Your guide to the local property tax

Over the coming weeks all homeowners will need to provide Revenue with an updated valuation for their home in respect of the local property tax.  

For the past four years, the tax has been based on the value of your home as of 1st November 2021. 

But now the amount of tax you pay will be based on the estimated value of your home (within a band) as of 1st November 2025.

And while the new bands have been adjusted largely to take account of property price growth over the past four years, in most cases homeowners will see their property tax bill increase by around €10 to €25 a year.

Before we look at the bands and what you'll be paying, here's a quick background to the tax...

Background to the local property tax

The local property tax (LPT) was first introduced in 2013 to help broaden the tax base and leave the Government less dependent on income tax in particular. 

Property tax is paid by homeowners in the vast majority of other European countries and even the US and it was hoped the tax could be used to fund local services better.    

Property tax is often considered a form of wealth tax and many economists think it is better and fairer to raise this tax as opposed to income tax as by doing the latter you can create a disincentive to work.

There used to be a few opt-outs from the tax, such as anyone who had bought a new-build home since 2013 and those who bought in "ghost" or unfinished housing estates. However these no longer apply and pretty much everyone who owns a home, bar a few exceptions (such as for properties constructed using defective concrete blocks) now has to pay the tax.

The more your home is worth, the more you’ll pay. 

Even if you own an exempt property, you must still make a local property tax return to claim an exemption.

How much is the local property tax? 

The amount you pay is based on the estimated value of your home (within a band) as of 1 November 2025. It is not based on the amount you originally paid for your home.

These valuations will last until 2030 — at which time the bands and charges will likely be reviewed again. 

The tax is self-assessed, meaning you tell Revenue how much you think your home is worth. 

If you have invested significantly in your property or extended it, this should be reflected in the valuation you provide.

So let's say your house is valued at €380,000 in November 2025, which is close to the median price of a home nationally, you're in band 3 and will pay €333 a year (or slightly more or less depending on whether your council has applied an "adjustment factor" as outlined below). 

If your home is worth €500,000, which is close to the median price of a home in Dublin, you're in band 4 and will pay €428 a year. 

And if you're lucky enough to live in a home worth €1.2 million for example, you're in band 11 so will pay €1,094 a year.

Very high-value properties 

If your home is valued at over €2.1 million, you must declare a specific value for your property on your LPT return. It's not calculated based on a valuation band. 

The LPT charge for these properties is calculated as the sum of:

• 0.0906% of the first €1.26 million of your declared market value of your home
• 0.25% of the portion of the value between €1.26 million and €2.1 million
• and
• 0.3% of the portion of the value above €2.1 million

Local authority rate discounts 

Your local authority can vote to increase or decrease the LPT rate by up to 15% from the base rate. This is referred to as the Local Adjustment Factor (LAF). So the rate you pay could be up to 15% more or less than the amounts shown above.

When the LPT was first introduced, many councils voted to reduce the tax by the maximum 15% allowed given how unpopular it was. However this has begun to change in recent years as hard-pressed local councils seek more funding. And now, only one council — Dun Laoghaire Rathdown — applies the maximum 15% reduction. And more and more councils now apply the maximum 15% increase.  

Here's a look at how some of the main councils nationwide have chosen to apply a LAF.  

How do I value my home?

Estimating the value of your home is not an exact science. And for most properties, Revenue is just looking for an honest estimate within a band— not an official, exact number. But you should be able to stand over your valuation. 

Your letter from Revenue will include an estimate of your tax liability. This may be more or less than what you think your home is worth. But even if you agree with Revenue's estimate, you still have to submit a valuation/tax return.    

The best way to estimate the value of your home is to check the property price register and note what similar homes in your estate or area have sold for over the past year or two. You can also check what similar homes in your location are selling for on popular property websites or in a local estate agent. 

However, if you have done extensive work to your home, this should be reflected in the value you provide.

You should also take into account the Building Energy Rating (BER) of your home. If your home has a BER or A or B in particular it will be worth more than a similar property in your area with a lower BER and vice versa.   

You could also pay to get a professional valuation. This will cost around €175. However in most cases this shouldn't be necessary. 

What if I under value my home?

Revenue has the right to challenge any valuation you provide. 

But the biggest problem with significantly under valuing your home is if you want to sell it. 

You need to get clearance from Revenue before your home can be sold (your solicitor will manage this). And your LPT payments must be up to date.

If Revenue sees that your home is being sold for a much higher amount than you valued it at, it will ask for proof as to why you submitted the value that you did.    

If you can't provide this, then you will have to backpay the tax due along with interest and penalties. Otherwise Revenue will block the sale of your home.

Will I be paying more?

Even though the new bands have been adjusted to take account of inflation and property price growth over the past four years, in most cases, homeowners will still be paying around €10 to €25 more a year in property tax.

For reference, below are the bands that applied from 2021 until 2025.

Back then, the median price of a home nationally was €276,000 according to the CSO. This would have placed you in band 3, meaning your charge would have been €315 a year up until now. But as outlined above, you'll now be paying €333 for a median priced home — and potentially more if your council has voted to apply a LAF increase.  

If you live in Dublin, the median price of a property in November 2021 was €405,000. This would have placed you in band 4, meaning your charge would have been €405 a year before any adjustments by local councils. But as outlined above, you'll now be paying €428 for a median priced home before any LAF changes are applied. 

How do I file a local property tax return?

The easiest way to do this is online.

People can access the LPT portal directly on Revenue.ie, or through MyAccount or the Revenue Online Service, which are both also available on Revenue's website.

How do I pay the local property tax?

You can pay the tax in many different ways. These include:

• Debit/credit card: This option is only available online. 
• Cash payments: you can pay in full by cash through an approved Payment Service Provider. A transaction charge usually applies. 
• Cheque: You can pay by cheque if you make your return using the paper form. Write your Property ID on the back of the cheque. 
• Direct Debit: You can complete a Direct Debit Mandate form and have the payment deducted from your bank account in 12 equal monthly instalments.
• Annual Debit Instruction (ADI): Under this payment method you can authorise your bank or financial institution to pay Revenue the LPT in one go. The amount is taken from your bank account in one deduction in March each year. Your ADI will carry forward each year unless you change your payment option online or contact Revenue.
• At source: You can have your payment deducted directly from your wage, occupational pension, or social welfare payment. The deductions are spread evenly across the number of payments you get during the year. 

How much does the property tax raise?

The tax currently raises around €600 million a year. 

Dublin City Council is where the most local property tax is collected at around €75 million a year.

It is followed by Dun Laoghaire-Rathdown on €44 million and Cork County Council on €39 million.

Where does the money go?

Well, that's a good question.

The tax was supposed to fund local services better. Think more bins, public toilets, more frequent street cleaning, nicer lighting, more public seating, better maintenance of roads and pavements and investment in things like local libraries and swimming pools.

Before the tax, central government gave local authorities a subvention each year, which along with business rates and car parking charges, largely funded local councils.

However funding from central government was hugely reduced once the property tax was introduced so councils were in many cases no better off.

So the result has been homeowners paying more but often seeing less in the way of local services. 

What if I pay management charges?

Management charges are used to pay for the upkeep of your apartment complex so have nothing to do with the property tax.

However in recent years some new build housing estates have been subject to them too in order to pay for services which in the past would have been done by local councils.

It's been argued therefore that those who pay management charges should receive some type of discount on their property tax but for now nothing has been agreed by the Government.

What if I can't pay the local property tax?

If you're single and earn less than €25,000 a year or a couple who earn less than €40,000 you can fully defer paying your property tax. 

These limits are for people who have fully repaid their mortgage and are now mortgage free. A slightly higher income threshold is allowed for deferral if you're still paying a mortgage. 

However in all cases you'll be charged 3% interest on the amount owed and must pay it all to Revenue eventually. A deferral does not mean an exemption.

If you die before you've repaid any tax due, it will be taken from your estate. 

Take a look at our other personal finance guides

If you found this guide helpful, make sure you check out some of our other helpful guides.

• Many people overpay on their tax each year by not applying for a tax refund. You can learn how to apply for a tax refund in this guide.
• And if you’re one of many people who work from home, take a look at this guide on e-worker tax relief.
• Finally, if you’re planning a trip abroad we’d recommend looking at this article ​​about how to avoid foreign exchange fees when travelling.

You can stay up to date on the latest personal finance news and top tips with our blogs and guides pages.