Politics

Fine Gael to reduce property tax in some areas

Party to launch local election manifesto next week

Taoiseach Enda Kenny: told the Fine Gael Ardfheis that the party’s council candidates would oppose “any increases in commercial rates or local property taxes” if elected to local authorities
Taoiseach Enda Kenny: told the Fine Gael Ardfheis that the party’s council candidates would oppose “any increases in commercial rates or local property taxes” if elected to local authorities
Fiach Kelly
Thu Apr 24 2014 - 01:00

Homeowners in better-off local authority areas may see their property taxes reduced, under Fine Gael’s local election manifesto.

Party sources last night said the manifesto, due to be launched next week, will contain a commitment to reduce the property tax in areas that have high commercial rates bases.

This will favour urban councils in Dublin and elsewhere, and brings Fine Gael into line with a similar commitment already given by its Coalition partners in Labour.

Councils in mainly rural counties such as Leitrim are less likely to see a reduction, given they will need the property tax receipts to fund council services.

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However, the parties committed to reducing the tax must be in control of the councils to implement their policy commitments.

While the majority of property tax collected last year went towards establishment costs for Irish Water, from this year, 80 per cent of all property tax receipts will be retained in the local authority areas where the houses levied are based.

The remaining 20 per cent will continue to go into a national pot and be allocated on a needs basis.

Each council has the power to vary the property tax by 15 per cent, and has been given until September 30th by the Revenue Commissioners to decide what level of cut, or increase, they intend to apply, if any.

However, there is still some confusion among councils as to whether any reduction will be taken from their allocation, or the national pot.

“We’d have to be in control of the councils first but it is more likely in areas around Dublin like Dún Laoghaire, which has the biggest rates base in the country,” a Fine Gael source said.

Earlier this year, Taoiseach Enda Kenny told the Fine Gael ardfheis that the party’s council candidates would oppose “any increases in commercial rates or local property taxes” if elected to local authorities.

The Labour Party has already said it will promise voters in large urban areas a 15 per cent cut in property tax as part of its local elections manifesto.

Tánaiste Eamon Gilmore confirmed the commitment earlier this year, and said in large urban areas where property values were high, people were paying higher property tax than in rural areas and there was scope for a reduction.