Local councils that vote to reduce the Local Property Tax will find it harder to get extra funding from Government, according to the Finance Minister.
Thousands of homeowners are facing increased tax bills after Cabinet signed off on a number of changes to the system.
The changes will see properties built since 2013 charged for the first time and thousands of others facing increased bills when their homes are revalued in November.
Around one-third of homeowners will see their bills increasing by at least €100.
Since the tax was introduced, city and county councils have had the power to increase or reduce the rate in their area by up to 15%.
On The Hard Shoulder this evening, the Finance Minister Paschal Donohoe said any council that does so could struggle to access additional funding from Government should they need it.
“I can absolutely understand and respect the right of local councillors to make reductions in Local Property Tax (LPT),” he said.
“They can do that up to 15%. That is their right; it is an essential part of local government that that ability is there. The majority of local authorities across the country either have left LPT unchanged or they have increased it by 15%.
“So, it is actually only a very small number of councils across the country that have used their discretion to reduce LPT.
“But for those small numbers of ones that have reduced LPT, I do think they need to be conscious then that their case for engaging with Government later on in the year looking for more money is weakened if they have made the decision to reduce a tax they are able to control.”
Dublin City Council is one of a number of local authorities that has voted for a reduced rate of LPT every year since the tax was introduced in 2013.
Last September, councillors did so again despite a warning from Council Chief Executive Owen Keegan that a 30% increase was needed to help plug a €39 million hole in the council’s finances.
Fine Gael, Fianna Fáil and Sinn Féin joined independents in voting for the latest reduction.
Minister Donohoe defended his Fine Gael colleague's decision, noting that they are “looking to play their part in making the tax bill, when it comes in, which for many is a big bill, as affordable as possible.”
“Every local authority is absolutely right to have the power to do that and if Dublin City Council or any other local authority decides they want to cut that LPT bill, I respect their right to do so,” he said.
“But of course then, if they come back to Government later on in the year saying they need more money for particular priorities the question is going to be put to them then as to why the LPT bill was cut.”
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