An Oireachtas committee has heard that property tax has yielded €3.6 billion since 2013.
The Joint Committee on Housing, Local Government and Heritage is examining proposed changes to the Local Property Tax, published last month.
Anne Marie Walshe, of the Tax Division at the Department of Finance, said 100% of the tax will stay with the local authority which collects it from 2023, as data on the reforms will then be available.
Next year, local authorities will continue to get 80% of the funds raised.
The "uneven pace and rate of increase" of property prices across the country has made reviews of the tax difficult. "We have been working off average property price increases in the region of 75%", she said.
The department expects the tax to generate approximately €560m for 2022, she added.
Councillors are "terrified" that "existing grants" will be replaced, Fianna Fáil's Paul McAuliffe said. "It looks impossible to do in an exchequer neutral manner," he added.
Ms Walshe said that was a matter for the departments of Housing and Public Expenditure.
Committee chair Steven Matthews, Green Party, said the committee had invited officials from the Department of Housing.
As they were not available at short notice, they would attend the committee's next sitting.
Keith Walsh, Head of Statistics and Economic Research at Revenue, said that Revenue will be issuing guidelines on determining a property's actual value, and will not be advising that people rely on recent, elevated market values, which are taking place in a context where supply is constrained.
He said that Revenue does not know the value of every home in the country, and that the homeowner can best establish its worth.
Revenue is hoping to provide average values in each property's small area, "which is closer to a neighbourhood" than the larger areas used in previous advice, he said.
There is no penalty if someone gives a different value to the one Revenue suggests, Mr Walsh said, noting that the majority of people - 60% - submit a different value.
"We have a very strong presumption of honesty on the part of the tax-payer," he said.
Ms Walshe noted that a site value tax is being examined by the recently established Commission on Taxation and Welfare.
