The Irish government has confirmed that significant changes to the Local Property Tax (LPT) will come into effect from 1 November 2025, in a move aimed at modernising the system and reflecting rising property values. While many homeowners are expected to see a modest increase in their annual bills, new measures have also been introduced to cushion the impact for most.

New Valuation Bands and Adjusted Rates to Take Effect from November 2025

The changes were announced by Minister for Public Expenditure and Reform, Paschal Donohoe, as part of the government’s strategy to maintain a fair and balanced approach to local taxation.

Key Changes to the Local Property Tax

1. Widening of Valuation Bands

To account for rising property prices since the last revaluation in 2021, the valuation bands used to calculate LPT will be expanded by 20%.

• This measure is designed to keep around 96% of homeowners in their current band.
• The aim is to minimise tax shocks for those in rapidly appreciating areas, especially in cities like Dublin and Cork.

2. Adjustment of Base Tax Rate

The standard base rate of LPT will decrease from 0.1029% to 0.0906%, which is intended to offset the effect of increased property valuations.

• Despite this drop, most property owners will still see modest annual increases due to higher property values.
• For many, the change will mean an increase of €5 to €25 per year.

Income-Based Deferrals and Reliefs

The government has confirmed that income thresholds for LPT deferrals will be indexed to reflect wage growth and inflation since the last review in 2021. This change ensures that lower-income households will continue to have access to:

• Full or partial deferrals
• No penalties or interest on deferred payments

This is expected to help pensioners, carers, and lower-income families retain access to relief if they are unable to meet the new payment levels.

Local Authority Powers Expanded

From 2026, local councils will be allowed to:

• Increase LPT rates by up to 25% (previously capped at 15%)
• Continue to reduce LPT rates by up to 15%

This gives local authorities greater control over revenue collection and enables them to better fund public services such as housing, waste collection, parks, and road maintenance.

Government’s Position

Minister Donohoe stated:

“These changes are necessary to keep the property tax system in step with market conditions. The reforms strike a balance between fairness to homeowners and the need for sustainable local government funding.”

The Department of Finance has also confirmed that the next LPT valuation date will remain 1 November 2025, with the updated tax to be reflected in bills issued from January 2026.

What Homeowners Should Do

To prepare for the upcoming changes, homeowners are advised to:

• Check their property’s current market value
• Use the Revenue.ie LPT calculator (when updated later in the year)
• Confirm if they qualify for any reliefs or deferrals
• Ensure their contact and property information is up to date on the LPT system

Failure to pay the correct LPT may result in penalties or deductions from wages or pensions.

Final Word

The Local Property Tax system in Ireland is undergoing important changes designed to ensure it remains equitable, transparent, and reflective of today’s housing market. While many households will see small increases, the majority will stay within their current bands due to widened thresholds and a reduced base rate.

As always, staying informed and compliant will help homeowners avoid penalties and understand their financial obligations under the updated framework.

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