The Finance (Local Property Tax) (Amendment) Bill 2021 passed all legislative stages of the Oireachtas on Friday, 16 July. The Minister for Finance, in commending the Bill to the Dáil, emphasised that the legislation on local property tax (LPT) was brought forward on the basis of fairness, and “that most homeowners will not face an increase in the local property tax”.

The Minister detailed that a key challenge encountered in the review and analysis of the LPT regime was the significant variation of property price increases geographically and the uneven pace and rate of increase in residential property prices since the original valuation in 2013. As such, the most noteworthy section of the Bill is section 24, which provides for a revised method of calculating LPT liabilities.

Section 20 provides that property valuations will be reviewed every four years rather than every three years. This seeks to achieve a balance between the timely capture of changes in the property market and the need to limit compliance costs. It also ensures regular addition of new properties into the LPT charge.

Section 21 provides for new residential properties built between valuation dates to be retrospectively valued as if they had existed on the preceding valuation date. New properties become liable for the LPT charge at the next liability date, which is the following 1 November, and will be valued at the previous valuation date, 1 November 2021.

Section 18 of the Bill provides for a temporary exemption for homeowners affected by pyrite and mica in Donegal and Mayo, as announced by the Minister for Finance in his opening statement to the Joint Committee on Finance, Public Expenditure and Reform and Taoiseach on the pre-legislative scrutiny of the Bill.

The Bill provides for the amendment of the definition of “residential property”, in that the adjoining land to be valued with the house where that land exceeds 1 acre will be specified to be that part that is most suitable for occupation and enjoyment with the house, and also, the reference to “acre” is being changed to “hectare”. See section 5 of the Bill for further details.

The Bill also contains a number of other measures intended to improve the administration of the tax.

There are also provisions contained in the Bill related to vacant properties. Section 31 of the Bill inserts a new section 39A into the Finance (Local Property Tax) Act 2012, which will see questions on vacant properties included in the LPT return. These questions will include:

• whether the property is occupied as a dwelling on 1 November 2021; and
• if unoccupied, whether the property has been unoccupied for 12 months and why.

The Minister confirmed that this information will be used in considering the case for a vacant property tax in future years.

The Bill was signed into law on Thursday 22 July.

More information on the Bill is available on the on the Oireachtas website.