Róisín Shortall (Dublin North West, Social Democrats)
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314. To ask the Minister for Finance his plans in respect of the Revenue Commissioners taking responsibility for collecting data on vacant homes in respect of the length of vacancy and the level of a potential levy; when he expects to be able to implement such a levy; and if he will make a statement on the matter. [32076/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I consider that the primary objective of a vacant residential property tax or levy would be to increase the supply of homes for rent or purchase to meet demand rather than increasing tax revenues. However, before introducing such a tax it is of course important to have a sound understanding of the quantity, locations and characteristics of long term vacant dwellings, and the reasons why they are vacant.

An independent report on this topic commissioned by my Department was laid before Dáil Éireann in September 2018 in accordance with the provisions of section 86 of Finance Act 2017. The independent Indecon Consultants report on the Taxation of Vacant Residential Property presents a detailed evidence-based assessment of vacancy rates in areas in which the demand for housing is most acute. This assessment suggests that the vacancy rate in these areas was significantly lower than the national average and had fallen in recent years.

The report suggested that the vacancy rate within rent pressure zones, excluding holiday homes, was approximately 6% but that most of these vacancies were short and medium, with a low level of long term vacancies – the rate lying between 0 and 3% for Dublin for example. The report estimated the rate of properties which are vacant long term and habitable to be only 0.8% of properties in rent pressure zones. The report also suggested that the vacancy rate was likely to continue to fall due to market developments.

Indecon Consultants did not recommend the introduction of a residential vacant property tax, as they did not believe it would be an effective response to deal with the housing shortages. Indecon’s view was that the very low vacancy rates in the areas of greatest demand for housing, particularly in terms of medium-term vacancy, indicate that the potential for a vacant property tax to increase housing supply was very limited and could represent a distraction from the need to significantly accelerate the building of new social housing, affordable housing and the facilitation of other housing supply.

It is of course necessary to monitor the position and I understand in that regard that the CSO plans to deploy an enhanced approach during the next Census to the collection of information in relation to residential properties that appear to be vacant. I would like to use the LPT revaluation opportunity to obtain some limited information about vacant residential properties which would be useful in terms of future policy making. Revenue is currently redesigning its LPT return form to take account of the new arrangements. It is likely that the questions will be limited to whether a property is vacant as at 1 November 2021, if so, if it has been vacant for a specified period and the reason for the vacancy.