1. The property tax should remain a key part of the taxation system: Ibec supports the property tax and its role in the broadening of the tax base. As it stands the LPT makes up just over 1% of total government revenue, we believe this should grow over time offsetting damaging taxes on labour. It is disappointing, however, that the introduction of the local property tax has not seen sufficient reductions in the burden of local government funding on business
2. Large ‘once-off’ increases must not damage confidence: Ibec supports the notion of taking steps to moderate large once-off increases in household’s liabilities. It is important, however, that this is done in a way which does not undermine the property tax’s link to market values or undermine confidence in the tax. In this context we favour smoothing the impact of the new valuation over time.
3. The LPT should incentivise efficiencies in local government and support local economic growth: The current 2014 base year may be a barrier to seeking further efficiencies and cost competitiveness in local services. In addition, decisions in reducing the LPT rate by local authorities should first prioritise local economic development and job creation measures.
4. The equalisation fund should not be used to cut the LPT rate: Local authorities benefitting from the LPT equalisation fund should not use it as a mechanism to cut vary the LPT rate in their area. The equalisation process should not leave local authorities in a surplus. Five local authorities did just this in 2015.
5. Social housing should be exempt from the LPT: The provision of social housing is a key Government priority and local government remains the main provider. Social housing is not exempt from the LPT and local authorities pay the LPT on their housing stock. A straight exemption for social housing from the LPT would result in expenditure being purely earmarked for housing needs in the areas where it is most needed and not transferring to other uses such as the equalisation fund.
6. Increases in the LPT central coffers should be used to introduce a competitive “town growth fund”: In order to support the revitalisation of town centres and regional growth, a new competitive fund should be introduced through increased LPT revenue. Projects should be funded on their merits, involve partnership between public and private sectors, as well as leveraging additional funding.
- Ibec submission on the LPT.pdf - 526 Kbytes
Friday, 1 May 2015