This morning the Minister for Finance and Public Expenditure & Reform, Paschal Donohoe TD, announced that the next valuation date for the Local Property Tax (“LPT”) has again been deferred. It is now scheduled to take place on 1 November 2020 instead of 1 November 2019, meaning that there will be no change in LPT bills until 2021.
What is the LPT?
LPT is a self-assessed tax charged on the market value of residential properties. Liable persons must pay their LPT liabilities on an annual bases.
What is the Valuation Date for LPT?
The valuation date is the date on which property owners are required to establish the market value of their properties.
The first valuation date for the purpose of the tax was 1 May 2013, when the tax was introduced. The next valuation date was set to be 1 November 2016. The reason for the second valuation was to ensure that property owners were paying tax at the correct rate, reflecting the true current value of their properties and not a historic value.
Legislative changes in 2015 then deferred the next valuation date by three years to 1 November 2019. This deferral was to alleviate the financial pressures that property owners faced in 2016.
Further Deferral of the Next Valuation Date
The decision to further defer is to allow the Oireachtas Budgetary Oversight Committee time to consider the LPT review report recently published by the Interdepartmental Group in March 2019, which report suggests restructuring the current system. For full report and synopsis, click here.
The Minister for Finance, Public Expenditure & Reform, Paschal Donohoe TD, briefed Government Tuesday evening on the report and the various suggested changes to LPT. When doing so, Minister Donohoe stated that the goal remains “to provide relative stability to all taxpayers in their LPT bills and to ensure that any increases are modest and affordable”. Minister Donohoe also said that he is “conscious of the importance of maintaining simplicity in the operation of LPT which was a major success factor in its introduction”.
Impact of the Deferral
With increased property prices, this announcement puts property owners in a very advantageous position. In addition, the exemption which was enjoyed by newly constructed properties appears to also be extended to 1 November 2020.