News & Events
Local Property Tax (LPT) is a self-assessed tax, charged on the market value of residential properties in the Irish state. Liable people must pay their LPT liabilities on an annual basis. On the 1st June 2021, the cabinet agreed to bring forward legislation that will propose new changes and ammendments to how the LPT currently operates. A statement which outlines these said changes has been provided by the Minister for Finance Paschal O Donohoe. Once this bill is passed, it must pass through a number of various stages (some of which will allow for further amendments) in the Dáil and the Seanad prior to it being enacted.
Here are the relevant updates you need to know:
- The rate bands will be widened for accurately calculating LPT liabilities to ensure that the majority of homeowners will face no increase when properties are revalued on 1st November 2021.
- Property valuations to be reviewed every 4 years.
- New properties will now be brought into the system every November.
- Local authorities to retain 100% of LPT collected in their area.
Under these proposed changes to the current regime, the majority of homeowners are likely to see no change or a decrease in the amount they pay currently in their LPT. Where an increase does arise, the majority will be by a single band of €90, however notwithstanding the significant increases in property values since 2013.
It is noteworthy that the rate of tax is to be cut and the bands will be widened to make the changes affordable and to adhere to the overall structure of the LPT.
The effect of these changes combined with bringing properties built since 2013 into the charge is projected to deliver a yield of €560 million.
The Bill will provide that the valuations will be reviewed every four years and this will facilitate the regular addition of new Irish properties in the state to the LPT.
All new buildings built between valuation dates will be retrospectively valued as if they had existed on the proceeding valuation date and become liable on the next liability date (1 November). This will maximise the LPT base and ensure equity.
Minister Donohoe has said the following regarding this new amendment:
“Together with my Government colleagues, I have worked to find a methodology that will deliver on our commitment in relation to local property tax, that most homeowners will face no increase.
We have decided to both cut the rate of the tax and widen the bands to make the changes affordable. This means that the majority of homeowners are likely to see either a decrease or no change. Where increases arise, the majority will be a single band (€90), notwithstanding the significant increases we have seen in property values since 2013. We have maintained the overall structure of the tax which is broadly understood and accepted.
The next step is to prepare the necessary legislation to implement these changes to allow Revenue make the necessary preparations for the valuation of residential properties and the introduction of the new charging structure.”
It is the intention of the Minister to have the Bill enacted prior to the Summer recess in order to enable the Revenue Commissioners to make the essential technical and administrative preparations to implement the proposed changes to the LPT regime.
How can Cronin and Co help?
Our expert team at Cronin and Co are acutely aware of Revenue updates and how these may affect your expenditure. If you are someone who feels that they might be impacted by these schemes or if you are looking for informed advice, contact [email protected]