LEO: NO BIG HIKE IN PROPERTY TAX

As prices rocket, Taoiseach vows families won’t face soaring bills

LEO Varadkar has vowed not to raise the property tax – despite rocketing house prices.

The Taoiseach told the Irish Daily Mail that he will move ‘might and main’ to ensure tax bills for individual households will not soar after a revaluation of all Irish homes is carried out in 2019.

His declaration will come as some relief to families worried about paying Local Property Tax bills that could, in some cases, double because of the surge in prices since 2013.

It now appears that liability will apply to only a portion of the revised worth of a home, so property tax remains broadly the same in terms of euro and cents.

However, last night Fianna Fáil called on the Taoiseach to immediately amend

LPT legislation to freeze rates. The tax is based on home valuations that have not been updated since 2013.

Another valuation update is due in November 2019, and many homes will see increases in their liabilities because of rising property prices. The tax is currently levied at a rate of 0.18%, but local authorities have the discretion of increasing or decreasing this by 15%.

The Irish Daily Mail asked the Taoiseach for reassurance for householders after prices rose by more than 12%, yearon-year for two years, in the capital and elsewhere.

Some councils have recently cut LPT by the margin permitted under legislation, after coming under pressure from householders.

‘Local councils have the power to vary Local Property Tax up and down by 15%,’ the Taoiseach said in London yesterday, where he was spearheading Ireland’s bid for the 2023 Rugby World Cup.

‘My own local authority in Fingal has voted to alter it downwards, but only by 10% instead of 15% because they want funds to spend on housing and homelessness. So those are the sorts of decisions being made, and councils have the power to make those decisions.

‘But one thing that has not increased, which we don’t want to see, and which we will do might and main to avoid, is any sudden hike in property tax that would come about because of house revaluations.’

It was put to Mr Varadkar that the economy was back on an even keel and would not need a surge in LPT revenues, as had been required during the financial crisis.

The Taoiseach commented: ‘There has been a very significant increase in property values, particularly in the greater Dublin area, but not just in the Dublin area. I certainly don’t envisage, nor do I want to see, a sudden dramatic hike in property tax, so we will be working hard to avoid that.’

Many homes are facing an increase in liability because of rising property prices.

For example, there has been a 60% increase in house prices in Dublin alone since they hit rock bottom five years ago.

That means that someone paying tax on a home valued at €150,000 would see their bill jump from €315 to €405, or by 29% if the LPT is allowed to increase in line with prices.

The Government already froze property tax back in 2015, when then finance minister Michael Noonan took the decision to postpone a revaluation of the LPT from 2016 until 2019.

Local authorities have called on the Government to provide clarity by next year so that they can fix budgets.

Fianna Fáil has also called for details of plans for the property tax in the Budget.

Barry Cowen, Fianna Fáil’s environment spokesman, last night urged Mr Varadkar to immediately amend the legislation to freeze rates.

‘The Taoiseach made similar comments during the Fine Gael leadership campaign. He needs to put up or shut up about it and amend the legislation to extend the freeze on re-evaluations,’ he said.

Last month, a think tank urged the Government to base the property tax on up-todate valuations.

Public Policy, an independent think tank chaired by Professor Frank Convery, warned the Government that freezing current valuations, which are based on 2013 prices, could expose the tax to constitutional challenge, as occurred in 1982 with local authority

Housing and homelessness ‘Sustaining public support’

rates on agricultural land.

It said that using up-to-date valuations is ‘important in sustaining public support for the property tax’, pointing to the failure to use up-to-date valuations for houses as a significant contributory factor to the abolition of rates on homes in 1978.

It said local authorities could vary the national rate in each county to avoid massive hikes.

senan.molony@dailymail.ie