Anne Rabbitte (Galway East, Fianna Fail) | Oireachtas source

I move amendment No. 1:

To delete all words after "That Dáil Éireann" and substitute the following: "notes that:

— addressing vacancy issues and making the best use of existing housing stock is essential in light of the current housing crisis; and

— the Government has developed a multifaceted approach to addressing the issue, and the Vacant Homes Tax (VHT) is one part of a wider suite of measures set out in Housing for All: A New Housing Plan for Ireland;

recalls that:

— the Minister for Housing, Local Government and Heritage published the Vacant Homes Action Plan 2023-2026 earlier this year, which outlines progress, and details new actions that will be implemented to continue to return as many vacant properties back to use as soon as possible, increasing the supply of housing available, and revitalising local communities;

— measures already taken by the Government include expanding the Vacant Property Refurbishment Grant; funding full-time vacant homes officers in every local authority, exemptions to planning permissions to convert vacant commercial premises to residential use, and enhancing the Nursing Homes Support/Fair Deal Scheme to incentivise the selling or renting of unused homes;

— the action plan includes a €150 million Urban Regeneration and Development Fund for local authorities to acquire vacant or derelict properties and sites for re-use or sale and a new local authority-led programme is being developed to help them buy or compulsory purchase vacant homes in their areas and resell them on the open market; and

— the Government is building on the initial success of the Croí Cónaithe (Towns) Fund vacant property refurbishment scheme and will change the eligibility date for properties to include properties built prior to 2007, and to include properties which are made available for rent and not just owner occupied, with effect from 1st May, 2023;

further notes that:

— reported levels of vacancy captured in Local Property Tax returns are low across all counties and lie within the range that is considered to be in line with a functioning housing market;

— increasing housing supply, is key to improving our housing system and eradicating homelessness, with almost 30,000 homes built last year, an increase of 45 per cent from 2021 (20,560) and 41 per cent from 2019 (21,134), and 5,250 or 21 per cent higher than the Housing for All: A New Housing Plan for Ireland target of 24,600 for 2022;

— a record €4.5 billion in State housing investment in 2023 will ensure the substantial uplift in supply in 2022 can be maintained and exceeded, with 9,100 direct build social homes and 5,500 affordable homes to be delivered; and

— a total of 9,169 social homes were delivered in 2021, and furthermore, in 2020 and 2021, more than €88 million was spent in bringing 6,032 vacant social homes back into use;

recognises that:

— this is a new measure with the first returns for VHT due in November 2023 and payment of the tax due on 1st January, 2024;

— the rate of three times a property's base Local Property Tax (LPT) charge, payable in addition to the annual LPT charge, is considered an appropriate level which represents a considerable financial penalty to those who leave properties vacant, and will incentivise property owners to bring such properties back into use;

— the penalty and enforcement regime for VHT is fully aligned with Revenue's tax compliance framework for all taxes and duties that are under its care and management; and

— the legislation underpinning the tax provides for a register of vacant homes to be established and maintained by the Revenue Commissioners; and the collection of data with regard to vacant homes and the maintenance of the register will allow changes in the number of vacant properties to be monitored over time; and

acknowledges therefore that the Department of Finance and the Revenue Commissioners will monitor the VHT as it comes into operation and the Minister for Finance will have no hesitation in reviewing the measure including the rate and how it operates in future budgets."

I thank everyone who has contributed to the debate.I want to address a number of points that have been raised by individual Deputies. In developing a new tax, an important consideration is simplicity. It is important to ensure that the tax is easy to understand and to administer. This is why the rate of the vacant homes tax is based on the local property tax charge, as the local property tax system is well understood. The purpose of the vacant homes taxes is to encourage behavioural change. Accordingly, the rate should be set at a level that will influence the property owner's decision-making. I believe that the tax charged at three times a properties local property tax charge represents a considerable financial penalty to those who would leave properties vacant, and it will incentivise property owners to bring such properties back into use.

This means, for instance, that the owner of a property valued at €400,000 would face an annual vacant homes tax charge of €1,215, in addition to the local property tax charge of €405, while the owner of a property valued at €500,000 would face an annual vacant homes tax charge of €1,485, in addition to the local property tax charge of €495. While a higher rate would mean a greater yield, the policy intent of a vacant homes tax is not to raise revenue. In setting the appropriate rate for tax, I believe that care must be taken to get the balance right between achieving the objective of encouraging the use of available housing without excessively penalising a limited group of property owners.

While I acknowledge the Deputies' good intentions and desire to address the housing crisis, the Minister for Finance, Deputy Michael McGrath, has no plans to change the rate of vacant homes tax at this time. He reiterates his belief that the best course of action is to allow the tax to bed in in its present format. As this tax is a new measure, it is important to see how the tax operates after coming into effect before any substantive changes are made. As the Minister said earlier, his Department and the Revenue Commissioners will monitor and review the tax's effectiveness in bringing more properties into use and if changes are merited in due course, they will be pursued in a future budget.

Addressing vacancy and dereliction and maximising the use of existing housing stock are priority objectives of this Government. The vacant homes tax is only one part of a much wider suite of measures. Housing for All outlines a suite of measures under pathway 4 to address vacancy and effective use of existing stock that includes the town centre first policy. Vacant homes offices have been established in local authorities and full-time vacant home officers are now in place across 30 local authorities. Their role is to identify vacant properties, proactively and systematically engage with the owners and actively promote and lead the uptake of initiatives, schemes and funding programmes that will bring these properties back into use. A new compulsory purchase order, CPO, activation programme has been launched, with targets identified for each local authority to bring properties back into use.

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