Dáil Éireann Debate, Tuesday - 2 December 2025
336. Deputy Louis O'Hara asked the Minister for Housing, Local Government and Heritage the way in which the equalisation fund for each local authority is calculated; and if he will make a statement on the matter. [67683/25]
Amharc ar fhreagra337. Deputy Louis O'Hara asked the Minister for Housing, Local Government and Heritage the reason for reduction in equalisation funding for Galway County Council for 2026 given the council’s difficult financial position; and if he will make a statement on the matter. [67684/25]
Amharc ar fhreagra338. Deputy Louis O'Hara asked the Minister for Housing, Local Government and Heritage the equalisation funding for the years 2024, 2025 and 2026 for each local authority, in tabular form; and if he will make a statement on the matter. [67685/25]
Amharc ar fhreagra339. Deputy Louis O'Hara asked the Minister for Housing, Local Government and Heritage the reason Galway County Council consistently receives a lower allocation of equalisation funding; and if he will make a statement on the matter. [67686/25]
Amharc ar fhreagra340. Deputy Louis O'Hara asked the Minister for Housing, Local Government and Heritage the LPT baseline assigned to Galway County Council; the way this baseline is determined; and if he will make a statement on the matter. [67687/25]
Amharc ar fhreagraI propose to take Questions Nos. 336 to 340, inclusive, together.
At the outset, it is important to note that Local Property Tax (LPT) funding allocations are decided in accordance with Government approved distribution policies, and are based on the baselines and estimates of the yield in individual local authority areas.
Central Government has traditionally provided non-programme funding to local authorities; in the form of an annual contribution towards meeting the cost of providing a reasonable level of service in their area. Up until 2014, this was in the form of a General Purpose Grant (GPG), and in 2015, it was replaced by LPT allocations. Under the LPT allocation model, every local authority has a minimum level of funding available to it, known as the baseline. LPT baselines were initially linked, for the most part, to GPG’s.
Following a review in 2023, baselines for each local authority were adjusted in accordance with five criteria: population, area, deprivation levels, an authority’s locally raised income and achievement of National Policy Priorities, with every authority receiving a minimum increase of €1.5m. This led to an overall baseline increase of €75.4m in 2024. A summary report which outlines the weighting and application of the criteria to individual baselines is available at this link:
www.gov.ie/en/department-of-housing-local-government-and-heritage/publications/summary-report-on-local-property-tax-baseline-review-2023/
Building on the baseline increases of 2024, there will be a further increase of €42m to the overall baselines in 2026, in line with the expected increased yield from revaluation expected in each local authority area.
For an authority with yield below the baseline, such as Galway County, the baseline is a key determinant of the final LPT allocation. It should be noted that Galway County’s baseline has seen a significant increase of almost 50% in a three year period;
• Following the review in 2023, Galway County received an uplift in baseline of €5.8m, which was the second largest increase of any authority.
• As a result of the baseline adjustment being applied following revaluation, Galway County Council’s baseline is increased by an additional €1.3m for 2026, thereby resulting in an overall baseline increase of over €7m or nearly 50% since 2023.
If the estimated LPT yield in a local authority area is lower than an authority’s baseline, the authority is topped-up or equalised to that baseline by the Exchequer via the Local Government Fund. Accordingly, the equalisation funding requirement varies from year to year in line with estimated yield, as the specific amount is the shortfall between the baseline and the estimated yield in a local authority area. Two-thirds of local authorities need equalisation support to bring their income from LPT yield up to the baseline level. Galway County Council is one such ‘equalisation’ authority.
Furthermore, local authorities may vary the rate of LPT in their administrative area by up to 15% of the basic rate of the Tax. The decision to vary must be taken by resolution of the Council. If a local authority decides to vary the LPT basic rate upwards; 100% of the resultant additional income is available for the authority's own use. Similarly, if an authority decides to vary the LPT basic rate downwards (by up to 15%), the resultant loss in LPT income is reflected in reduced LPT funding to the authority. The power to vary LPT rates enables elected members to directly influence the level of LPT income they have to meet their expenditure requirements.
The table below sets out a summary of the LPT allocation process and the equalisation funding in respect of Galway County Council for the years 2023 to 2026.
|
LPT Liability Year |
LPT Baseline |
Estimated LPT Yield (before local variation) |
Equalisation funding |
Additional funding arising from local variation decision |
Final LPT Allocation |
|
2023 |
€14,517,890 |
€14,362,329 |
€155,561 |
None |
€14,517,890 |
|
2024 |
€20,309,071 Baseline increase due to baseline review |
€15,299,282 |
€5,009,789 |
None |
€20,309,071 |
|
2025 |
€20,309,071 |
€15,806,419 |
€4,502,651 |
€2,370,963 |
€22,680,034 |
|
2026 |
€21,609,071 Baseline increase due to revaluation |
€17,212,255 |
€4,396,815 |
€2,581,838 |
€24,190,909 |
Detailed information regarding LPT allocations for each year, LPT baselines and equalisation funding, where applicable, is published by my Department at the following link: www.gov.ie/en/collection/ea27d-local-property-tax-allocations/.
