Dáil Éireann Debate, Thursday - 16 June 2022
11. Deputy Steven Matthews asked the Minister for Finance his views on the introduction of a derelict property tax; if he will replace the derelict site levy that would be implemented by the Revenue Commissioners; if any research has been carried out by his Department into this proposal; and if he will make a statement on the matter. [31302/22]
Amharc ar fhreagraI wish to hear the Minister of State's views on the introduction of a derelict property tax. Will the Government consider replacing the current derelict sites levy with a derelict property tax to be collected by Revenue? Has the Department done any research on this matter?
I thank the Deputy and appreciate his raising this matter.
Addressing vacancy and dereliction, and maximising the use of the existing housing stock, is a priority objective of the Government, as evidenced in the Housing for All strategy. One of the four pathways in the plan is specifically dedicated to this area.
The Minister for Finance has been advised by his colleague, the Minister for Housing, Local Government and Heritage, that the existing Derelict Sites Act imposes a general duty on every owner and occupier of land to take all reasonable steps to ensure that the land does not become, or continue to be, a derelict site. The Act also imposes a duty on local authorities to take all reasonable steps, including the exercise of appropriate statutory powers, to ensure that any land within their functional area does not become, or continue to be, a derelict site. These powers include the power to prosecute owners who do not comply with notices served, making compulsory land purchases and carrying out necessary work at charge to the owners for the cost.
The Minister has also been advised that the Department of Housing, Local Government and Heritage continues to liaise with local authorities on the implementation of the Act with a view to improving its effectiveness. In this regard, a review of the Act was initiated in November 2021 and initial submissions have been sought from local authorities on potential improvements to the legislative provisions and the way they are applied. We understand the Department of Housing, Local Government and Heritage is now in the process of establishing a focused working group to progress speedily this matter further.
It would be premature to speculate on possible legislative changes and improvements in the levy collection mechanisms, including replacing the current levy with a tax to be implemented by the Revenue Commissioners in advance of the completion of this review. It remains a work in progress. The process is open-ended but we want to see the report as quickly as possible so we can decide where to go next.
I thank the Minister of State. I am glad he referenced the Derelict Sites Act because it needs to be addressed. I have introduced a Private Members' Bill to address the issues involved and I hope it will be considered by the Department of Housing, Local Government and Heritage.
It is the taxation aspect of it that I am interested in, which is the responsibility of the Department of Finance. I am delighted to see work is in progress but this work needs to be expedited.
We have a housing crisis and there is no doubt about it. That has been well documented and much commented on lately. I see tackling dereliction and vacancy as an opportunity to bring life and living back into town centres, as well as addressing people's housing and accommodation needs. We have a derelict sites levy in place. In 2021, over €5 million worth of levies were issued but only €378,000 was collected by the local authorities. This levy is not functioning properly at local authority level, with less than 10% of what is owed being collected. That is why I suggest we introduce a tax rather than a levy, to be collected by the Revenue Commissioners. People pay attention to Revenue; they may not pay attention to the local authorities.
Everyone would agree with the Deputy's last point. When you get a letter from Revenue, you have to take it seriously. The Revenue Commissioners will get you eventually. Even if you are dead, Revenue will get what you owe from your estate. That is one of the sure things in life.
I understand that the operation of the legislation - the complications and implications involved - was very difficult and unwieldy. Issues arose relating to boundaries, registration, property ownership and so on. My local authority has issued a number of compulsory purchase orders, CPOs, on derelict sites and there is no reason for local authorities not to do so. It just takes a push from senior management to make it happen. Local authorities can all find reasons not to do it but there are glaring examples of the benefit of just getting on with it and serving the notice. Notices can be nailed to the door if it is not known who owns the property. That is part of the process and it is happening.
On the question of the involvement of the Revenue Commissioners, the Department of Finance cannot comment until it receives the report on possible taxation legislation. We have to hold back on that. On vacant properties more generally, the Revenue Commissioners is very active. I know from my constituency office that it is reviewing cases of people who are exempt from the local property tax, LPT, because they had an uninhabitable house. Revenue is of the view that if such properties can be made habitable, they should be brought back into use. There are different definitions between the Revenue and the local authorities but Revenue is doing very thorough work in this area, which is positive.
The CPO process is one that local authorities can use as a last resort when there is no movement but the introduction of a tax would serve as a land and building activation measure. Sometimes property owners just need a nudge in the right direction and introducing a tax would serve as a nudge. I am aware that the reasons for vacancy and dereliction are many and nuanced. The Joint Committee on Housing, Local Government and Heritage produced a report on this issue, to which this morning's Acting Chair, Deputy Higgins, contributed. There was cross-party agreement that we need taxation measures in the form of a dereliction tax and a vacant homes tax. I understand there has been some progress on a vacant homes tax. I will liaise further with the Minister of State on this as we approach the budget because I really believe taxation measures are what is required. Often when buildings sit vacant they have a negative effect on entire street scapes. If we can bring them back into use, that could have a really beneficial effect on towns and villages and local economies, both in terms of their general look and in meeting local housing needs.
I concur with everything the Deputy said. We all agree that we should be able to move on this more quickly. I acknowledge the work of the Joint Committee on Housing, Local Government and Heritage which put a lot of time into its report on this issue. I am not personally aware of any Private Members' Bill but that can be discussed in Government circles and with relevant Ministers.
I hope the aforementioned report is published as soon as possible. The Department of Finance has to stand back until it sees the report. In that context, I do not have any answer for Deputy Matthews this morning on taxation measures and will not have an answer until we get an assessment of the problem.
