Dáil Éireann Debate, Thursday - 28 February 2019
13. Deputy Richard Boyd Barrett asked the Minister for Finance if he will provide a progress report on the plans to review the local property tax; and if he will make a statement on the matter. [9763/19]
Amharc ar fhreagraAs the Minister knows, People Before Profit opposes property tax, full stop. We believe the Minister would raise more money and it would be fairer to introduce a wealth tax and would help to get a budget surplus. However, given that property tax exists, he had promised a review at the beginning of last year and said people were deserving of certainty as to the future plans for property tax. Given the dramatic increase in property values and the potential for huge increases in people's property tax liability, what is happening with the review? What can the Minister tell us about what is coming down the line?
A review of the local property tax, LPT, is being carried out by the Department of Finance in conjunction with the Departments of the Taoiseach, Housing, Planning and Local Government and Public Expenditure and Reform and the Revenue Commissioners. The terms of reference require that in conducting the review, the review group is to have regard to the principle of achieving relative stability in the LPT payments of those liable for the tax and provide clear direction on the likely payments faced by households in 2020. This is to inform me in regard to any actions I may recommend to Government concerning the overall yield and its contribution to total tax revenue.
The review group was asked to look in particular at the impact on this tax of property price developments since the original valuation date of 1 May. I expect the review to include an examination of the outstanding recommendations of the 2015 Thornhill review of the local property tax. A public consultation process was conducted on this.
I expect to receive the final report of the review shortly. Once I have considered it, I will bring the report to the attention of Government with proposals for the next steps.
I want to make a few points. First, I believe the Minister owes it to transparent and accountable Government to tell people what will happen with property tax before the local elections. It would be a bit of a scam to wait until after the local elections and then see massive hikes based on the November revaluation date, which is promised.
Second, I would point out to the Minister that there were two major justifications for property tax at the time it was introduced. The first was that it would control property values and stop property bubbles happening again. It clearly failed to achieve that. The second is that it would give extra revenues to local authorities. I want to read a sentence from the Dún Laoghaire-Rathdown transport roads project document. It states: "Since 2015 these grants [the grants from the Department of Transport, Tourism and Sport] were replaced by Local Property Tax income, and, up to 2018, this has resulted in a reduced income to Roads Maintenance of approx. €500K". It has failed to control property prices and it has led to a reduction in the moneys available to local authorities.
What we have seen is a change in property prices. I am well aware of the consequences of all of that and of the concern it has caused for many regarding their future bills. The revaluation date is November. The bills are not due until next January. I will fulfil the commitment I have given to provide clarity and certainty on the matter.
Regarding the impact it has had on local government funding, I believe it has made an important and significant difference to local government funding but it is a decision of all councillors whether they want to increase or decrease it. That in turn has an effect on the resources available to their local authority.
