Local Property Tax set to soar

Over three quarters of all houses in the city have been ‘self-valued’ at €200,000 or under, according to figures released by Galway City Council in relation to the Local Property Tax (LPT).

Just over 30% of homes in the city have been valued in the €100,000 to €150,000 bracket while a further 27.4% of urban houses are self-valued as being in the €150,000 to €200,000 category.

Almost one in five houses in the city (19.4%) have been valued in the zero to €100,000 price bracket with only 6.5% of houses valued at being worth more than €300,000 which is now close to the average sale price in the city.

City householders though will be facing some major decisions in 2019 when the worth of houses must be revalued by homeowners for Local Property Tax purposes.

If the recovery in house prices continues at its present rate, then it could mean LPT increases of over 50% for homeowners in the city.

The data on the city house valuations was given to city councillors in a report from City Council Chief Executive, Brendan McGrath.

Sinn Féin councillor, Máiréad Farrell had proposed a reduction in the Local Property Tax of 15% – the motion was defeated with the Council voting to leave the LPT at its current rate.

Cllr. Farrell pointed out that current valuations of the LPT were based on the 2013 value of homes but this was set to change based on 2019 valuations.

“We have seen that the value of properties has significantly increased in Galway city in recent times. Since the 2013 valuations, the prices of houses in Galway City has increased on average by 48%. With the rising prices of houses this is set to increase further by the time of the re-valuation in 2019.

“This rise in the value of houses will not only change the amount owed by each household, but may also change the band in which the household sits, therefore increasing the tax even further with households being hit twice,” said Cllr. Farrell.

As things stand in the city, householders with a property valued at under €100,000 pay an LPT of €90 per annum moving up to €225 for those in the €100,000 to €150,000 price valuation and €315 for people in the €150,000 to €200,000 bracket.

Moving up the value scale, there is an annual payment of €405 for homeowners in the €200,000 to €250,000 bracket; €495 for those in the €250,000 to €300,000 bracket and €585 for people in the €300,000 to €350,000 price.

However, city home owners will face some crunch self-valuation decisions in 2019, when all properties are due to be revalued in relation to LPT, with the new valuation clicking in from November 1 of that year.

According to the property website Daft.ie, the average house price in the city last July had risen to €268,535 – many local auctioneers now estimate that figure to be over €300,000.

Daft.ie in July had a figure of €215,000 for the asking price for a three-bed semi in the city; €372,000 for a four-bed bungalow and €449,000 for a five-bed detached.

According to the report presented by Chief Executive, Brendan McGrath at the last City Council meeting, one submission received on the LPT charge read as follows:

“I hope, that if anything, you will consider lowering the LPT which already has a crippling effect on our budget. The cost of living is very hard to meet.

“We don’t see anything being done with the exorbitant property tax. Please do reduce it and give us a break from the relentless taxes,” the submission stated.

However, in the conclusion of his report to the City Council, Mr. McGrath said that the LPT was a vital source of income to the Council which ‘we would like to protect and increase in 2018’.

“An increase would provide Galway City Council with the funding to further enhance the provision of existing services and amenities and to plan for the provision of new facilities and events for the city.

“I would ask you to consider this in your deliberation on any variation in the rate,” said Mr. McGrath.