The head of the country's biggest local authority has criticised the Local Property Tax (LPT) for being "extraordinarily disappointing."
In an interview with the Irish Independent, Dublin City Council chief executive Owen Keegan said the Government had withdrawn funding on the basis that local authorities had additional funding from the LPT. But this amounted to just €4m a year, he said.
The rationale for the LPT had been "undermined" because of the limited impact it had on council finances he added.
Figures from the Department of Housing, Planning, Community and Local Government show that city and county councils across the country will have collected €473.5m in LPT this year. Dublin City Council levies €77.5m, but 20% or €15.5m will be returned to the so-called 'Equalisation Fund' and dispersed to smaller councils.
Councillors also reduced the rate by 15%, resulting in another €11.6m being lost. Mr Keegan said that instead of being left with around €50m in additional spending, the Government cut funding so the council ended up being just €4m a year better off.
"The property tax has been extraordinarily disappointing," he said. "The liability of properties in Dublin City Council, if we applied the full rate, would be around €80m. Some 20% is taken to fund other local authorities, which is fine and was a government decision. The members reduced it by 15%. The balance - all bar €4m - was substituted for capital and current grants."
He added, "The discretionary impact for us, from €80m, was €4m. It is effectively a national property tax. It's being spent on substitution for capital and revenue grants. My budget is around €800m, it is really of marginal consequence."
Source: www.businessworld.ie