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The Government has today (4th September 2014) finalised the implementation of the Local Property Tax (LPT); 80% of LPT will be retained locally to fund vital public services in 2015. The remaining 20% will be re-distributed to provide top-up funding to certain local authority areas that have lower property tax bases due to the variance in property values across the State.

Given that local authorities vary significantly from one another in terms of size, population, public service demands, infrastructure and income sources, the Government has decided that no local authority will receive less income from LPT in 2015 than they received from the Local Government Fund in 2014.

Similarly, the Government is also very aware of the fact that people living in certain local authority areas, particularly our large cities, will pay proportionately more LPT due to the amount of property tax paid in these areas. The Government has, therefore, decided that local authorities who stand to receive more income in 2015 from LPT than they received from the Local Government Fund in 2014 will be entitled to use a certain portion of that additional funding for their own discretionary purposes as part of their normal budgetary process.

That portion will be an amount equal to 20% of the total expected LPT income for each local authority (before any decision to vary rates) or alternatively the full amount of the additional funding where that is less than the value of 20% of LPT income.

Local authority elected members have been given the power to decide whether or not to increase or decrease LPT rates by up to 15% for 2015 and must inform the Revenue Commissioners of their intentions by the end of September.

Minister Alan Kelly, T.D, Minister for the Environment, Community and Local Government, said today, “These measures will provide certainty and balance to the finances of local Government and give councillors a greater say in how their authorities are funded, ensuring 80% of LPT is spent locally. All local authorities will be funded to their 2014 levels. ”

“The Government has today provided certainty in relation to top-ups for those local authorities with lower property tax bases. Nineteen local authorities will benefit from top-ups from the equalisation fund. These measures are necessary to create a balanced system of funding across local authorities.”

“Similarly, we have also recognised the contribution made by other local authorities with property bases with greater values by providing additional discretionary income for them. This will allow local authorities where property tax levels are highest to implement a full 15% reduction of the LPT should the elected members vote for it or alternatively to increase the level of public services that they are providing.

The Local Property Tax is designed to become a stable and sustainable source of funding and will enable local authorities to be become more self-sufficient in terms of their funding. This will provide Government with more options in terms of other taxation and expenditure policies in our future budgets.”

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