Changes to Local Property Tax announced

The Minister for Finance, Paschal Donohoe has today published the General Scheme of Finance (Local Property Tax) (Amendment) Bill 2025. The Bill provides for a new Local Property Tax (LPT) valuation period which will commence in 2026 and will last for five years.

LPT liabilities will be calculated by reference to self-assessed market values as of 1 November 2025 and it is estimated that 96 percent of properties in the State will remain in their existing band. The changes are expected to generate approximately 8 percent additional yield for LPT annually for local authorities.

The main changes are as follows:

• Valuation bands will be widened by 20 percent which results in most property owners (those with properties valued at €525,000 or lower on 1 November 2025) paying between €5 and €25 extra a year,
• Base LPT charges will increase by between 5 to 6 percent for properties valued under €1.26 million,
• For LPT liabilities on properties valued between €1.26 million and €2.1 million, the base LPT charges will increase by 7 to 14 percent to reflect the significant increase in property value since 2021,
• Properties valued at €2.1 million or above will be subject to LPT based on the actual value of the property,
• The income thresholds for deferral of LPT will be adjusted to account for inflation, wage growth and increases in State payments since 2021,
• The LPT exemption for properties damaged by defective concrete blocks will be expanded, ensuring relevant properties in Clare, Limerick and Sligo will become eligible for this LPT exemption,
• Subject to a data protection impact assessment, Eircode’s will become a mandatory field in LPT returns, and
• A change is being made to the local adjustment factor which allows local authorities to vary the amount of LPT collected in their area. From 2026 onwards, local authorities will be able to vary LPT collected upwards by a maximum of 25 percent. The maximum they may choose to vary LPT downwards by will remain at 15 percent.

A table comparing the current and proposed LPT charge structure is included in the Press Release. 

Commenting on the changes, Minister Donohoe said:

“Together with my government colleagues, I have worked to find a way that will deliver on our commitment to ensure fairness in relation to Local Property Tax. Given the growth in property prices in recent years, the proposed changes are fair, progressive, and will ensure consistency and stability in the upcoming valuation period.