Seanad debates

Tuesday, 5 July 2022

Nithe i dtosach suíonna - Commencement Matters

Tax Code

12:00 pm

Photo of Mary FitzpatrickMary Fitzpatrick (Fianna Fail)
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I thank the Minister of State for attending the House to respond my Commencement matter calling for a vacant property tax. No more than anybody else I do not like taxes. We must accept, as everybody does, the housing emergency gripping our State. The Government has provided unprecedented funding and made changes to housing policy since taking office. A glaringly obvious waste of built properties is documented in the recent Central Statistic Office census. Anybody would objectively say it is morally wrong to see such vacancy when there is such enormous housing need.

We recognise that more than 10,000 people are homeless. More than 38,000 Ukrainians have arrived in our country since the start of the war and more than 6,000 people are living in direct provision. None of these numbers capture the tens of thousands of people who want to buy their own homes or are stuck in inadequate accommodation. I commend the Minister of State and the Government on the €20 billion commitment they have made under Housing for All to deliver 300,000 homes. I also commend the changes they have made to use State-owned land to deliver social and affordable homes and empower local authorities and housing charities to do this. The Government has committed to ending direct provision. It has banned co-living. It has returned power to local authorities so they can reserve new developments for home owner-occupiers. It has reinstated Part V to ensure a minimum of 10% social housing and a minimum of 10% affordable housing, with a total of 20% in every new private development.

All of this is very welcome, as is protection for renters through capping rents and increasing the notice periods, but we are treading water. It is like we are on a sinking ship bailing out the water as it is coming in when we look at all of the vacancy. The CSO numbers state more than 160,000 properties are vacant nationally. There are more than 30,000 of them in Dublin alone. Every vacant property has its own complex issues and mini-drama as to who owns it and the circumstances of ownership. Housing for All includes many financial supports under the lease and repair, buy and renew and living city schemes. There are also other supports to help property owners to restore them. We are doing this because the fastest and most sustainable way to increase our housing stock is to reuse the buildings already on roads with public lighting, sewerage and public transport and that are near schools. Not only would this increase housing stock and affordability, it would reinvigorate and regenerate communities.

I asked the Minister for Finance to come to the House because I have raised this issue in the House and at the Oireachtas Joint Committee on Housing, Local Government and Heritage. The committee produced a report that calls for a vacant property tax. The reason it specifically did so is taxes are in place. A debate goes on about dereliction and vacancy. Under either of the two charges, the State is failing miserably. Under the derelict sites tax, €300,000 was collected. It sounds like a lot of money. Guess how much should have been collected? It was €5 million in 2020 alone. There is another local authority tax for vacancy. In 2020, local authorities collected €21,000 out of a target of €21 million. That is less than 1%. The levies are not being collected. They are not effective. They are not tackling the vacancy. It is morally, economically, environmentally and socially wrong for vacancy to be allowed to persist at a time of such huge housing emergency.

Photo of Ossian SmythOssian Smyth (Dún Laoghaire, Green Party)
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I thank the Senator.

Addressing vacancy and dereliction, and maximising the use of the existing housing stock, is a priority objective of the Government. Housing For All outlines a suite of measures aimed at addressing vacancy in a co-ordinated and robust manner, and specifically includes an action for the Department of Finance to collect data on vacancy with a view to introducing a vacant property tax.

In considering the case for such a tax, it is important to have a sound understanding of the quantity, locations and characteristics of long-term vacant properties. It is also essential to identify the reasons for vacancy, and whether these are long or short-term in nature. There may be genuine and acceptable reasons for vacancy such as refurbishment work, the temporary absence of the owner for medical reasons or pending the grant of probate for a deceased person's estate.

The Finance (Local Property Tax) (Amendment) Act 2021 enabled Revenue to collect certain information on the occupancy status of residential properties in the local property tax, LPT, return forms submitted by residential property owners in respect of the new LPT valuation period, 2022-2025.

Regarding vacant properties, the LPT returns requested information such as whether a property is vacant, the reasons for the vacancy, and whether the period of vacancy is 12 months or more. The return data provide a snapshot of vacant properties in Ireland as at the valuation date of 1 November 2021.

Revenue has completed a preliminary analysis of the LPT returns received to date which has been shared with the Department of Finance. The results of the preliminary analysis suggest that levels of vacancy are low across all counties.

The Revenue analysis provides a basis for the Department of Finance to assess the merits and impact of introducing a vacant property tax, and how best such a tax might be designed. This work is under way.

I will comment briefly on the recent publication of preliminary census data. According to the preliminary figures released two weeks ago, 166,752 vacant dwellings were recorded giving a rate of 7.8%. This is a decrease compared to 2016. It is an even further decrease - a reduction of 12% - compared to 2011, when 230,056 vacant dwellings were recorded.

It is important to note that the CSO highlights that this is a point in time measure of vacancy relating to the weeks either side of census night. The figures are not intended to be a measure of long-term vacancy, and do not suggest these properties are available for reuse. These homes may well have been occupied again a few weeks after census night.

Indeed, on the figures for Dublin mentioned by the Senator, it is relevant that of that vacancy figure of 30,000, 4,000 properties were up for sale, 5,000 were being renovated, 3,000 were vacant because the resident was in hospital or care, a further 3,000 were vacant because the resident was recently deceased, and, finally, 1,000 were new builds awaiting their first occupation.

The Minister for Finance is considering this issue in consultation with colleagues before reverting to Government with proposals on the appropriate response. I understand Revenue intends to publish a profile of the occupancy data from the LPT returns shortly.

Photo of Mary FitzpatrickMary Fitzpatrick (Fianna Fail)
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I thank the Minister of State for the response.

We all believe in reasonableness and fairness and we can all accept that properties can be from time to time vacant. Nobody has any argument with that. In fact, the joint Oireachtas committee states that reasonableness must be applied.

I welcome the fact that the Department has made progress with the report and on its summary. I urge it to publish that report without any further delay.

I take the point about the 30,000 properties in Dublin. What they are saying essentially is that there are explanations for 16,000 of the 30,000. That is fine, but that means there are 14,000 without explanation that could house 30,000, 40,000 or 50,000 people. We are in an emergency and it is incumbent on the Department to publish the report as soon as possible and to bring forward recommendations.

Photo of Ossian SmythOssian Smyth (Dún Laoghaire, Green Party)
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I thank the Senator.

The report will be published as soon as possible. She has a point that there are still a significant number of vacant properties in Dublin and that the Department is doing the groundwork for introducing a vacant property tax.

With regard to dereliction, I am advised that the Department of Housing, Local Government and Heritage continues to liaise with local authorities on the implementation of the Derelict Sites Act 1990 with a view to improving its effectiveness. The Department initiated a review of the Act in November 2021 to identify potential improvements with local authorities and it will engage with local authorities on this matter during the year.

Regarding a tax on vacant residential property, the Minister for Finance is considering this issue in consultation with colleagues and will revert to Government with proposals on the appropriate response. The Minister for Finance will take the points that were raised by the Senator today on board when considering the matter.