Dáil Éireann Debate, Thursday - 16 December 2021
259. Deputy Cian O'Callaghan asked the Minister for Finance the steps that have been taken towards the introduction of a tax on vacant residential property; the estimated amount of revenue that would be raised by such a tax at each possible rate, in tabular form; the impact on property usage each rate would have; and if he will make a statement on the matter. [62721/21]
View answerThe 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 assess the merits and design of a Vacant Property Tax.
Before introducing such a tax it is important to have a sound understanding of the quantity, locations and characteristics of long term vacant properties. It is also essential to identify the reasons for vacancy, and whether this is long or short-term in nature. There may be genuine and acceptable reasons for vacancy such as refurbishment work, the temporary absence of the owner for medical reasons or pending the grant of probate for a deceased person’s estate. Appropriate exemptions from any charge will have to be considered in addition to acceptable periods of vacancy.
The LPT returns in respect of around 1.9 million dwellings are currently being analysed by Revenue and include information on the number and location of unoccupied properties, and the reasons for and duration of this, as of 1 November 2021. I look forward to receiving the results of Revenue’s analysis of this information early in 2022. This analysis will be used together with other available sources of information to inform the optimum design of a Vacant Property Tax. The objective of the tax will be to increase the supply of housing to help address the housing challenge. It will not be primarily a revenue raising measure. In advance of the analysis of LPT returns and design of the tax it is not possible to provide estimates of the revenues the tax may generate.
In designing the tax it will be important to achieve an appropriate balance between placing sufficient pressure on vacant home owners to allow the measure to actually work as an incentive, and ensuring any such tax does not arbitrarily or excessively penalise home-owners in a discriminatory way.
