Property tax could triple in two years unless Government acts now – warning

Dr Don Thornhill

Niall O'Connor

Property tax could more than triple for homeowners in areas where prices have soared – unless the Government steps in to prevent the latest looming chapter in the housing crisis.

The Government’s adviser on property tax Dr Don Thornhill told the Irish Independent that new measures must be put in place before the property tax freeze ends in 2019.

Dr Thornhill who spearheaded the Government’s renewed property tax proposals, warned that households must not be hit with sudden shocks in taxation.

“We cannot have a situation whereby households are hit with 40pc, 50pc, or even 60pc increases,” Dr Thornhill told the Irish Independent. “Those sort of shocks need to be avoided.”

Property prices were frozen until 2019 under a measure introduced by the previous administration, which was done on the advice of Dr Thornhill.

However, the looming increases will have a greater impact in the many areas where house prices have soared to a larger degree than others.

An analysis of average house prices from the Central Statistics Office (CSO) shows where in the country homeowners will be hit with the steepest rises. Those in Cavan, Athy in Kildare and Arklow in Wicklow are among eight areas where hikes of 250pc are expected.

That means their property tax bills would more than triple after the freeze ends in 2019.

Conversely, some areas will gain. Nine areas will see a reduction in their bills, with homeowners in Loughrea, Co Galway, Ballina in Mayo, and Cahir in Tipperary likely to see a fall of up to 60pc.

But Taoiseach Leo Varadkar told the Irish Independent that he was conscious of the pressures facing households in relation to property tax.


He warned that whatever changes were necessary had not been ironed out.

“In the absence of policy change there’ll be a revaluation in 2019 and then some people, particularly in the cities, will see a very dramatic increase in their property tax.

“I don’t think that should happen. I don’t think people should be facing 40, 50, 60pc increases all of a sudden.

“The most obvious way to alleviate that and make sure it doesn’t happen is to give local authorities more flexibility to vary property tax.

“At the moment they can vary it up or down by 15pc. You could allow them much more power to vary property tax and not to take the windfall.

“The other option is to put off the revaluation for another couple of years, but I think all that does is put off the problem.

“I think one of the big problems businesses are facing at the moment is revaluation of commercial rates.

“They get put off for decades and then all of a sudden people get this massive reduction or increase. I think it would make more sense to have a solution in place for 2019 that would allow local authorities to not take the windfall.

“You do see in large parts of the country where property prices are high and therefore revenues coming into the council are high, like in the Dublin area, local authorities have used their maximum power to reduce the LPT by 15pc.

“That still means people in those areas are paying more LPT than they would in a rural area. So why not give the local authorities more flexibility to reduce it further if they wish?

“But also give them the freedom and responsibility to deal with the consequences of those decisions.

“There’s lots of good local authority spending that could happen.”

Irish Independent

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