Most homeowners will see their Local Property Tax bill increase next year.
Revaluations of properties are due to take place from November 1st and with prices rising nationally, the increased value of the average home could see many households paying extra – although bands are being widened to void sizeable rises.
Despite this Minister for Finance, Paschal Donohoe, said most increases will be limited with the average rise set to be between €5 and €25.
"The valuation bands will be widened in line with property price growth that we have seen in recent years, and the base rate of local property tax will be amended," said Minister Donohoe.
"The widening of the bands will ensure most property owners will remain in the valuation band that they are currently in."
The minister said property prices have risen by more than one fifth since 2021 when homes were last valued.
"Every property owner will be asked to pay at least a small amount more in property tax from 2026 onwards."
As a result of the changes, local authorities will see revenue from the LPT increase by around €45 million.
According to the CSO, property prices increased by a national average of 23% in the period November 2021 to December 2024.
If revaluation of properties were to proceed in November 2025 without any amendments to the bands or rates, approximately 70% of properties would move up at least one band, which would result in a significant increase in LPT due for most homeowners.
Minister Donohoe earlier brought a memo to Government setting out a number of amendments to the LPT charging mechanism.
With these changes in place, 97% of properties are expected to stay within the same band.
Properties that are valued at €525,000 or less on November 1st will be paying the additional €5 and €25 a year. Properties which are valued above that, will see a higher increase to their LPT charge.
The changes to the Local Property Valuations could see up to 3% of homeowners pay substantially more tax as their home moves to a new tax band.
Minister Donohoe also confirmed that the VAT rate on electricity and gas will not rise from its current 9% .
The VAT rate was due to go up on May 1st to 13.5%, but the minister said he would bring a financial resolution tomorrow to extend the current rate to October 31st.
"This is in recognition of the impact that energy prices are still having on people," he said.
The minister said extending the lower VAT rate will cost €70-€80m.
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