property tax; the supports that are available to households that find they cannot afford to pay the tax; if he will consider suspending payment of the tax as part of his response to the cost-of-living crisis; and if he will make a statement on the matter. [37876/22]
View answerThe Local Property Tax (LPT) was introduced in 2013 to provide a stable and sustainable funding base for local authorities and is a significant base-broadening measure. LPT has yielded over €4 billion for Local Authorities since its introduction.
All property owners benefit from the essential local services LPT helps to fund. The proper functioning of these services is important for every community and household. Accordingly, it is equitable that the cost of providing the services should be shared by as broad a spectrum of owners as possible. If the tax were abolished, the funding gap would ultimately need to be met by the Exchequer in the form of increased general taxation. For these reasons, I do not plan to abolish the Local Property Tax.
The Finance (Local Property Tax) (Amendment) Act 2021 fulfils the Programme for Government commitment to bring forward legislation in relation to LPT on the basis of fairness and that most homeowners would face no increase in their LPT liability. The Act provides for a cut in the main rate of the tax and widening of the valuation bands to make the changes affordable. As these changes were implemented for the 2022 LPT year, this meant that the majority of homeowners saw either a decrease or no change in their LPT liability. Where increases arose, the majority were by a single band.
The LPT legislation provides for the possibility of deferring the charge to LPT in certain circumstances to assist individuals who may have difficulty paying the tax. A qualifying person may opt to defer, or partially defer, payment of the tax. Where a person qualifies for a full deferral then 100 per cent of the liability can be deferred. Where a person qualifies for partial deferral, then 50 per cent of the liability can be deferred. The balance of 50 per cent of the tax must be paid. 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. The interest charge is 4% per annum for LPT deferred for years 2013 to 2021; and the rate was reduced to 3% per annum for LPT deferred for the year 2022 and subsequent years. The income thresholds were increased in 2022 and are now €18,000 for a single person and €30,000 for a couple to qualify for a full deferral. The income limits to qualify for a partial deferral are €30,000 for a single person and €42,000 for a couple. It is also possible to apply for a deferral on the grounds of hardship if a person suffers an unexpected and unavoidable significant loss or expense as a result of which a person cannot pay their LPT liability without suffering financial hardship. Further information regarding the deferral of LPT is available on the Revenue website at: www.revenue.ie/en/property/documents/lpt/guidelines-for-deferral-of-lpt.pdf.
I am advised by Revenue that it has engaged extensively with residential property owners who are experiencing financial difficulties, to agree flexible LPT payment arrangements that best suit their circumstances and avoid unnecessary hardship, and Revenue has assured me that this will continue to be the case.
Any property owners experiencing financial difficulties can avail of a wide range of flexible payment options both in respect of 2022 liabilities and for any previous years where liabilities remain outstanding. The full range of payment options, which includes phased arrangements, are available to property owners on the Revenue website at: www.revenue.ie/en/property/local-property-tax/paying-your-lpt/index.aspx.
The LPT payment compliance rate for 2022 currently stands at 95%. Payment of the LPT for 2023 is not due until January 2023, at the earliest.
Finally, property owners experiencing difficulties in meeting their LPT obligations can contact Revenue through MyAccount at www.revenue.ie or by calling the LPT helpline (01) 7383626.
