Editorials

The Irish Times view on property tax: Politics comes first

Dublin voters receive cotton wool treatment with changes put on long finger

From an elected representative’s point of view on LPT, however, there is a limited number of businesspeople to offend but a great number of homeowners. File photograph: Frank Miller
From an elected representative’s point of view on LPT, however, there is a limited number of businesspeople to offend but a great number of homeowners. File photograph: Frank Miller
Tue Nov 26 2019 - 19:30

Returning more than one-quarter of all Dáil TDs, Dublin voters will decide the broad composition of the next government. That powerful position is evident in the cotton wool treatment they are receiving from local and national politicians on the local property tax. The four Dublin councils continue to offer residents cuts to their housing tax. Elsewhere, charges have been substantially increased by 20 local authorities or have remained unaltered. Meanwhile, the Government has postponed a decision to reform LPT charges until November 2020.

The local property tax became an issue this week when, in order to plug a financial hole, Dublin city councillors decided to raise commercial rates, along with various parking and toll charges. The increases were criticised by representatives of the business community who complained they were regarded as a soft touch and "the path of least resistance" when it came to raising revenue. It is difficult to disagree with that assessment. From an elected representative's point of view on LPT, however, there is a limited number of businesspeople to offend but a great number of homeowners.

Earlier this year, council chief executive Owen Keegan proposed there should be no reduction in LPT charges to fund city services. But Fianna Fáil, Fine Gael and Sinn Féin councillors ignored that advice and voted for a 15 per cent cut. Later, when a budget was being prepared for 2020, Keegan drew attention to a Government decision to divert €8.4 million in rates, due to the council on Irish Water properties in Dublin, to other local authorities. All hell broke loose. Threats of dissolution followed and Government was blamed for Dublin's financial difficulties.

The abolition of domestic rates in 1997 removed a major source of independent funding for local authorities. Commercial rates continued but councils became increasingly reliant on central funding. Under pressure from the EU to broaden the State’s tax base, the LPT was introduced in 2013. Because of party political considerations, however, it is not working as intended.