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LPT bill to ease effects of home-price rises

The Minister for Finance has published the heads of a bill aimed at reducing the effect of revaluations of property on local property tax (LPT) next year. 

Revenue is due to revalue properties for LTP on 1 November, to cover the five-year period from 2026. 

The rise in property prices meant that most home-owners could have faced significant increases, with the Department of Finance estimating that 70% would move up at least one band without any change to the current rules. 

The Government, however, has proposed changes aimed at keeping most homes in their existing band. 

Reduced base rate 

Under the Finance (Local Property Tax) (Amendment) Bill 2025, approved by Government, valuation bands will be widened by 20%, while a new base rate of 0.0906% will apply – down from 0.1029%. 

Fixed charges will rise by between 5% and 6% for properties valued at under €1.26 million. For properties valued at €1.26 to €2.1million, a rate of 0.25% will be applied to extra value above €1.26 million, while there will be a 0.3% rate applied on any value over €2.1 million.  

The Department of Finance has estimated that, as a result, 96% of properties in the State will remain in their existing band, with most property owners – those with properties valued at €525,000 or lower on 1 November 2025 – paying between €5 and €25 extra a year. 

Properties above that value, or properties that move up a band, will see a higher increase in their LPT charge. 

Indexation 

The bill also provides for the indexation of income thresholds for deferral of LPT, keeping pace with inflation and growth in wages and State payments since 2021. 

Local authorities will now be able to vary LPT upwards by up to 25%, but the maximum cut they can make will remain at 15%. 

Revaluation periods have also been set for every five years. 

The changes mean that LPT is projected to yield around €45 million or 8% extra for local authorities. 

“Given the growth in property prices in recent years, the proposed changes are fair, progressive, and will ensure consistency and stability in the upcoming valuation period,” said Minister Paschal Donohoe. 

9% VAT rate extended

The Government has also agreed to extend for six months the 9% VAT rate currently applied to gas and electricity, which had been due to return to 13.5% from 1 May. 

The lower rate, at an estimated cost of €85 million, will now apply until 31 October. A financial resolution to provide a legal basis for the extension will be brought to the Dáil tomorrow (2 April). 

The Department of Finance says that no decision has been made on any further extension, “which will be considered as part of the normal budget process”.