Michael McGrath (Cork South Central, Fianna Fail) | Oireachtas source

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.

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