Catherine Connolly (Galway West, Independent)
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388. To ask the Minister for Finance his plans to introduce a vacant residential property tax; and if he will make a statement on the matter. [31865/21]

Paschal Donohoe (Dublin Central, Fine Gael)
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I consider that the primary objective of a vacant residential property tax 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.

Accordingly, in 2018 I commissioned a study on the potential of a vacant residential property tax to meet the objective of increasing the supply of homes. The resulting report presented a detailed evidence-based assessment of vacancy rates in areas in which the demand for housing is most acute. The report did not recommend the introduction of a residential vacant property tax as it considered it would not be an effective response to deal with the housing challenges. The very low vacancy rates in the areas of greatest demand for housing, particularly in terms of medium term vacancy, indicated 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 private sector supply. In their report Indecon stated that while such a tax would be likely to generate significant media and public attention and may be seen as part of an effective response to our housing problems, they did not believe that this would be supported by the evidence in their report.

The report recommended that the matter be kept under review and this remains the position.