The Local Property Tax 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 €3 billion for local authorities since its introduction. The taxation of property through a recurring annual tax is less economically distortionary than tax imposed on either income or capital. This is supported by analysis and international experience where, for example, the OECD in 2011 suggested that tax on property is considered the least harmful to growth. It is also the International and European norm. If the tax were abolished revenue from other taxes would have to be raised to make up the difference in funding for local government.
The 2020 Programme for Government includes the following commitments in relation to LPT-
1. To bring forward legislation for the LPT on the basis of fairness and that most homeowners will face no increase.
2. To bring new homes, which are currently exempt from the LPT, into the taxation system, and that
3. All money collected locally will be retained within the county. This is to be done on the basis that that those counties with a lower LPT base are adjusted via an annual national equalisation fund paid from the Exchequer.
I recently announced my intention to defer the valuation date for LPT from 1 November 2020 to 1 November 2021 and that I will advance legislative proposals early in 2021 to implement the LPT commitments in the Programme for Government.
I have no plans to abolish the Local Property Tax.