The LPT is an unfair way of levying a tax on people’s homes, especially in the Dublin area. Property prices have risen by almost 20% in our area in the past year. There is no doubt that they will continue to rise, on account of the lack of supply of homes, and credit restrictions.
When our homes are being next revalued for the property tax, we can reasonably expect our LPT bills to go up by 30% or more. And this will happen in an area that has the highest proportion of older people on pensions and fixed incomes (14.5% of people in the DLR area are over 65 compared to the national average of 11.7%) .
A fair tax takes account of ability to pay. A fair tax is one that is predictable and one that people can reasonably plan for. A tax that is connected to swings in market values, with no benefit to homeowners, and no account taken of people’s income or circumstances, is a flawed and unfair tax.
Those of us who see the market value property tax as seriously unfair must begin to campaign for better alternatives. For example, why not link any future increases in LPT to the general rate of inflation (around 2%) rather than the rate of house price inflation?
I will be campaigning for a fairer way.
The Local Property Tax – would a site value tax be fairer?
I met with Professor Ronan Lyons of Trinity College who is an expert on and advocate for a Local Property Tax based on site value rather than on the market value of a home.
In his work, Professor Lyons argues that a tax on the value of the site on which a house is built has several advantages over a tax on the buildings. A site value tax avoids penalising a home owner who builds an extension, or does improvements to make their home more energy efficient.
A site value tax can help to keep property tax down in the longer term. Because site value taxes are also levied on sites and land banks that are zoned residential they deter hoarding of land by speculative developers and wasteful use of scarce land. Over time, this keeps the supply of land more fluid and helps to keep land prices down, with a knock-on benefit for keeping property tax in check.