The Government is to freeze the amount homeowners pay in local property tax (LPT) until 2019 and is to exempt homes affected by pyrite from the levy.

Speaking in the Dáil during his Budget 2016 speech, Minister for Finance Michael Noonan said he would be making a proposal to Government to postpone the revaluation date for the property tax until 2019.

The move comes as a report on reforms to the levy by former public servant Dr Don Thornhill was published.

The study sets out a number of options for the levy, following concerns that rising property prices in Dublin over the past few years could lead to significant increases in the amount of tax paid by homeowners.

In his report, Dr Thornhill outlined a number of recommendations for the property tax, including delaying revaluation until either late 2018 or 2019 to enable a revised system of assessing liabilities to be introduced.

The report also called for exemptions to the levy for homes that were affected by pyrite.

Mr Noonan said the postponement of the revaluation date would mean that homeowners would not be faced with significant increases in the tax next year as a result of increased property values.

He said legislation to implement the postponement would be brought forward in due course.

The Minister also said he had asked Revenue to agree to a change in procedures for those whose homes are affected by pyrite.

It is estimated that up to 20,000 houses could be damaged by the substance, which can cause major structural issues and cost tens of thousands of euro to fix.

The rate of property tax paid by homeowners from July 2013 to 2016 was based on how houses were valued in May 2013.

A revaluation was due to be introduced next month.

The annual self-assessed tax is charged on the market value of all residential properties in the State and rises in bands, with a cap on the first band at €100,000 and rising by €50,000 thereafter.

Exemption

In his report, Dr Thornhill said the exemption for residential properties purchased from developers or unsold by them should not be renewed when the next revaluation takes places.

He also urged reliefs for properties occupied by individuals with disabilities and said that direct payment of property tax receipts should be made by Revenue to the Local Government Fund, rather than the current system.

Dr Thornhill said the property tax was producing “stable revenue yield for local authorities”.

It is estimated that more than €1 billion will have been raised for authorities from the levy by the end of 2015.

According to the report, compliance rates are high, with more than 96 per cent of homeowners having paid the property tax each year since its introduction.

The Society of Chartered Surveyors Ireland said postponement of the revaluation until 2019 was "welcome and prudent".