Owners of some of the most high-value homes in the country will pay less Local Property Tax (LPT) under the first overhaul of the regime since its introduction in 2013.
A person in Dublin with a property now valued at €2.61 million, up 11 per cent on 2013 values, will face a tax bill of €5,760 – €135 less than their current payment, according to a scenario set out by the Department of Finance when outlining the changes on Wednesday.
In contrast, a property owner in Dublin whose home has increased in value by 90 per cent sine 2013 to €475,000, will see their tax charge increase by €90 to €495.
Minister for Finance Paschal Donohoe defended the fairness of the new system of calculating the tax. He said there are other examples of people with high-value homes who will pay more than they do at present.
Among the other illustrative examples provided by the department is someone whose home is now worth €1.6 million – an increase of 45 per cent on 2013 values – that will mean their property tax liability rises by €439 to €2,502.
Mr Donohoe also said the highest value homes will face a higher 0.3 per cent tax rate on a portion of the value of their home above €1.75 million.
He said the reason this rate was brought in for higher-value properties was “to have a tax code that is progressive, and to have a bill that relates to the value of the home.”
He also said: “If you look at what we have done on the issue of equity. We have brought in a broader rate from €1 to €200,000 precisely to deal with the issue that homes that have a lower value could have seen the largest increase in percentage terms of the value of that home.”
Examples of reductions
Mr Donohoe said the LPT will be more progressive because the entry bands have been widened and there is a higher rate for people with the highest value homes.
He said the department has also provided examples of instances where people will see reductions.
The changes will result in higher charges for 36 per cent of homeowners, no change for 53 per cent and reductions for 11 per cent of householders, according to the department.
Other examples provided are a homeowner in Dublin whose property is now worth €445,000, up 71 per cent since 2013. Their LPT bill will remain the same at €495.
A householder in Cork whose property is now valued at €300,000 – an increase of 28 per cent – will see their LPT drop €90 to €315.
A person in the midlands whose home is valued at €186,500, an increase of 133 per cent will remain in Band 1 and see no change in their payment of €90.
Similarly, a property owner in Galway city whose home is now worth €240,000, up 95 per cent on 2013 values, will see their rate stay the same at €225.
Someone in a Border county whose home is now valued at €140,000, up 115 per cent, will continue to pay €90.
