LTP base valuation change deferred for a year
The 15% increase in the LTP rate paid in Cavan, as voted through by the members of the County Council last Monday, will still stand.
The government has decided to defer the valuation date for the base Local Property Tax (LTP) from November this year to November next year. This relates to the valuations on houses for the purposes determining the relevant property tax bracket.
Homeowners will still have to pay property tax next year, but with this new valuation date, there will be no change in the base LPT rate liability until 2022 now at the earliest.
The 15% increase in the LTP rate paid in Cavan, as voted through by the members of the County Council last Monday, will also still stand.
The valuation date is the date on which property owners are required to establish the market value of their properties. Market values form the basis for calculation of property owners’ LPT liabilities.
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.
Minister for Finance Paschal Donohoe today he will advance legislative proposals early in 2021 to implement the commitments in the Programme for Government in relation to LPT, which are -
· To bring forward legislation for the LPT on the basis of fairness and that most homeowners will face no increase;
· To bring new homes, which are currently exempt from the LPT, into the taxation system, and that;
· 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.”
The move to defer the date of base valuation was welcomed locally by Minister Heather Humphreys and party colleague Senator Joe O'Reilly.
“These proposals will be designed to ensure fairness and that most homeowners will face no increase in their LPT liabilities,” she said.
“They will also bring new homes, which are currently exempt from the LPT or outside of the tax, into the taxation system. The Minister will also seek to promote the other policy objectives that should underpin the tax like protecting the overall LPT yield; maintaining the tax base with a small number of exemptions and upholding the progressivity of the tax.”