The Old and the New: A Tale of Two Local Property Taxes in Ireland
Ireland levies both a residential property tax and a non-residential property tax. Although the non-residential tax dates back over four hundred years, the residential property tax, at least in its current form, was only introduced in 2013, after years of being without one.
In a new paper for the Institute on Municipal Finance and Governance (IMFG), Gerard Turley outlines the rationale, history, features, and management of the existing non-residential property tax (commercial rates) and the new residential property tax (the Local Property Tax) in Ireland.
The author draws potential lessons from the Irish experience for other countries and identifies future opportunities. He points to the critical role played by the national tax collection agency in terms of administration, collection, enforcement, and audit of the Local Property Tax. He also emphasizes the importance of simplicity in design as well as filing and compliance, combined with the need for a tailored approach to suit local circumstances. The author concludes with suggestions for reform that include more regular revaluations, a move from self assessment to direct assessment, a reduction in the number of valuation bands, a separate rate for vacant or under-utilized properties, and, albeit politically difficult, an increase in the basic residential property tax rate.