Minister Donohoe announces changes to Local Property Tax

Minister for Finance, Paschal Donohoe announced changes to Local Property Tax (LPT) which increase the property value bands by 75 percent, reduce the rate of LPT from 0.18 percent to 0.1029 percent and brings most homeowners into the LPT net from 1 November 2021. The valuation date for the years 2022 to 2025 is 1 November 2021. Valuations will be reviewed every 4-years thereafter and will facilitate the regular addition of new properties into the LPT net.  The changes are expected to increase the LPT yield from €482 million to €560 million. 

The number of house value bands remains at 20. Band 1 is expanded from €1 to €200,000 and Band 2 contains values in the range €200,000 to €262,500. The LPT charge is fixed at the current charge for Bands 1 and 2 (€90 and €225 respectively).  The other bands are widened by 75 percent. For properties in bands 3 to 19, a mid-point rate of 0.1029percent will be charged. Properties in bands 12 to 19 (between €1.05m and €1.75m) are charged a mid-point rate of 0.1029 percent on the first €1.05m and 0.25 percent on the balance over €1.05m.  Properties in Band 20 are charged on individual property values as before (0.1029 percent on first €1.05m and 0.25 percent between €1.05m and €1.75m, and 0.3 percent on balance).

Houses purchased from a developer since 2013 and houses purchased or built in 2013 under the Section 8 loophole will no longer be exempt from LPT from 1 November.  The exemption for houses in unfinished housing estates will end and the exemption for houses damaged by pyrite will be phased out.  New properties will be brought into the LPT system each November.

Local authorities retain the power to adjust the standard LPT rate of 0.1029 percent up or down by 15 percent.  LPT revenue will be fully allocated to the taxpayer’s local authority. 

The proposed changes to the LPT regime will be legislated for in the Finance (Local Property Tax) (Amendment) Bill 2021(the Bill). Revenue will make technical and administrative preparations in advance of the valuation date of 1 November 2021.

The Minister intends to have the Bill enacted before the summer recess (currently scheduled for 14 July) to have various changes ready in advance of the valuation date of 1 November 2021. 

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