Dáil Éireann Debate, Tuesday - 4 October 2022
266. Deputy Catherine Murphy asked the Minister for Housing, Local Government and Heritage the formula that will be used to calculate the self-fund element for local property tax; if the final adjustment to the allocations made to local authorities will be impacted by the decision to reduce the local property tax by up to 15%; and if he will make a statement on the matter. [47990/22]
View answerAs committed to in the Programme for Government - Our Shared Future, the move to 100% retention of Local Property Tax (LPT) will take place in 2023. A move to this model will lead to an increased surplus for those authorities with LPT income above their funding baseline.
These authorities shall now retain a greater proportion of that surplus for their own use in 2023; an increase from 20% of the overall yield this year to 22.5% next year. The remainder of the increased surplus will be used to self-fund housing, roads or other services in the local area. The self-funding requirement will be based on the total expected level of LPT in each local authority area before any application of a local variation decision and will not be adjusted if the basic rate of LPT is varied.
Every local authority has the power to vary the basic rate of LPT by up to 15% and the decision to vary the rate is a matter for the local authority itself. If a Local Authority decides to vary the LPT basic rate downwards (by up to 15%), the resultant loss in LPT income is reflected in a proportionate reduction in discretionary income for the Council. Likewise, if a local authority decides to vary the rate upwards, there will be a proportionate increase in such income.
