CONTINUEThis site uses cookies. By continuing to browse this site you are agreeing to our use of cookies. Find out more.
  1. Front Page
  2. News By Topic
  3. Ireland To Review Local Property Tax

Ireland To Review Local Property Tax

by Jason Gorringe, Tax-News.com, London

17 January 2018


The Irish Finance Department is to begin a review of the Local Property Tax (LPT) next month, which will consider the impact on property tax bills of increases in house prices since its introduction in July 2013.

The Irish Government was compelled to introduce a comprehensive property tax regime under the terms of its bailout with international creditors. An initial revaluation of properties for LPT purposes was undertaken in May 2013.

The aim of the review is to provide the Finance Minister with information on any possible measures he might recommend to the Government regarding the revenue yield from LPT and the LPT's contribution to the total tax take. The Finance Department has made clear that it wants revenue from the property tax to be relatively stable, both over the short and long term.

The review will include a consultation process and is expected to conclude in August 2018, when the group charged with undertaking the review will put forward a range of policy options for government consideration.

The LPT is charged at 0.18 percent on the market value of properties worth up to EUR1m (USD1.2m), and at 0.25 percent on any excess value over EUR1m. Property values are organized into a number of bands, and the tax liability is calculated by applying the LPT rate to the midpoint of the relevant band. A "local decision factor" allows local authorities to vary the rate by up to 15 percent.

A previous review of the LPT was carried out by Dr Don Thornhill in 2015. Thornhill recommended that the Government postpone the planned revaluation of properties from 2016 to 2019, which it did.

If no further changes are made to the LPT legislation, property values as at November 1, 2019, will be used to calculate LPT liabilities from 2020.

The latest review will also consider the outstanding recommendations from the Thornhill review. These were that a revised system of assessing LPT liabilities should be introduced, and that the Government should switch from a three-year to a five-year valuation period. He also suggested that the Government should consider moving to a system under which local authorities retain 100 percent of the LPT revenues raised in their areas, and that LPT be re-designated as a local council tax.

Finance Minister Paschal Donohoe said: "Even though it would be 2020 before LPT liabilities would be affected by any property revaluations, it is important that the Government is able to make it its position clear in relation to LPT in a timely way so that households will be aware of its plans for the tax in advance of the November 2019 revaluation date and the associated 2020 and beyond LPT liabilities."

"The current review of the LPT will be informed by 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."

TAGS: compliance | tax | tax compliance | Ireland | property tax | real-estate | ministry of finance | legislation | tax rates | tax reform

To see today's news, click here.

 






Close

Password Reminder

Please enter your email address to receive a password reminder.

 






Tax-News Reviews

Cyprus Review

A review and forecast of Cyprus's international business, legal and investment climate.

Visit Cyprus Review »

Malta Review

A review and forecast of Malta's international business, legal and investment climate.

Visit Malta Review »

Jersey Review

A review and forecast of Jersey's international business, legal and investment climate.

Visit Jersey Review »

Budget Review

A review of the latest budget news and government financial statements from around the world.

Visit Budget Review »



Tax-News+ Updates

Receive FREE daily updates from Tax-News.com, straight to your inbox. Register Now!

For a tailored solution, choose to receive selected news updates for your preferred jurisdictions and topics, with our enhanced Tax-News+ subscriber service. Read more...

 

Stay Updated

Please enter your email address to join the Tax-News.com mailing list. View previous newsletters.

By subscribing to our newsletter service, you agree to our Terms and Conditions and Privacy Policy.


To manage your mailing list preferences, please click here »