COMMENT: Keeping the pin in the property tax grenade

ONE of the most telling indicators that last week’s Budget was softening us up for a general election was the Government’s ambiguity on the future of Local Property Tax (LPT).

Like most unpopular measures, there’s nothing like kicking the can as far down the road as possible. When you hear that a proposal has been handed over to an expert review group, it’s often a politician’s way of saying: “We don’t really want to be dealing with that right now but we also need to create the illusion that we’re doing something about it.”

And so it seemed when the Minister for Finance got up on his toes in the Dáil last week. There was no big announcement about how property tax would be calculated after November 2019, when the current property valuation mechanism will have run its course. There was no confirmation if any further exemptions would be extended to all senior citizens or people with disabilities – a kite that had been flown in the months preceding the Budget.

Instead, Minister Donohue simply said: “I announced a review of the Local Property Tax (LPT) earlier this year, together with a broad consultation process. I understand that the recent changes in property values have caused concern about future LPT liabilities, particularly amongst vulnerable members of our society. I want to restate my commitment that any future changes will be moderate and affordable. The review group’s report will be published in due course.”

So there you have it – clear as mud. We’ve no idea when exactly the experts will come back with their recommendations and we have a vague reference to “moderate” and “affordable” changes.

But what may seem affordable to a highly paid minister could be prohibitive for so-called ‘squeezed middle’ earners as they grapple with extortionate childcare costs and Celtic Tiger era mortgages.

It’s also a racing cert that any adjustment to LPT will only go in an upwards direction, eroding the modest benefits derived from Budget 2019. 

This year, my local authority voted for a 10 per cent reduction in LPT instead of the full 15 percent they are entitled to look for. That means any crumbs from the table I got from the tiny USC changes announced last week will be negated – and that’s without factoring in post-November 2019 increases coming down the line.

Many commentators have interpreted last week’s Budget as a precursor to a general election or a sop to Fianna Fáil. If either turns out to be the case, it is most convenient that a contentious issue such as property tax has been parked until a new Government has been formed or Fianna Fáil have been tied into a new confidence and supply agreement.

Clearly, our politicians have learned a valuable lesson from the water charges debacle which caused electoral carnage in 2016. If candidates do come knocking on your door between now and Christmas, make sure you don’t let them off the hook on LPT.