THE majority of households will face a tax rise of between €5 and €25 as part of changes to the local property tax that are going before Cabinet today.
Homeowners must assess the valuation of their property every four years to set out which rate they have to pay in their local property tax.
The next valuation date for the local property tax is due to take place on November 1 this year.
The price of property has risen by 23 per cent since the last local property tax valuation period in 2021, according to the Central Statistics Office.
This enormous jump in property prices would mean that almost 70 per cent of homes would climb at least one tax band and face significantly increased payments.
For example, a property valued at €400,000 in 2021 was in Value Band Four which is a basic rate of €405 per year.
This same property would now be worth €492,000 and would jump into Value Band 5 with a tax rate of €495 per year – a €90 increase.
However, Finance Minister Paschal Donohoe will today bring a memo to Cabinet setting out a number of changes to the local property tax mechanism.
These changes will mean that 97 per cent of properties will remain in the same tax band that they were already in.
The remaining three per cent of properties will climb just one tax band.
However, as part of these changes the majority of homeowners will see their annual charge increase by between €5 and €25 depending on the property’s value.
The Programme for Government negotiated by Fianna Fail, Fine Gael and the regional independent group committed to “ensure fairness and stability in local property tax payments.”
The Government also promised to “continue to retain revenue collected locally in the same local authority.”
Minister Donohoe is expected to inform his Cabinet colleagues that the amendments to the local property tax mechanism are expected to achieve the objectives set out in the Programme for Government.
And tax cuts on gas and electricity brought in to lower household bills are set to be extended for at least another six months.
The last Government slashed VAT on gas and electricity from 13.5 per cent to nine per cent in 2022 after prices skyrocketed in the wake of the Russian invasion of Ukraine.
This tax reduction was due to end in May which would have resulted in households across the country seeing their bills rise.
However, Minister Donohoe will today inform the Cabinet that he plans to extend the nine per cent tax cut on energy bills for another six months.
This would see VAT on household gas and electricity bills rise back to 13.5 per cent on October 31 later this year.
Minister Donohoe will tell his Cabinet colleagues that a decision on whether the VAT cut needs to be extended further into the winter will be considered as part.
