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Confusion over Property Tax Increase

There has been some confusion in response to the decision taken by public representatives in Cork County Council to increase the rate of Local Property Tax (LPT).

It was announced earlier this week that the rate would increase to 7.5% for 2021, with Cork County Council following in the footsteps of the City Council in voting for the increase. However, headlines had made some indication that the increase was much greater than is actually the case.

In September 2019 the Council voted narrowly to increase LPT to 5% and now this has increased by an additional 2.5%. Local Authorities have the ability to raise or reduce the tax every year up to 15%, and it was this figure that was recommended by the Head of Finance that was required to maintain services provided by the Council in 2021.

In the end a majority was found to increase LPT by 2.5%, after motions calling for a 0% increase and a reduction were defeated. 80% of all tax raised is kept within each relevant Local Authority, while the remaining 20% goes to the Government, who then redistribute that money to other Councils around the country who take in lower rates.

Local Carrigaline MD Councillor, Marcia D'Alton (Ind), took to Facebook to clarify the decision taken, suggesting that the bigger story is not the increase. "Local Property Tax comprises about 5% of Cork County Council's annual income. About 30% comes from commercial rates for which government granted a waiver during COVID-19. Another 30% (ish) comes from government grants and subsidies. Today's decision was taken in the vacuum of not knowing 1) whether government would compensate for that loss in rates income or 2) what grants/subsidies would be issued by government for the running of basic services in 2021. Would you run a business that way? Or more to the point, could you? That's what government expects of local authorities."

In making the decision Fine Gael Council leader, John Paul O'Shea, indicated that his party would only increase LPT if money was ring-fenced for community funding in 2021. Chief Executive Tim Lucey forecasted a gloomy year ahead for budget reductions in light of Covid-19.

Events in arts and culture are expected to face major cutbacks in order to plug the deficit, as authorities look to prioritise the bare essentials in community development. Rhetoric coming from the Chief Executive and Finance Officers don't bode well for those that enjoy visiting or taking part in local St Patrick's Day parades.

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