Planning Permission and Ireland’s 2025 Property Tax Shake-Up
Homeowners face new Local Property Tax rules as Ireland’s housing market surges.
The Irish government has announced sweeping changes to the Local Property Tax (LPT) system, with a mandatory revaluation set for 1 November 2025. The new valuation period will run from 2026 to 2030, and property owners must submit updated LPT returns by 7 November 2025. The market value of each property on 1 November 2025 will determine its LPT charge for the next five years, directly impacting planning permission decisions and housing scheme approval processes.
Valuation bands have been widened by 20 per cent, meaning most homeowners—around 96 per cent—will remain in their current band. The new base LPT rate is set at 0.0906 per cent, with basic charges increasing by 5–6 per cent for properties valued under €1.26 million. Those above this threshold, or properties that have appreciated significantly since 2021, will see proportionate increases. Properties valued at €2.1 million or higher will be taxed on their actual value, not a band.
For the majority of property owners, those with homes valued at €525,000 or less, the annual increase will be between €5 and €25. However, properties that move up a band or exceed the €525,000 mark may face higher charges, with each band jump adding approximately €90 to the annual bill. Local authorities now have the power to vary LPT rates upwards by up to 25 per cent, while the maximum downward variation remains at 15 per cent. This flexibility could influence future flood-risk development and environmental impact assessments.
Despite official claims that most homeowners will see only modest increases, critics argue that the five-year gap since the last mandatory valuation—during which average house prices rose nearly 10 per cent annually—means many properties could move up multiple bands. The Department of Finance and local authorities maintain that 96 per cent will stay in their current band, but with 75 per cent of homeowners yet to revalue, the true impact remains uncertain. The changes also remove an administrative reduction for properties adapted for people with disabilities, affecting some vulnerable homeowners.
These reforms are expected to generate significant revenue for local authorities, with projections of €767 million in 2026, a 10 per cent increase from 2025. The new system aims to ensure fairness and keep pace with inflation and wage growth, but concerns remain about the impact on middle-income families and the broader housing crisis. As property values rise, the link between planning permission, material contravention, and tax liability becomes increasingly complex.
- Revaluation date: 1 November 2025
- New valuation period: 2026–2030
- Valuation bands widened by 20%
- New base rate: 0.0906%
- Most properties remain in current band
- Local authorities can vary rates up to 25% up, 15% down
- Properties over €2.1 million taxed on actual value
- Updated LPT returns due by 7 November 2025
These changes mark a significant shift in how Ireland’s property tax system operates, with direct implications for homeowners, local authorities, and the planning permission landscape. As the deadline approaches, property owners must act to ensure compliance and avoid penalties.
For those navigating the complexities of property tax and planning permission, understanding these reforms is crucial. The new rules could affect everything from housing scheme approval to environmental impact assessments, making it essential to stay informed and seek professional advice where necessary.
With the housing market under pressure and the cost of living rising, the government’s approach to property taxation will continue to be a hot topic. The changes aim to balance fairness and revenue, but their real-world impact will depend on how property values and local authority decisions evolve over the next five years.
Originally reported in on Sun, 02 Nov 2025 15:15:01 +0000. Full story
