Dún Laoghaire-Rathdown councillors have rejected a bid by the council’s management to raise the level of local property tax.
For the last three years councillors have taken advantage of a rule which allows them to reduce by 15 per cent the maximum amount of property tax in their administrative area.
A majority of councillors on Monday voted down a proposal that this year the reduction offered to householders would drop from 15 per cent to just 5 per cent. The majority of councillors also voted down a compromise proposal from the Labour Party which would have seen homeowners offered a discount of 10 per cent off the maximum chargeable.
On the other side of the city, however, elected members of Fingal County Council voted in favour of a higher property tax, meaning an extra €2 million will be available for its 2018 budget.
Fingal now becomes the first Dublin authority to impose a 10 per cent reduction as opposed to the maximum allowable reduction of 15 per cent, and the new rate will be in effect for one year.
Members of the council voted 20-17 in favour of the 10 per cent adjustment, meaning householders will pay 90 per cent of the charge usually levied by Revenue.
In real terms, it means the owner of a house worth between €350,000 and €400,000 in Fingal will pay €608 next year compared to €573 this year. Homeowners in areas where local authorities have not imposed any reduction must pay €675 on a property of the same value.
Labour motion
The successful motion to reduce Fingal’s variation was put forward by Labour Party councillors Duncan Smith and Brian McDonagh, and was supported by members from Fine Gael, the Green Party and a selection of Independents.
Fianna Fáil, Sinn Féin and Solidarity representatives were principally in favour of retaining the 15 per cent reduction.
The council faces a budgetary shortfall of €8 million for 2018, and Fingal County Council chief executive Paul Reid said an increase in commercial rates will also be sought to address the overrun.
Solidarity councillor Matthew Waine accused the authority of “divide and conquer” tactics in regards to the vote, while Sinn Féin’s Paul Donnelly said the use of a housing crisis to justify an increased property tax was “wrong”.
In Dún Laoghaire-Rathdown, council chief executive Philomena Poole appealed to councillors to consider the “very severe” financial position facing the authority.
Each 1 per cent of local property tax would provide an additional €518,000 for the council’s budget, she said, adding that the decision to vary by the full 15 per cent would cost it €7.8 million.
However, the majority of councillors argued that home owners should be given the full reduction allowable .
‘Dublin tax’
A number said the local property tax was “unfair” and “a Dublin tax” as home prices in the capital and Dún Laoghaire-Rathdown in particular, were higher than elsewhere in the State. This meant that locals bore a disproportionate burden when it came to the tax, they said.
Cllr Michael Merrigan (Independent) said 20 per cent of local property tax was shared with other local authorities as a balancing measure making it “a tax raised locally for central funds”.
He said because of the high property prices in Dún Laoghaire-Rathdown the council would be subsidising other local authorities “and we have no control over how they spend their money”.
Proposing a full 15 per cent reduction, Cllr John Baily (Fine Gael) said Fianna Fáil, the Greens and Fine Gael had agreed to pass on the maximum reduction and would stand behind that.
Cllr Ossian Smyth (Green Party) said the tax was inequitable as 1,000 acres of development land in the council area was not being charged the tax, giving property developers a “free pass” while householders had to pay.
Cllr Shay Brennan (Fianna Fáil) said the local property tax was “a Dublin tax” and it had been agreed in previous years the correct response was to offer homeowners the maximum discount “and we stand behind that”.
Calling for a compromise of a 10 per cent rather than 15 per cent reduction in the maximum charge, Cllr Peter O’Brien (Labour) said the compromise would provide some €2.8 million for the council’s coffers. His Labour colleague Cllr Alex White, a former minister, said it was an “oxymoron” that councillors from the left wing would argue against a property tax.
The councillors voted 29 to seven in favour of maintaining the local property tax reduction at 15 per cent for the coming year.
Earlier on Monday, Dublin Chamber of Commerce chief executive Mary Rose Burke urged councils in Dublin to moderate the 15 per cent reduction, saying retention of such a discount would be unfair on city businesses which help fund local authority budgets through commercial rates.
