Addressing vacancy and dereliction, and maximising the use of the existing housing stock, is a priority objective of the Government. Housing for All outlines a suite of measures aimed at addressing vacancy in a coordinated, robust manner, and specifically includes an action for the Department of Finance to collect data on vacancy with a view to introducing a vacant property tax.
Provisions included in the Finance (Local Property Tax) (Amendment) Act 2021 enabled Revenue to collect certain information on vacant properties in the Local Property Tax return forms submitted by residential property owners in respect of the new LPT valuation period 2022-2025. This information included whether the properties were unoccupied at 1 November 2021, the reason why and whether they (the properties) had been vacant for 12 months or more. Vacancy data on LPT returns has not been verified by Revenue and was collected for informational purposes only. A preliminary analysis of this data was published by Revenue on 6 July 2022, and is available at:
www.revenue.ie/en/corporate/information-about-revenue/statistics/local-property-tax/lpt-stats-2022/index.aspx.
LPT applies in respect of any building which is in use as, or is suitable for use as a dwelling, in accordance with section 2A of the Finance (Local Property Tax) Act 2012 (as amended). Therefore, if a vacant property falls within this definition on the liability date (1 November) of any given year, the property owner or ‘liable person’ is liable for LPT for the following year. It should be noted that LPT applies only to habitable residential properties, and is not applied in respect of derelict or properties no longer in use, or suitable for use, as a dwelling.
The preliminary analysis published by Revenue includes a breakdown of the various reasons provided for vacancy. It indicates that the most frequent reasons for properties reported as vacant, were “Undergoing Refurbishment” (22.2%), “Other” (21.7%) and “Holiday Home” (20.4%). Other reasons for vacancy were reported as a property being for sale or between lettings, subject to a probate application or other legal proceedings, or where the owner is in long-term care. The analysis also indicated that levels of vacancy among LPT liable properties are low across all counties and lie within a range that is considered to be in line with a normal functioning housing market.
As I have said on many occasions, I consider that the primary objective of a vacant residential property tax would be to increase the supply of homes for rent or purchase to meet demand rather than increasing tax revenues. The Revenue analysis provides a basis for my Department to assess the merits and impact of introducing a Vacant Property Tax, and how best such a tax might be designed. This work has already commenced and I intend to bring forward proposals on a targeted measure that achieves an appropriate balance between incentivising owners of vacant habitable residential properties to bring their properties back into use, and ensuring any such tax does not arbitrarily or excessively penalise home-owners in a discriminatory way.
