Nine local authorities can reduce property tax for homeowners by up to 15 per cent in their areas.

Minister for the Environment Alan Kelly has identified nine local authorities that can reduce the tax while still retaining the same annual funds.

Six local authorities, including the four in Dublin, have been told they have the flexibility to reduce bills by 15 per cent.

These councils are Clare, Wicklow, Dublin City, Fingal, South Dublin and Dún Laoghaire-Rathdown.

A further three councils – Cork City , Cork County and Kildare – have been told they can cut bills by a smaller amount and still retain the funds.

The department said Cork City and County Councils can introduce a 10 per cent cut. Kildare County Council can afford a 7.5 per cent reduction.

Minister Kelly said: “We have also recognised the contribution made by other local authorities with property bases with greater values by providing additional discretionary income for them.

“This will allow local authorities where property tax levels are highest to implement a full 15 per cent reduction of the local property tax (LPT) should the elected members vote for it or alternatively to increase the level of public services that they are providing.

“The local property tax is designed to become a stable and sustainable source of funding and will enable local authorities to become more self-sufficient in terms of their funding.

“This will provide Government with more options in terms of other taxation and expenditure policies in our future budgets.”

Under the current system, councils retain 80 per cent of the monies collected from the property tax, with the remaining 20 per cent channelled into a Government-operated “equalisation fund”.

Mr Kelly also confirmed all local authorities will be funded to their 2015 levels and 80 per cent will be retained locally.

He said: “While local authority members have full discretion over whether to reduce or increase the local LPT rate, I would ask them to be mindful of certain vital local services that could benefit from that funding such as homelessness services.”

The decision to change the rates must be communicated to the Revenue Commissioners by September 30th.