Fianna Fáil Seanad Group Leader, Senator Catherine Ardagh has warned that the forthcoming property tax revaluation cannot be used as an excuse to gouge hard pressed Dublin home owners for hundreds of millions in additional revenue, and has called for the Minister to clarify his intentions in relation to the Local Property Tax in Budget 2018.
Senator Ardagh was commenting following the publication today of the monthly CSO’s Residential Property Price Index which indicated that house price inflation is accelerating, with a 12.6% increase in house prices across Dublin in the 12 months to July.
“This was the second highest monthly rate of house price inflation since the CSO began recording residential property data in 2013. The CSO have also introduced a technical change to how the index is compiled to make it more representative of house price changes across the country.
The Local Property Tax (LPT) was introduced in 2014 and is based on the self-assessed value of properties in May 2013. The Department of Finance have announced that a revised valuation will be undertaken in 2019.
“The date of the last property tax valuation in May 2013 coincided with the lowest level which property prices reached in the recession. Since then, property values have recovered strongly, with the growth of which far out-stripping increases in disposable income levels.
“In Dublin, for example, the CSO residential property index indicates that average residential prices have risen by 70% since May 2013. For a house valued in 2013 in Band 4 (€250,000 – €300,000) this means that their moving to Band 8 and property tax would rise by €270.
“House prices in Dublin City have risen even faster in value during the period, increasing by 78% on average. This could push many home owners in to band 3 or 4 levels. Each one band increase is equivalent to a €90 tax hike.
By contrast CSO data indicates that average hourly earnings have increased by only 2% since mid-2013. It is clear that there is absolutely no capacity for households to take a massive increase in the Local Property Tax.
“Unless the issue is addressed the total tax take from the LPT could increase from an estimated €460m this year to €760m. This is simply unacceptable at a time when many family budgets are already severely stretched.
“We know Fine Gael’s track record in relation to hidden tax hikes such as the raid on private pensions, the failure to index tax bands and credits and the abolition of the weekly PRSI allowance.
“Their preference has been to try and slip in these increases in a very underhanded manner. I am calling on the Minister for Finance to bring clarity to this matter in Budget 2018 and set out his plans to prevent a massive LPT tax hike for Dublin homeowners,” concluded Ardagh.