Making local property tax deductible against rental income

QUESTION

To ask the Minister for Finance the first and full year cost of allowing the local property tax as a deductible expense against rental income.

REPLY

I am advised by Revenue that the estimated cost of allowing Local Property Tax (LPT) as an allowable expense against rental income for tax purposes is in the region of €12 million in the first year and €20 million in a full year.  This estimate is calculated on the basis of Local Property Tax returns that indicated the property was a non-principal private residence, and assumes that each taxpayer would have sufficient rental income against which to offset the amount of LPT paid.

It should be noted that Revenue are unable to separate out rental properties, so properties indicated as non-principal private residences will include holiday homes and certain types of vacant properties which are not let out. 

Equally, there will also be properties rented out but not indicated as non-principal private residences, which could balance out the effect of some of the holiday homes.