Homes built after 2013 will be liable for local property tax under plans set to be approved by Cabinet today.
The current tax is based on 2013 valuations, however, homes that were not built at that time are not currently included.
Minister for Finance Paschal Donohoe brought a memo to Cabinet this morning seeking to address the issue, which was highlighted in the Programme for Government.
Sources told The Irish Times that the change is likely to come into effect next year, bringing in taxation for around 100,000 homes which are not currently eligible for tax.
Sources added that the valuation point for the tax will be November of this year.
Cabinet was told that six out of 10 homeowners will not be paying any more than they currently do, while 10 per cent will see a decrease.
However, in addition to homes after 2013 becoming liable for tax, an estimated 33 per cent of those paying property tax will see it go up by one band and a smaller percentage — around three per cent — could face an increase of two bands.
It is estimated that 11 per cent will go down a band, and 53 per cent will see no increase. The changes will bring in an additional €560 million (estimated) annually.
Meanwhile, the current system where some of the property tax is redistributed outside the local authorities will change, meaning 100 per cent will be retained in the local authority.
Currently, 80 per cent of monies raised remains in the area, this will change to 100 per cent by 2023.
A spokesman for the Department of Finance said that the programme for government had committed to bring forward legislation for the Local Property Tax (LPT) “on the basis of fairness and to ensure that most homeowners will face no increase” and to “bring new homes which are currently exempt… into the taxation system”.
“The Minister updated Cabinet this morning about proposed legislation to address the future of the tax in line with these commitments. The Heads of Bill will be published tomorrow,” the spokesman said.
