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Setting the Local Property Tax Adjustment Factor

 

The Local Property Tax (LPT), which came into effect in 2013, is an annual tax charged on residential properties in Ireland. In accordance with the Finance (Local Property Tax) Act 2012 (as amended), a local authority may vary the basic rate of Local Property Tax within its own area by a maximum of +/- 15%. New Regulations came into effect in 2022 that allow for a local variation decision to apply for a period of more than one year.

 

The rate of Local Property Tax for 2023 cannot be increased beyond that which currently applies for 2022. However, having considered a range of issues, the Council may decide to leave the rate the same as for 2022.

 

The rate of Local Property Tax in Donegal was increased by 15% for 2020 and was maintained at that rate for 2021 and 2022. The same charges applied in 2022 as applied in 2021 and 2020 (although the Valuation Bands were restructured for 2022 and are now based on property valuations as at 1st November 2021). In Donegal, approximately 78% of properties attracted a charge of €103.50, with a further 13% attracting a charge of €258.75. 91% of Donegal properties attracted charges in the lowest two valuation bands (Band 1 = €1 to €200,000; Band 2 = €200,001 to €262,500).

 

Donegal County Council’s LPT income for 2022 is €26.8m (around 17% of total income). The money collected from the Local Property Tax contributes towards the cost of providing a range of important local Council services including swimming pools, libraries, theatres, public lighting, road maintenance, housing services, fire services, dealing with illegal dumping and littering, community initiatives, grants to community/voluntary groups, beach management, public conveniences, tourism promotion and economic development initiatives, amongst other things.

 

An adjustment in the rate of Local Property Tax would have an impact on the Council’s capacity to deliver these services. For instance, if the LPT rate is reduced, then the income available to the Council will be reduced. This in turn will limit the range and extent of services and supports that can be provided in 2023.

 

Notice of the Passing of a Resolution to Vary the Rate of LPT

 

The Finance (Local Property Tax) Act 2012 (as amended), makes specific provision that a local authority may pass a formal resolution to vary the basic rate of the Local Property Tax for its administrative area by a percentage known as the Local Adjustment Factor. Article 10 of the Local Property Tax (Local Adjustment Factor) Regulations 2022 requires a local authority that has decided to vary the basic rate of the local property tax within its administrative area to give public notice of that decision.

 

In pursuance of the provisions of section 20(2) of the Finance (Local Property Tax) Act 2012 (as amended), notice is hereby issued that Donegal County Council has passed a resolution at a meeting held on 26th September 2022 to the effect that the basic rate of local property tax should stand varied by an increase of 15% for the years 2023 and 2024, with effect from the relevant liability dates, in respect of relevant residential properties situated in the local authority’s administrative area. 

 

The decision to increase the rate of LPT for 2023 and 2024 by 15% of the baseline is not a cumulative increase on the rate of LPT that applied in 2022. The rate of LPT for 2022 was the baseline rate +15% and the rate of LPT for 2023 and 2024 is the baseline rate +15%. The rates of LPT charges in Donegal for 2023 and 2024 will remain the same as the rates that applied in 2022.

 

Signed:            John G. McLaughlin

                         Chief Executive

Dated:              28th September 2022

 

Frequently Asked Questions

 

What is Local Property Tax (LPT)?

 

Local Property Tax (LPT) is an annual tax charged on all residential properties in the State and came into effect in 2013. The LPT is collected by the Revenue Commissioners.

  

What is the Local Adjustment Factor?

 

A local authority may vary the basic rate of the Local Property Tax within its own area by a maximum of 15%. This means that Donegal County Council can either increase or decrease the rate of Local Property Tax in County Donegal by a maximum of 15% of the baseline rate.

 

In respect of 2020, the Council resolved to increase the rate by 15% of the baseline rate. The rate of LPT was maintained at this level for 2021 and 2022. The same charges applied in 2022 as applied in 2021 and 2020.

 

Can local authorities make a local variation decision for more than one year?

 

Yes, the Local Property Tax (Local Adjustment Factor) Regulations 2022 allow for a local variation decision to apply for a period beyond one year.

 

The Council is required to follow the processes as outlined in Regulations and Guidance i.e. full consultation with public, report prepared for elected members, resolution passed, and relevant parties notified. However, for example, the Council may then decide to apply an upward variation of 10% for three years without having to revisit the matter again until the three years have passed.

 

Does the Council have to vary the rate of Local Property Tax for 2023?

 

No, the Council could, having considered a range of issues, decide to leave the Local Property Tax at the baseline rate.

 

What does this mean for the average household?

 

In Donegal in 2022, approximately 78% of properties attracted a charge of €103.50, with a further 13% attracting a charge of €258.75. 91% of Donegal properties attracted charges in the lowest two valuation bands (Band 1 = €1 to €200,000; Band 2 = €200,001 to €262,500 – based on 2021 property valuations).

 

What is the money collected under the Local Property Tax used for in the Council?

 

Donegal County Council’s LPT income for 2022 is €26.8m (around 17% of total income). The money collected from the Local Property Tax contributes towards the cost of providing a range of important local Council services including swimming pools, libraries, theatres, public lighting, road maintenance, housing services, fire services, dealing with illegal dumping and littering, community initiatives, grants to community/voluntary groups, beach management, public conveniences, tourism promotion and economic development initiatives, amongst other things.

 

What will an adjustment in the Local Property Tax mean in terms of Council services?

 

An adjustment in the rate of Local Property Tax would have an impact on the Council’s capacity to deliver these services. For instance, if the LPT rate is reduced, then the income available to the Council will be reduced. This in turn will limit the range and extent of services and supports that can be provided in 2023.

 

When will the Council make a decision on varying the rate of Local Property Tax in Donegal?

 

This decision will be made at a Council meeting to be held in September 2022. 

 

Can I give my views and opinions on any proposal to vary the rate of Local Property Tax?

 

Yes, Donegal County Council would like to hear your views and opinions on any proposal to vary the rate of Local Property Tax in Donegal. We would like to hear your thoughts on the potential effects of varying the basic rate of the Local Property Tax on households, individuals, businesses and on Council services.

 

To make your submission you can write to:

 

Donegal County Council,

LPT Submissions,

County House,

Lifford,

Co. Donegal

 

or email: [email protected]

 

All submissions must be received by 22nd August 2022.  There is no prescribed format for a submission.

 

All comments, including the names and addresses of those making comments, submitted to the Council in regard to this consultation process will form part of the statutorily required report to be presented to a meeting of Donegal County Council. Accordingly, they may also be included in the minutes of that meeting and consequently may appear on the Council's website.

 

 What will the Council do with the submissions that are received?

 

The elected members of Donegal County Council will consider the feedback received from this public consultation as part of the decision-making process. The Chief Executive will provide a summary of the written submissions received in a report to the elected members. 

 

In making their decision on whether or not to vary the rate, the elected members will consider the following:

 

  • Estimated Income and Expenditure for the Council in 2023
  • Financial Position of Donegal County Council at present
  • Estimated Financial effect of the varied rate in 2023
  • Feedback from the Public Consultation

 

 

 

 

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