Dáil Éireann Debate, Tuesday - 21 April 2026
297. Deputy Barry Ward asked the Tánaiste and Minister for Finance if his Department has carried out any estimates into the cost to the Exchequer of implementing an upper limit cap on the cost of local property tax for people on lower, fixed incomes; and if he will make a statement on the matter. [11989/26]
Amharc ar fhreagraLocal Property Tax (LPT) was legislated for in 2012 in the Finance (Local Property Tax) Act 2012. On the introduction of the LPT, the Government decided that a liability to the tax should apply to all owners of residential properties, with no cap on the amount of tax payable, while maintaining a limited number of exemptions from the tax. These factors ensure that liable taxpayers are not charged more to account for a shortfall driven by exemptions or caps on LPT charges.
The design of LPT was considered by an interdepartmental group, chaired by Dr. Don Thornhill, in 2019. The 2019 report noted that, when viewed as a capital tax, property tax can be considered progressive since capital tends to be more heavily concentrated in the hands of higher income earners.
If an upper limit cap on LPT charges were to be introduced, many higher income earners would benefit from such a proposal – it would not be straightforward to design a cap which only applied to homeowners with lower incomes. An upper limit cap on LPT would also lead to distortion. Properties valued at similar amounts could be liable for significantly different amounts of tax, which would raise concerns regarding the equity and fairness of LPT.
Last year, officials in Revenue’s Statistics Branch conducted an extensive modelling and valuation exercise in respect of LPT liable properties for the valuation period 2026-2030. A paper outlining the process was published in September and is available on Revenue’s website: www.revenue.ie/en/corporate/documents/research/property-valuation-technical-paper-2026.pdf
This paper estimated that properties in band 10 or higher – properties with a valuation of at least €1,050,000 – account for approximately 2% of all properties liable for LPT and 13% of the total projected yield from LPT. In that context, introducing an upper limit cap on LPT could lead to a significant reduction in the revenue raised to pay for local services. Any shortfall would have to made up by increases in general taxation, or else lead to cuts to local services.
There are provisions in place to support people who have difficulty in meeting their LPT liabilities. These include a wide range of flexible payment options and a system of deferrals for those who meet certain criteria regarding income. The full range of payment options, which includes phased arrangements, are available to property owners on the Revenue website at: www.revenue.ie/en/property/local-property-tax/paying-your-lpt/index.aspx.
The current system allows for a tax base that is broad and sustainable, while also accommodating households which need assistance to meet their LPT obligations. Introducing an upper limit cap on the amount of LPT charged would be regressive, resulting in an increased tax burden for those who do not meet the cap criteria or a reduction in funding for local services.
