I propose to take Questions Nos. 73 and 80 together.
Local Property Tax (LPT) was introduced to provide a stable and sustainable funding base for the local authority sector, and the underlying principle of the current distribution model is that every local authority should have a minimum level of funding, known as the baseline, available to it to support the provision of local services.The revaluation of Local Property Tax was undertaken by the Revenue Commissioners in November 2021. As committed to in the Programme for Government - Our Shared Future, the move to 100% retention of LPT will take place in 2023; providing for all money collected locally to be retained within the area. This will be done on the basis that those counties with a LPT yield lower than their baseline, continue to be supported via annual equalisation funding. This will ensure that all authorities continue to receive, at a minimum, an amount equivalent to their baseline. For 2023, equalisation funding of €118m will now be met by the Exchequer, an increase of nearly €84m from 2022.
In addition, a move to the 100% local retention model will lead to an increased surplus for those authorities with LPT income above their funding baseline. These authorities shall now retain a greater proportion of that surplus for their own use in 2023; an increase from 20% of the overall yield in 2022 to 22.5% next year. The remainder of the increased surplus will be used to self-fund housing, roads or other services in the local area.
My Department intends to commence a comprehensive review of the LPT allocation model shortly, and this review is expected to conclude in time for the 2024 LPT allocations. With a particular focus on the baseline funding of individual authorities, all potential criteria to determine allocations will be considered in the course of this review, which will involve consultation with relevant stakeholders.