Dáil Éireann Debate, Thursday - 5 October 2023
81. Deputy Róisín Shortall asked the Minister for Finance the number of vacant properties upon which the vacant homes tax will be levied; the source of this calculation; his plans, if any, to expand the cohort of liable properties; the expected revenue from this new tax; the steps the Revenue Commissioners will take in the event of a non-payment; and if he will make a statement on the matter. [43388/23]
View answerAnybody with their eyes open knows there is a considerable number of vacant homes around the country. It makes no sense whatsoever to leave these homes vacant in the context of a housing crisis. Nor does it makes any sense from a climate perspective. We know that most other countries have long had regulations in place to address this waste. The Government has been very slow to address it, and has unfortunately taken a conservative approach. Will the Minister update us about where we are at with regard to that tax?
The vacant homes tax is a new measure announced in last year's budget, which aims to increase the supply of homes for rent or purchase to meet demand. The first chargeable period commenced on 1 November 2022. The first self-assessed returns are due on 7 November this year and the tax will be payable from 1 January 2024. The number of properties in scope and tax payable will depend on the self-assessed returns submitted by property owners, the number of properties declared as liable and the number of property owners entitled to claim exemption from the tax. I am advised by Revenue that it has undertaken significant work to identify an initial subset of residential properties which may come within scope of the vacant homes tax.
A preliminary property register is being used to issue correspondence to approximately 25,000 property owners who are identified as being potentially liable for the tax. Revenue published a detailed note explaining how it developed this register on its website on 27 September.
Property owners who receive such correspondence from Revenue are required to confirm their property’s occupation status with Revenue by 7 November, thereby determining their liability to the tax. Property owners are required to self-assess their liability and submit a return if they determine that the tax applies to their property, even if they do not receive correspondence from Revenue. As always, the obligation remains on the taxpayer. Revenue may contact further property owners at a later date following further data analysis.
As with all tax and duty obligations, Revenue’s approach is to seek to maximise voluntary compliance. Revenue has provided detailed information about the tax on its website and has published a tax and duty manual on the tax. In addition, Revenue provides comprehensive online services, as well as a designated telephone helpline, to assist property owners in meeting their obligations.
Where property owners fail to meet their vacant homes tax obligations, Part 22B of the Taxes Consolidation Act 1997 contains a number of provisions designed to address non-compliance. Revenue may issue a notice to a chargeable person, requiring them to provide records to demonstrate that their property was in use as a dwelling for 30 days or more in a chargeable period. Where such records are not provided, or where the records provided are insufficient, Revenue may deem the property to be vacant for the purposes of the tax.
Furthermore, a surcharge of 5% of the tax payable can be imposed where a return is filed late within two months of the filing deadline. The surcharge increases to 10% where the return is filed more than two months after the deadline. Revenue may also apply a penalty where the chargeable person fails to file a correct return by the due date. In addition to this, interest will be charged on late payment of the tax, at a rate of 0.0219% per day.
A very conservative approach is being taken to this. Revenue has constantly denied the existence of an issue. All of us as public representatives from our experience in canvassing or delivering leaflets see it, especially at election time when calling to a clearly vacant house and there is nobody on the register. It is a significant problem, yet there seems to be no great appetite to address it. Why is that? From a political perspective, there has not been much enthusiasm. Maybe it is because the aim of this is to bring houses back into use and Revenue is not likely to raise much revenue from it. It is a key issue in addressing the housing crisis.
I want the Minister to answer some of the questions contained here. What is the source of Revenue data in regard to this? Given the huge variation, where the CSO is taking about more than double the number of properties Revenue is talking about, how can the Minister ensure better data is used and there is a greater awareness among people of their responsibilities?
I have in recent weeks asked my officials to engage with Revenue. I wanted to be satisfied about the preparatory work and engagement Revenue is having with people it believes are within scope of the tax. It is important to point out there is a range of exemptions, for example, for homes that underwent structural works, homes being actively marketed, where the owner has passed away, where it is unoccupied due to illness or where it is a derelict or uninhabitable property. There are a range of exemptions and exclusions from the tax and I have sought to understand the reconciliation between the number of homes declared vacant in the census at approximately 166,000 with the estimates Revenue and the Department have provided of the number of homes within scope. The census data include 33,000 rental properties, about 17,500 that are classified for sale, about 23,000 vacant due to renovations and about 27,000 that are vacant as the former residents are deceased. They are embedded within the numbers declared vacant in the census. There are reconciling items but the bottom line is the tax is law. The Revenue Commissioners will do their job, as they always do, to enforce and collect the tax. Issues around the rate and scope of the tax fall to be considered as part of the budgetary process. I have been examining the details of the vacant homes tax in recent weeks but that is in the absence of data about the first round of returns because they only come in next month.
Absolutely, but I do not like the way it is shaping up because it does not come across like there is a serious effort by Revenue or Government to force this issue and bring the houses back into use. That is the purpose of it. The manual concentrates overly on exemptions. How does Revenue verify applications for exemptions? Will the Minister provide information on that? It is not clear that a serious attempt is being made on this.
The other issue is the fact it is a self-assessment tax. As it is a new self-assessment tax, is there not a strong case for having a good public awareness campaign on this? How are people to know? The Minister referred to information on Revenue's website but that is not adequate. If he is serious about going after vacant homes and bringing them back into use for the thousands of people who cannot access homes now, it is up to him to commence a high-profile, well-resourced public awareness programme. Will he do that?
In June this year, Revenue launched a series of information sessions and webinars with key relevant stakeholders, including Citizens Information, the Approved Housing Bodies Regulatory Authority, the Irish Council for Social Housing, the Irish property valuers association and all local authorities. Revenue has undertaken significant work to understand the number of properties that have indications they are likely to be vacant. Revenue can access data from other Government agencies to assist in identifying any property in use for less than 30 days in a chargeable period. Revenue has been analysing a range of data sets to build a preliminary register of properties potentially in use for 30 days or less in a chargeable period, in particular ESB Networks data to extract cases with low energy usage. It has refined the data to arrive at an initial data set of approximately 25,000 properties that may be in scope of the vacant homes tax. It has also analysed the local property tax returns for a number years in respect of each property. It has extensive data.
That is less than a sixth of what the census is telling us. You are not serious about this unless you do a public campaign on it. You are kind of talking to yourselves.
I outlined earlier some of the numbers within that 166,000 that are not within scope of the vacant homes tax and the reasons. It is a policy decision for any Government whether, where someone has just deceased or where a property is up for sale or on a short-term let but on census night was vacant, that should be in scope. These are all policy decisions.
It does not sound serious.
