- Valuation bands will be widened by 20 per cent, ensuring most homeowners remain in their existing band. A new base rate of 0.0906 per cent will apply.
- Base LPT charges will increases by between 5-6 per cent for properties valued under €1.26 million. Properties higher than €1.26 million, or properties that have appreciated significantly in value since 2021, will pay LPT that is proportionate to these factors. Properties valued at €2.1 million or above will be charged on their actual value.
- An estimated 96 per cent of properties in the State will remain in their existing band, with the majority of 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 which move up a band, will see a higher increase in their LPT charge.
- 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 per cent. The maximum they may choose to vary LPT downwards by will remain at 15 per cent.
The Minister for Finance, Paschal Donohoe TD, has today published the Heads of the Finance (Local Property Tax) (Amendment) Bill 2025 following approval from Government at the Cabinet meeting. This Bill will provide for a new method of calculating Local Property Tax (“LPT”) liabilities in advance of the new valuation period set to commence in 2026, with reference to the self-assessed market values as of 1 November 2025.
The proposed changes to LPT will mean that most homeowners will remain in their present valuation bands. Base LPT charges will increase a small amount, in proportion to property values. A small number of properties will pay a larger amount than before, either as a result of moving valuation band, or due to their existing high value. The next valuation period will last for a period of five years (2026 to 2030), with revaluation to take place again on 1 November 2030.
The income thresholds for deferral of LPT will be adjusted to account for inflation, wage growth and increases in State payments since 2021. This decision follows a recommendation made by the 2019 Review Group on LPT. The existing thresholds will increase by between 30 per cent and 40 per cent, depending on personal status and whether the threshold is in respect of full or partial deferral.
Additionally, a change is being made to the Local Adjustment Factor (LAF), which allows local authorities to vary the amount of LPT collected in their area. From 2026 onwards, local authorities will be able to vary LPT collected upwards by a maximum of 25 per cent. The maximum they may choose to vary LPT downwards by will remain at 15 per cent.
The changes together are expected to generate approximately 8 per cent additional yield for LPT annually, with this additional yield accruing to local Authorities for their discretionary use. The Bill proposes to make a number of other small changes to LPT and other tax provisions.
Commenting after the Government meeting today, Minister Donohoe said: “Together with my Government colleagues, I have worked to find a way that will deliver on our commitment to ensure fairness in relation to Local Property Tax. 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.”
“By asking property owners to contribute a small amount more than they do at present, LPT is projected to yield in the realm of €45 million or 8 per cent in additional funding for local authorities, which will go towards local services. The majority of property owners, being those with properties valued at €525,000 or lower on 1 November 2025, will pay between €5 and €25 extra a year.”
“According to the Central Statistics Office, property prices have increased by a national average of 23 per cent since November 2021. In the absence of any changes to the LPT charging mechanism, approximately 70 per cent of households would go up at least one valuation band as a result of revaluation later this year. It was decided to amend the LPT charging mechanism in order to prevent a significant increase in liabilities for most households. The Programme for Government commits to ‘ensure fairness and stability in Local Property Tax payments and continue to retain revenue collected locally in the same local authority’. I believe that the measures announced today achieve that objective.
“The next step is to prepare the legislation to implement these changes to allow Revenue make the necessary preparations for the valuation of residential properties and the introduction of the new charging structure.”
The General Scheme of the Bill is published below, which includes further detail on the proposed operation of these changes.
It is the Minister’s intention to have the Bill enacted before the summer recess to enable the Revenue Commissioners to make the essential technical and administrative preparations to implement the various changes to the LPT regime in advance of the valuation date of 1 November 2025.
