Donohoe: Property tax is 'here to stay' but rises will be affordable and modest
Finance Minister Paschal Donohoe has insisted that the property tax is "here to stay" and any rises will be affordable and modest when decided on in a year's time.
He was speaking in the wake of a government decision to defer any changes to the tax, a move that has been deemed akin to “cute hoor politics".
Mr Donohoe outlined how a report on the tax had recommended almost 60% of property owners hit be with bills with rises of €200 or more.
The minister said he would now engage with the Oireachtas and parties over the coming months to look at relatively “stable” increases for property owners.
The property tax would play a large role in tax policies in the future, he added.
He said he favoured a widening of the bands for the tax and rate changes. Local authorities would still have the discretion to reduce amounts for their areas, he said.
“I do believe that it is very feasible that we will end up with a change here, that maintains the base of the properties that are covered by this and the low numbers of exemptions. We can end up with an LPT that does not deliver an increase to the majority of taxpayers in this country. And for those that do experience an increase, the majority of those will only see an increase of one band.”
Local property tax increase to be deferred, confirms Donohoe
Minister for Finance Paschal Donohoe has confirmed that an increase in Local Property Tax (LPT) will be deferred for a further year.
“People will now know where they stand until 2021,” he told RTE radio’s Morning Ireland.
Mr Donohoe said he wants to keep and reform the local property tax but he also wants to make sure that homeowners don't see sudden significant increases to their bill.
The decision to postpone any decision on property tax kicks the politically contentious question past the local elections and also probably past the next general election.
The report on the future of the LPT was commissioned by the Department of Finance.
Mr Donohoe said that the levy will continue to be based on the value of the property, but he maintains that most people will not see much of an increase, while who those who have their LPT increased, will move up “only a band.”
He denied that the deferral was in response to fears expressed by “people in South County Dublin”. This was a national issue and one that was very complicated, but it was important that everyone pay their share, he said.
Basing the tax on the market value of the property was the safest way, he added.
Mr Donohoe pointed out that it had always been a case that any increase would have been after the local elections and he believed it would be after a general election too.
He said that work on budget 2020 is getting underway.
"I am working on getting ready for budget 2020. That work is underway. In two weeks time we will be bringing into cabinet an update on our economic forecast now for the coming years.
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The focus of my party is in responding back to the challenge of Brexit, so that's the focus of where my efforts are for the moment. We need to get ready for an election, but I don't see an election for quite a while yet."
