Róisín Shortall (Dublin North West, Social Democrats)
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52. To ask the Minister for Finance if he will examine the possibility of giving the Revenue Commissioners responsibility for collection of the vacant site levy given compliance with this levy is exceptionally low (details supplied); and if he will make a statement on the matter. [32046/21]

Róisín Shortall (Dublin North West, Social Democrats)
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I apologise for being late in arriving. We know there is a problem with land hoarding which contributes to the high cost of housing and the lack of adequate supply. The vacant site levy was designed to address this problem but we would all accept that it is simply not working. I am asking the Minister if he will consider redesigning the scheme to give Revenue responsibility for collecting the levy.

Paschal Donohoe (Dublin Central, Fine Gael)
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Under the vacant site levy provisions of the Urban Regeneration and Housing Act 2015, planning authorities were empowered to apply a vacant site levy of 3% of the market valuation of relevant properties listed on local authority vacant site registers in 2018, which relevant owners were liable to pay in January 2019. The rate of the levy increased to 7% for sites listed on local authority vacant site registers from 2019 onwards, which site owners became liable to pay in January 2020.

I am informed by the Department of Housing, Local Government and Heritage that it proactively engages with local authorities with a view to ensuring that the vacant site levy achieves its full potential in terms of bringing concerned sites into productive use. In this regard, on 8 March 2021, the Department of Housing, Local Government and Heritage requested the submission of a progress report on the collection of the levy by each local authority. Responses have been received from each of the 31 local authorities. The Department is assessing the responses received and intends to proactively engage with individual local authorities and identify any issues to be addressed.

Each local authority has responsibility for the administration of the vacant site levy and register in its respective catchment area. A change in Government policy would be required to reassign the responsibility for collection of the levy to another body. The Deputy refers to the effectiveness of Revenue in collecting the local property tax, LPT, but it should be noted that the LPT is a self-assessed tax for which compliance is very high. Collection of the vacant site levy involves a physical inspection regime which would not align well with how Revenue conducts operations in that area. Careful consideration will be given by me to the role of local authority functions and to the capacity of the Revenue to take on further responsibilities.

Róisín Shortall (Dublin North West, Social Democrats)
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I note the Minister did not express confidence in the scheme as it is operating at the moment. Thanks to work being done by the Business Post, it has been reported that last year €21.5 million was owed on vacant sites. In that same year, €21,000 was collected. By any standards, the system is not working.

The local authorities simply do not have the resources or personnel to do the follow-up work. The figures speak for themselves.

A solicitor and tax specialist who is experienced in this area has been in touch with the Minister's Department on several occasions with a proposal for how a new system might operate. That system would be based on self-assessment but would include penalties unless people registered their properties. Such people would have to produce a certificate at the point of sale of the property. I ask the Minister to consider such a system.

Paschal Donohoe (Dublin Central, Fine Gael)
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If I look at the performance of the vacant site levy, 89 sites were valued at €132 million in 2018. They were liable at the 3% rate in 2019 in respect of their valuation for 2018. For 2019, those 89 sites grew to 181 sites and, in 2020, grew further to 215 sites. Demand letters were issued for 79 of those 215 sites and, as the Deputy has said, €21,000 in payments was received in respect of 2020.

It should be said this was never about revenue generation but was about the use of the land to see if a catalyst could be put in place for that land to be used more productively and efficiently. I am going to give consideration to the future of this tax, its role and whether there is a case for it to be strengthened.

Róisín Shortall (Dublin North West, Social Democrats)
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I am happy to send the Minister details of the proposal. It proposes to put the onus on landowners to get themselves put on the register, for them to self-assess and to face a charge on their land when they sell it if they do not self-assess. Minimal change to legislation, whereby the levy is turned into a charge on the land, would be needed to achieve that. Such a system has a lot to recommend it because the present system is simply not working. The purpose of the system is obviously not to generate revenue but it is to make hoarded land available for house building. That is not happening at the moment. If I send him further details of this proposal to put the onus on landowners to register their land, I would ask the Minister to look at them and learn from the success of other schemes in which Revenue has been involved, the non-principal private residence, NPPR, scheme, for example. I am looking for a commitment that the Minister will consider that as a way of achieving what the levy is intended to achieve.

Paschal Donohoe (Dublin Central, Fine Gael)
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I believe I have seen the piece of correspondence to which the Deputy has referred but just in case I have not, I would be happy to consider it if she could share it with me this evening by handing it to me during a division or later on. I am aware of a few models in respect of this issue. The Deputy correctly made the point that this is not about how we would generate revenue, it is about how we change the use of land. I am aware of different models for how that is done in different countries and just in case I have missed the correspondence to which the Deputy has referred, I would be happy to look at it directly.