While many people will hope to have a few euro extra in their pockets after Budget 2018 on Tuesday, the real battle to cut down on household costs could be a few weeks away yet.
That’s because a comprehensive review of the Local Property Tax is not due to commence until after Tuesday’s Budget.
At present, the LPT is levied based on the 2013 valuation of homes. At this time prices were close to their lowest point after the economic crash but have rebounded significantly since then.
With the six-year freeze on valuations due to end in 2019, that could mean that households face significantly higher bills for the LPT when it comes up for assessment in around 12 months time.
Prices in Dublin, for example, have climbed more than 60% from their lowest point.
Even a slight increase in price could result in increased payments of up to €135 per household while most will face their bills going up by at least €90. That could be more if house values move through more than one valuation band which, after the first €100,000, are calculated in €50,000 amounts.
A house valued at €230,000 in 2013 was liable to LPT of €405 per annum. If that price has doubled in the interim, the household will be liable for a hike to €855 in 2019.
Outside of Leinster and the major urban areas such as Cork, prices haven’t risen as dramatically but getting a level of fairness across the board will be difficult.
It is expected that Minister for Finance Paschal Donohoe will signal an intention to review the tax in the Budget with the matter to be debated between then and Christmas.
The Government are understood to be anxious to avoid a sudden dramatic hike in the LPT and prefer progressive base-widening. As a result changes to the tax can be expected.
There is unlikely to be a solution that suits everyone though, making it an even bigger challenge for the Government than next Tuesday’s Budget will be.
What are your thoughts on the matter?
- What changes would you like to see?
- Could you afford an increase in the Local Property Tax rate you pay?
- Is there a fairer way for people to pay a property tax?
Have your say below…