Fianna Fáil will cap the revenue that can be raised through property tax but will give local authorities more flexibility to set their own rates if it is in government after the election.

In the October budget, the Fine Gael-Labour Coalition confirmed property tax rates would be frozen until 2019, which means that reassessing the property tax will be an issue for the next government.

In an interview with The Irish Times, Fianna Fáil leader Micheál Martin said his party would also like to see all proceeds of the property tax stay with local councils.

Currently, 80 per cent of the property tax raised within each council area stays with the local authority and the remaining 20 per cent goes into a national pot and is allocated on a needs basis.

Councils also have the power to increase or decrease the level of property tax by 15 per cent. However, the valuations used for property tax have not changed since the inception of the tax in 2013. A revaluation due to take place this year was postponed because of concerns that rising property prices in Dublin over the past few years could lead to significant increases in the amount of tax paid by homeowners.

Political parties will be expected to outline their approach to the tax once the current freeze ends in September 2019.

Mr Martin says Fianna Fáil would not increase property tax for the next five years.

“It will not increase under us during the lifetime of the next Dáil,” he said. “There will be anomalies that will arise [and] we will address those, but in a way that keeps a cap on the revenue that will be raised by any local authority in terms of property tax. Our view is that ultimately all of the property tax, all of it, should go to the local authorities. It allows for more flexibility locally. Property tax is very high in Dublin – there should have been a better effort to connect these taxes to ability to pay,” he said.

New homes built between 2013 and before the revaluation date of October 31st, 2019, are exempt from property tax. A Fianna Fáil spokesman said the current freeze creates an anomaly in the longer term “whereby properties built after 2013 are taxed on a higher valuation basis than older properties”.

“We will deal with this anomaly by giving each council greater latitude to set its own rate subject to the proviso that it cannot increase the overall amount it raises from property tax,” the spokesman said. “In this way we will ensure that homeowners are not faced with increases in property tax simply because property prices are rising.”

The party would also “address the issue of ability to pay” and provide a discount to homeowners paying management fees.

Fianna Fáil finance spokesman Michael McGrath has said the party would also reduce the level of deposit interest retention tax by 8 per cent – from 41 per cent to 33 per cent – over the lifetime of the next Dáil.

Mr McGrath said this would make it “more attractive for people to put money aside”and the party would double the tax-free threshold for capital gains tax to encourage small investors.