Lynn Boylan (Sinn Fein) | Oireachtas source

I move recommendation No. 26:

In page 198, between lines 12 and 13, to insert the following:

“Report on the Vacant Homes Tax 97.The Minister shall, within six months of the passing of this Act, prepare and lay before Dáil Éireann a report on the vacant homes tax, including an assessment of options to include derelict properties within its scope, to apply a minimum amount of tax greater than three times the lowest rate of Local Property Tax and to increase the amount of vacant homes tax to be charged in respect of a residential property in proportion to the length of time during which that property remains vacant.” I think we are all in agreement that we need to address the issue of vacant properties, particularly given the disastrous housing situation in this country which Fine Gael has presided over for the last ten years. Vacant properties persist and the overall figure is very significant. The estimates range from a high of 166,752 vacant properties, if you go by the Central Statistics Office, CSO, figure - the census preliminary results - or a to low of 57,206 vacant properties per the local property tax November 2021 returns, or an intermediate figure of 90,158, according to a 2021 report from the GeoDirectory. Our recommendation calls for a report to be carried out into the vacant homes tax within six months of the passing of this Act, including an assessment of the options to include derelict properties within its scope; to apply a minimum amount of tax greater than three times the lowest rate of local property tax; and to increase the amount of vacant homes tax to be charged in respect of the length of time that the property is vacant. As we said, the exclusion of derelict properties is a problem and although its exclusion is due to the ongoing review of the derelict sites levy, it should be noted that in 2021 alone, 19 local authorities did not collect a single cent in derelict site levies. Some of these councils are owed well in excess of €100,000. Overall, local authorities collected on average 32% of the amount that was levied and there is still an outstanding debt of more than €12 million.

There are also several specific exemptions from the new vacant homes tax which may be claimed by the chargeable person where the applicable conditions are met and with specific regard to properties which are exempt for the period in which they are actively marketed for rent or for sale. There are real risks of abuse of these exemptions and the length of time that these properties may be marketed for rent or sale without charge to the tax.

We also have concerns around the rate that is being applied which is to be, I think, three times the local property tax, whereas other jurisdictions have applied a rate of at least 1% of the market value of the property. The vacant homes tax is to be charged at three times the local property tax which for the majority of properties, if you work out the calculations, is based on a rate of 0.1% resulting in a levy of 0.3% of the market value or €270 annually. As I said, other jurisdictions are looking at 1% of the property value and we are only looking at an average of 0.3%. Is this punitive enough to disincentivise people sitting on vacant properties?

As we said, consideration should also be given to increasing the charge periodically in line with the length of time that the property is vacant so that in the third or fourth year of a property being vacant, the rate or levy will go up with that. All this recommendation is asking is that there would be report looking at all of these issues so that we are actually having a vacant house levy that will do what we want it to do which is obviously to bring those vacant homes back into the housing stock.