CORK City councillors have voted to increase people’s property tax payments by 9% next year.
The decision to increase the local property tax (LPT) was passed by the majority of councillors at a full council meeting yesterday evening.
Councillors had the option to increase or decrease the LPT by 15%.
Ahead of the meeting councillors were issued with a report by Cork City Council chief executive Ann Doherty, in which she recommended a 15% increase on LPT.
“This would ensure that the levels of service in the 2021 budget would be maintained for 2022 and that there would be significant funding for Local Area Committees,” the report stated.
The report also stated that the preparation of the 2022 budget for consideration and adoption by council is proving to be “extremely challenging in the current Covid-19 climate which is posing unprecedented financial, environmental, and social challenges for the City Council”.
Cork City Council invited written submissions from the public on the matter specifically covering the potential effects of varying the basic rate of the LPT on businesses, individuals, and on local authority services.
Speaking at the meeting yesterday evening the chief executive said there were a record number of submissions of any public consultation on LPT.
“A total of 32 submissions were received of which 26 were in favour of an increase in the local adjustment factor,” she said.
Councillors first voted on whether or not the rate should be adjusted and following a majority vote to adjust a number of proposals were put forward.
Fianna Fáil councillor Seán Martin proposed that the rate would be adjusted by 9%.
He said this would ring-fence an additional €60,000 for each of the Local Area Committees in 2022 and would ensure funding for sports grants would remain on par.
Green Party councillor Oliver Moran proposed that the rate would be adjusted by 15%.
He said that funding provided to Local Area Committees this year has facilitated a wide range of projects and that people were able to "tangibly feel the benefit of their taxation in the local ward".
The Sinn Féin group were amongst those who voted against adjusting the rate.
Meanwhile, Solidarity councillor Fiona Ryan proposed a decrease in the rate of 15%, calling the tax an “unjust tax on family homes”.
Following a recent decision by central Government to bring forward legislation that proposes changes to how the local property tax will operate, councillors had to vote on the LAF earlier than normal this year.
Meanwhile, LPT in Cork County is to remain at a variation of 7.5% for a second year, following a vote by Council on Monday.
While the LPT variation, which comes into effect on November 1, remains the same as last year, the assessment bands, which dictate the amount owed by each homeowner based on their house value are set to change significantly.
The Heads of the Finance (Local Property Tax) (Amendment) Bill 2021 will result in a decrease or no change to the amount of LPT a homeowner will pay once introduced, with most homeowners in Cork County paying the same or less than they paid last year with the 7.5% variation.
For the majority of homeowners, the LPT would be an annual cost of €225. This is the LPT rate for a home valued between €200,000 and €262,500 with the average house price in Cork estimated to be €235,973.
Head of Finance Lorraine Lynch presented the options to the chamber, but said, due to the timing of the decision, there was "limited information on several critical parameters that will inform the preparation of a realistic budget for 2022."
County Mayor Gillian Coughlan proposed the LPT remained at 7.5% for another year, bringing in no additional revenue to the council compared to last year, but causing no loss.
The proposal was seconded by Independent Councillor Declan Hurley who said it was a “wise option” and said in "difficult times," it was the “fairest proposal.”
80% of the LPT is retained locally with 20% sent to the equalisation fund to be allocated to counties with less income.
With an LPT variation of 7.5%, over €14m is now available to the Council for discretionary purposes.
While the County Mayor’s proposal was carried by 47 votes for, with one vote against and one abstention, the LPT discussion ruffled some feathers with Fine Gael Councillor Gerard Murphy making his thoughts clearly known in chamber.
Mr Murphy said Fianna Fáil, as the majority party has a responsibility to see community and voluntary groups in the Cork County funded going forward and said the "general public would suffer" from this proposal of 7.5%
“It’s important the public realise the incompetence of the majority part,” Mr Murphy said.
In response, Fianna Fáil Councillor Seamus McGrath highlighted that Fine Gael had not put forward a proposal or amendment to raise the LPT to 10% or 15% and told Mr Murphy to “stop lecturing.”