Minister Donohoe announces deferral of revaluation date for Local Property Tax (LPT) to 1 November 2021

16th September, 2020

The Minister for Finance, Paschal Donohoe TD briefed his government colleagues yesterday (Tuesday) on his decision to defer the valuation date for Local Property Tax (LPT) from 1st November 2020 to 1stNovember 2021.  This decision means that taxpayers will not be faced with increased LPT bills for 2021. 

The deferral of the valuation date will be given effect by a ministerial order under the Finance (Local Property Tax) Act 2012, as amended. The Minister will advance legislative proposals early in 2021 to implement the commitments in the Programme for Government in relation to LPT, which are –

  1. To bring forward legislation for the LPT on the basis of fairness and that most homeowners will face no increase;
  2. To bring new homes, which are currently exempt from the LPT, into the taxation system, and that;
  3. All money collected locally will be retained within the county. This is to be done on the basis that that those counties with a lower LPT base are adjusted via an annual national equalisation fund paid from the Exchequer.   

Commenting on the decision Minister Donohoe said: In taking almost five months to conclude, the process to form a new Government took longer than any of us would have anticipated,  our initial focus and priority has rightly been on dealing with the impact of the COVID-19 pandemic. As with many aspects of our economy, the pandemic has introduced volatility into the residential property market and I am also conscious of the need to allow sufficient time for the Revenue Commissioners to introduce the necessary changes to the LPT regime before any new valuation date. Consequently I have decided to defer the valuation date from 1st November 2020 to 1st November 2021. With this new valuation date, there will be no change in LPT liabilities until 2022 at the earliest’.


“I will be bringing forward proposals for primary legislation to implement the Programme for Government commitments on LPT in early 2021. These proposals will be designed to ensure fairness and that most homeowners will face no increase in their LPT liabilities.  They will also bring new homes, which are currently exempt from the LPT or outside of the tax, into the taxation system. I will also seek to promote the other policy objectives that I consider should underpin the tax i.e. protecting the overall LPT yield; maintaining the tax base with a small number of exemptions and upholding the progressivity of the tax.”



Following a review of the LPT in 2015 by Dr Don Thornhill the previous Minister for Finance proposed to Government that the revaluation date for the LPT be postponed from 1st November 2016 to 1st November 2019. This meant that home owners continued to have their homes valued for LPT purposes on the basis of their 1st May 2013 declared valuation and so were not faced with significant increases in their LPT in 2017 and 2018 and 2019 as a result of increased property values. Minister Donohoe initiated a further review of the LPT which was completed by the Department of Finance in conjunction with the Departments of the Taoiseach, Public Expenditure & Reform and Housing, Planning & Local Government and the Revenue Commissioners. The findings and recommendations of the 2019 Review are summarised in the text below*. The valuation date was deferred from 1stNovember 2019 to 1st November 2020under the Finance (Local Property Tax) Act 2012 (Section 13(3)) Order 2019 [S.I. No. 166/2019].


Notes for Editors

The valuation date is the date on which property owners are required to establish the market value of their properties. These market values form the basis for calculation of property owners’ LPT liabilities. Legislative changes in 2015 and 2019 retained the valuation date of 1 May 2013 for an additional four years up to and including the year 2019 and provided for the next valuation date to be 1st November 2020 instead of 1st November 2016. The deferral of the revaluation date to 1st November 2021 means that taxpayers will not see changes in their LPT liabilities for 2021.


*Summary of the Recommendations of the 2019 Inter-departmental Review of the LPT



  • The Review Group recommends that ideally revaluation should take place as planned on 1 November 2019 if Government is satisfied it provides modest and affordable adjustments. The Group consider that further delays in revaluation may present risks to the long term sustainability of the tax.  
  • The Review Group recommends that valuations should be reviewed every four years. This provides a balance between timely capture of changes in the property market and reducing compliance and administration costs. It would facilitate the regular addition of new properties into the LPT charge. 

Timing of LAF Notification

  • The Review Group agreed that the Local Adjustment Factor (LAF) notification date to the Revenue Commissioners should occur in mid-October except in the year that property valuations fall due for revaluation. In that instance the LAF notification date would be 31 August at the latest, to facilitate Revenue’s processing of the required notification procedure.  


  • The Review Group agreed that a no policy change scenario should be presented along with five alternative methods of calculation. No policy change means that the current central rate would apply to the market value of all residential properties on 1 November 2019. This would produce an estimated yield of €729 million.
  • The Review Group recommended that a target annual yield should be identified in advance for purposes of scenario analysis. This provides a consistent means of evaluating the suggested scenarios for a broad range of taxpayers. For the purpose of the review, the Review Group targeted a yield of broadly €500 million, a modest increase on the 2018 yield of €482m and recent years.
  • On this basis, the Review Group considered five different approaches to the calculation of the LPT liabilities in respect of the 20 existing valuation bands. 
  • Scenario 1 is based on a central LPT rate for all properties and produces a yield of €500 million. The rate is 0.114 per cent for all valuation bands and all local authorities, down from the current 0.18 percent.
  • Scenario 2 is based on targeting individual local authority yields equal to the expected current yield for 2018 without the Local Adjustment Factor (LAF).  The rate in each local authority is adjusted to meet these targets following estimated valuation increases. In Scenario 2, the LPT rates vary between 0.085 per cent and 0.144 per cent (current rate: 0.18 percent).
  • Scenario 3 has been modelled on the basis of a different LPT rate for each valuation band (increasing with each band) and again set to collect the overall target of €500 million (with no LAF). In Scenario 3, the LPT rate ranges from 0.108 per cent in band 1, and increases in increments of 0.001 per cent to 0.126 per cent in band 19 (current rate: 0.18 percent).
  • Scenario 4 is a variation of scenario 3 with one adjustment. Based on Scenario 3, and with the same target of €500 million, it maintains the first valuation band at a liability of €90. The rationale for the floor of €90 is that there are minimum costs incurred by local authorities for the services which they supply to each household. This floor generates an additional €13 million, and impacts by reducing rates for bands other than the first band.
  • Scenario 5 increases all of the valuation band thresholds by 80%. It assumes a rate reduction of 80% to 0.10% (current rate: 0.18 percent). 
  • All of the scenarios involve some households having reduced liability and some having increased liability which may be different in each scenario. Given the different impacts The Review Group considered therefore that it must be a matter for Government as to which, if any, of the options provides for moderate and affordable adjustments. This may impact on the revaluation date.
  • The Review Group recommends that the LPT rate applied to all properties exceeding €1million in market value should remain at 0.25 per cent with one exception.  Scenario 5 is based on broader bands up to €1.8 million and if this scenario is chosen, then the Review Group recommend that the 0.25 per cent rate should apply to properties above the €1.8 million valuation.  

Equalisation and Local Retention

The Review Group recommends

  • That the equalisation contribution from local authorities, equivalent to 20 per cent of their LPT yield, be discontinued and that all local authorities retain 100 per cent of the LPT that is collected in their own local authority area. While this will help to strengthen transparency and accountability it is acknowledged that it may result in an additional cost to the Exchequer in the absence of other changes.
  • The Review Group recommends that to the greatest extent possible the local retention change should be Exchequer neutral with baseline shortfalls being offset by a rebalancing of programme funding (including self-funding or other compensating mechanisms).  DPER and DHPLG would need to work bilaterally on options to mitigate the impact on the Exchequer of the proposed 100% retention in the context of the Estimates process. 
  • The Review Group recommends that the LAF be amended to permit upward only adjustments to a maximum of 15 per cent. 


The Review Group recommends: 

  • That all of the exemptions should be reviewed regularly and kept to a minimum in order to keep the base broad and minimise the impact on those paying the tax. 
  • That exempted properties constituting the unsold trading stock of builders/developers in May 2013, or such properties sold by them (while remaining unused) in the period 1 January 2013 to 31 October 2019, should be liable for LPT from 1 November 2019. 
  • That exempted properties purchased by ‘first-time buyers’ in the period between 1 January 2013 and 31 December 2013 for use as their sole or main residence should be liable for LPT from 1 November 2019. 
  • That all new residential properties built between valuation dates should be retrospectively valued as if they had existed on the preceding valuation date. 


The Review Group recommends: 

  • That most deferrals, such as the deferral option for those taxpayers with lower incomes, should be maintained and some thresholds should be increased. 
  • That the income thresholds for LPT deferrals be reviewed regularly by reference to (i) movements in the CPI, (ii) wage growth in the economy, and (iii) changes in fixed income payments by the State. From the next valuation date, the Review Group recommends that the deferral thresholds be increased to €18,000 for a single owner and €30,000 for a couple  
  • That, as the number of LPT liable persons qualifying for the mortgage interest deferral would reduce over time as the mortgages involved matured, and that the LPT revenue deferred would taper, accordingly the deferral option on the current basis should be retained. 
  • That relief for owner-occupiers aged over 80 years with a long-term illness who are living alone (as recommended by Thornhill (2015)), would be more appropriately considered in the context of the social welfare code rather than through further tax reliefs. Such individuals may also be able to benefit from other reliefs including the ability to defer their LPT liability based on the income thresholds.  
  • That the interest rate which applies to LPT deferrals should be retained at 4 per cent. 

Other Issues

  • On balance, the Review Group does not support deductibility of LPT for landlords. 
  • The Review Group does not recommend the deductibility of management fees in the calculation of LPT. 
  • The Review Group consider some of the recommendations are mutually reinforcing and should be considered and sequenced together. For example the proposed thresholds increases should be done at the same time as the revaluation as they are related in terms of economic growth, wage growth and inflation.