Politics

Coalition unlikely to make changes to property tax until later in year

Ministers anxious to avoid big rises after review of tax is completed this summer

Tanaiste and Minister for Social Protection Joan Burton: property tax a ‘significant issue’. Photograph: Eric Luke.
Tanaiste and Minister for Social Protection Joan Burton: property tax a ‘significant issue’. Photograph: Eric Luke.
Fiach Kelly
Mon Apr 06 2015 - 01:00

Coalition proposals to ensure that property tax does not rise in line with the increase in house prices are unlikely to be finalised until later in the year.

Tánaiste Joan Burton has indicated that the Coalition will ensure that there are no steep rises in the tax ahead of the general election.

Dublin TDs in particular have expressed concern that the rise in property prices will lead to an increase in the property tax paid by homeowners, since the property tax is based on the value of a home.

Minister for Finance Michael Noonan has asked Dr Don Thornhill, the former civil servant who initially designed the tax, to review its operation. Dr Thornhill is currently receiving public submissions and is expected to report back by the summer.

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Ministers and TDs have identified the November 2016 revaluation of property tax as an issue that could cause political damage in the run-up to the general election and are anxious to ensure there are no big rises.

Spring statement

While dealing with the issue in the spring statement had been considered, Coalition figures now say that is unlikely.

Some sources suggested that Mr Noonan could announce the changes in the October budget, while others said it could be dealt with between the spring statement, due at the end of April, and the budget.

Michael Noonan last week told the Fine Gael parliamentary party he would move well ahead of next year's general election.

Dublin prices

Ms Burton said there had been discussions about property tax, which she described as a “significant issue because of what has happened with the rising property prices in Dublin”.

“I think we are all aware, for some people the valuations could rise very steeply,” she said.

There are mixed views across the Coalition on how to ensure there are no steep rises in the tax, with Labour understood to favour linking it to inflation.

Senior figures in Fine Gael are keen to devolve the administration of the tax towards local government, and give councillors more power to amend its rate.

Councils currently have the power to increase or decrease the property tax by 15 per cent.