Dáil Éireann Debate, Tuesday - 4 October 2022
267. Deputy Catherine Murphy asked the Minister for Housing, Local Government and Heritage the process that will be used to consider the amendments needed to the local property tax baselines; if it will include consultation; the timeframe being worked to; if it is intended in the interim to recognise new needs that have arisen as a consequence of population growth; and if he will make a statement on the matter. [48002/22]
View answerEach local authority’s situation is complex and it is important that sufficient time is taken to analyse and assess potential options in that respect. A comprehensive review of the baselines could not commence in time for the 2023 Local Property Tax (LPT) allocation process without reliable and up-to-date data; such as preliminary census data and updated LPT yield data, following re-valuation.
However, in line with the commitment in the Programme for Government – Our Shared Future, some changes have already been made to the LPT Allocation model that will take effect from 2023, namely:
(1) 100% of the estimated yield will now be retained locally within the local authority area where it is collected;
(2) Equalisation funding will now be fully met by the Exchequer, to ensure that all authorities receive, at a minimum, an amount equivalent to their Baseline. This will be at a cost of €118m to the exchequer in 2023;
(3) Those authorities with a surplus, i.e. with LPT income above their baseline, shall now retain a greater proportion of that surplus for their own use; to a maximum of 22.5% of the pre-variation yield as opposed to 20% in 2022. The remainder of the surplus will be used to self-fund housing and/or roads services expenditure in the local area.
My Department intends to commence a comprehensive review of the LPT allocation model shortly, with a particular focus on the baseline funding of individual authorities. This review is expected to be concluded in time for the 2024 LPT allocations. It is intended to establish a working group comprising key stakeholders and, in course of this review, submissions will also be invited for consideration from other interested parties. Previous reviews and studies of local authority baseline funding will also be assessed and considered. It is intended that the updated census data, including population growth, will be taken into account in the context of this review.
It should be noted that LPT yield has remained largely unchanged following the 2021 revaluation by Revenue. Any additional funding requests for the Local Government sector must be agreed with the Department of Public Expenditure & Reform, and will be considered within the parameters of the national fiscal and budgetary situation, and the competing priorities presenting themselves currently at a national level.
Finally, the Department is aware of the current financial environment in which local authorities are now operating and, in recognition of the ongoing pressures, additional support of €60m has been recently secured to assist the sector. The purpose of this additional funding will be to assist local authorities in meeting the increasing costs involved in providing a wide range of services. This funding is additional to the contribution of €333m towards LPT equalisation, payroll and other miscellaneous schemes in 2023.
