Dáil Éireann Debate, Thursday - 16 December 2021
258. Deputy Cian O'Callaghan asked the Minister for Finance the number of reports on residential vacancy that have been commissioned in the past three years; the titles of these reports; the level of vacancy that was reported by area, in tabular form; the recommendations that were made in these reports; and if he will make a statement on the matter. [62719/21]
View answerIn 2018 I commissioned Indecon consultants to examine the potential of a vacant residential property tax to meet the objective of increasing the supply of homes. The resulting report presented a detailed evidence-based assessment of vacancy rates in areas in which the demand for housing is most acute.
The Indecon report is entitled “Report on the Taxation of Vacant Residential Property” and is available on the Government website gov.ie.
The report did not recommend the introduction of a residential vacant property tax as it considered it would not be an effective response to deal with the housing challenges. The very low vacancy rates in the areas of greatest demand for housing, particularly in terms of medium term vacancy, indicated that the potential for a vacant property tax to increase housing supply was very limited and could represent a distraction from the need to significantly accelerate the building of new social housing, affordable housing and the facilitation of private sector supply.
In summary, the recommendations in the report are as follows
1. Indecon did not recommend the introduction of a residential vacant property tax as they did not believe it would be an effective response to deal with the housing shortages. However, Indecon recommended this should be kept under review.
2. In the event that a vacant property tax is introduced at some stage in the future, careful consideration is required to design the appropriate criteria for the implementation of such a tax.
3. Properties which become vacant owing to the long-term illness of the owner and which subsequently are rented out should be exempt from Local Property Tax
4. Enhanced evidence should be collected to monitor movements in the level of vacancies of residential properties.
5. A major programme of compulsory purchase orders should be urgently activated on suitable residential vacant properties.
6. Consideration should be given to introducing a time limited differential rate of capital gains tax for long term vacant residential properties.
It is the stated intention of the Government to introduce a Vacant Property tax next year. The Government’s strategy ‘Housing For All’ includes an action for my Department to collect data on vacancy with a view to introducing a Vacant Property Tax. The timeframe for delivery on this commitment is the second quarter of 2022. The Finance (Local Property Tax) (Amendment) Act 2021 has accordingly enabled Revenue to collect certain information on vacant properties in the Local Property Tax (LPT) return forms submitted by residential property owners last month in respect of the new LPT valuation period 2022-2025. This information, together with information from other available sources, will be used to inform the optimum design of a Vacant Property Tax.
