Deferral of revaluation date for Local Property Tax (LPT) to 1st November 2021

September 16, 2020 0

The Minister for Finance, Paschal Donohoe TD briefed his government colleagues yesterday (Tuesday) on his decision to defer the valuation date for Local Property Tax (LPT) from 1st November 2020 to 1st November 2021. This decision means that taxpayers will not be faced with increased LPT bills for 2021.

local_property_taxThe deferral of the valuation date will be given effect by a ministerial order under the Finance (Local Property Tax) Act 2012, as amended. The Minister will advance legislative proposals early in 2021 to implement the commitments in the Programme for Government in relation to LPT, which are –

  1. To bring forward legislation for the LPT on the basis of fairness and that most homeowners will face no increase;
  2. To bring new homes, which are currently exempt from the LPT, into the taxation system, and that;
  3. All money collected locally will be retained within the county. This is to be done on the basis that that those counties with a lower LPT base are adjusted via an annual national equalisation fund paid from the Exchequer.

Commenting on the decision Minister Donohoe said:

In taking almost five months to conclude, the process to form a new Government took longer than any of us would have anticipated, our initial focus and priority has rightly been on dealing with the impact of the COVID-19 pandemic. As with many aspects of our economy, the pandemic has introduced volatility into the residential property market and I am also conscious of the need to allow sufficient time for the Revenue Commissioners to introduce the necessary changes to the LPT regime before any new valuation date. Consequently I have decided to defer the valuation date from 1st November 2020 to 1st November 2021. With this new valuation date, there will be no change in LPT liabilities until 2022 at the earliest.

I will be bringing forward proposals for primary legislation to implement the Programme for Government commitments on LPT in early 2021. These proposals will be designed to ensure fairness and that most homeowners will face no increase in their LPT liabilities. They will also bring new homes, which are currently exempt from the LPT or outside of the tax, into the taxation system. I will also seek to promote the other policy objectives that I consider should underpin the tax i.e. protecting the overall LPT yield; maintaining the tax base with a small number of exemptions and upholding the progressivity of the tax.

Background

Following a review of the LPT in 2015 by Dr Don Thornhill the previous Minister for Finance proposed to Government that the revaluation date for the LPT be postponed from 1st November 2016 to 1st November 2019. This meant that home owners continued to have their homes valued for LPT purposes on the basis of their 1st May 2013 declared valuation and so were not faced with significant increases in their LPT in 2017 and 2018 and 2019 as a result of increased property values. Minister Donohoe initiated a further review of the LPT which was completed by the Department of Finance in conjunction with the Departments of the Taoiseach, Public Expenditure & Reform and Housing, Planning & Local Government and the Revenue Commissioners. The findings and recommendations of the 2019 Review are summarised in the text below*. The valuation date was deferred from 1st November 2019 to 1st November 2020 under the Finance (Local Property Tax) Act 2012 (Section 13(3)) Order 2019 [S.I. No. 166/2019].