18 Sep 2019, 09:58
The Committee on Budgetary Oversight has called for measures which will protect the stability of the LPT revenue, while minimising the exposure of residential property owners to possible increases in the valuation of their properties.
In advance of the proposed November 1 revaluation date, an Interdepartmental group was established to examine LPT in the context of property price developments. The Minister for Finance has postponed the revaluation process to allow for further consultation. The next revaluation date is now November 1, 2020.
The Committee’s report noted that the Minister for Finance has deferred the revaluation process on two occasions to date, and that this approach is not in line with the recommendations of the Inter-Departmental Review Group.
The Committee’s report explored the scenarios for revaluation in detail, and it recommended that the Minister consider either Scenario 1 or Scenario 2 over No policy change, and three other options, as a means to futureproof the LPT system from the volatility of property prices.
The Committee report also recommends that consideration should be given to increasing the deferral income threshold from €15,000 to €18,000 for a single person, and from €25,000 to €30,000 for a couple.
On the topic of exemptions, the Committee endorses the recommendation made by the Review Group to remove the exemptions currently in place for unsold trading stock of builders/developers in May 2013 or properties sold by them between January 2013 and October 2019, and properties purchased by “first-time buyers” in the period between January 2013 and October 2013.
The Committee also endorses the recommendation to regularly review all exemptions and to keep the range of exemptions to a minimum. This will help to maintain a broad revenue base and reduce inequalities.
Committee Chair, Colm Brophy TD said: “Given the analysis heretofore in this report, the Committee recommends that, due to the distributional impact and simplicity, either Scenario 1 or Scenario 2, as set out in the Review Group Report, should be pursued. Scenario 1 is marginally more progressive.
Deputy Brophy added: “The Committee notes the importance of maintaining simplicity and transparency for taxpayers. Further, from an administrative perspective, a costly and complex system runs counterproductice to the objective of generating additional net revenue.”
Read the LPT Report and learn about the Committee’s recent reports, statements and membership here