Dáil Éireann Debate, Wednesday - 13 July 2022
173. Deputy Ged Nash asked the Minister for Finance the estimated cost to the Exchequer to reduce the interest on deferral of local property tax payments to an annual rate of 0.5% based on the latest available data in tabular form; and if he will make a statement on the matter. [38684/22]
Amharc ar fhreagraThe current annual interest charge on deferral of Local Property Tax is 3%. I am advised by Revenue that the cost of changes to this rate will depend on the time period of deferral. However, based on current deferrals, the annual cost of the reduction outlined by the Deputy is estimated by Revenue to be in the region of €0.1 million.
The rate of interest was examined in the context of the LPT 2019 Review which recommended retaining the previous rate of 4%. The reduced rate of interest recognises that the circumstances in which a person defers the tax charge are very different from those where the property owner simply fails to pay the tax. A review of the interest rate also took place in 2021, in advance of the LPT revaluation. The review took account of the Covid initiative on the warehousing of tax debts, in respect of which a reduced interest rate of 3% applies for late payment of outstanding liabilities. In the interests of consistency and fairness, the Government decided to reduce the LPT deferral rate to 3% and this was provided for in the Finance (Local Property Tax) (Amendment) Act 2021. The 3% rate applies to any LPT that is deferred on or after 1 January 2022.
