Jennifer Murnane O'Connor (Carlow-Kilkenny, Fianna Fail)
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154. To ask the Minister for Finance if there are any plans to increase the vacant property tax; and if he will make a statement on the matter. [49342/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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In Housing for All, the Government has set out a suite of incentives available to encourage re-use of properties and increase the supply of housing. While both Revenue data and preliminary Census 2022 data show that vacancy lies within a range that is considered to be in line with a functioning housing market, it is important that the Government acts to ensure all viable housing stock is made available for use.

Accordingly, a new Vacant Homes Tax (VHT) will be introduced in 2023. The measure aims to increase the supply of homes for rent or purchase to meet demand, rather than raise revenue.

The VHT will be self-assessed and administered by the Revenue Commissioners. The tax will apply to long-term vacant residential property and will be paid by property owners. A property will be considered vacant for the purposes of the tax if it is occupied for less than 30 days in a 12-month period.

The VHT will operate by requiring owners of vacant residential properties to file an annual return declaring that their properties were vacant in the applicable 12-month period and indicating the LPT valuation band/valuation that applies to the property. This will be used to assess their VHT liability.

The VHT will share some features with the existing Local Property Tax. The tax will apply to buildings which are residential properties for the purposes of LPT. This means that it will not apply to derelict or properties unsuitable for use as a dwelling which are not captured under the LPT system.

There will be a number of exemptions to ensure property owners are not unfairly charged for temporary periods of vacancy with genuine reasons.

The tax will be charged at a rate equal to three times the property’s existing base Local Property Tax liability – that is, the liability before the application of the Local Adjustment Factor (LAF).

I assume that the Deputy's question refers to the rate to be charged.In setting the appropriate rate for the tax, I believe that care must be taken to get the balance right between achieving the objective of encouraging the use of available housing, but at the same time not being excessively penal on a limited group of property owners.

As this is a new measure, it is important to see how the tax operates after coming into effect, and then make an assessment as to whether it is working. My Department will monitor the tax and if it is not considered to be effective in bringing more properties into use, then I will have no hesitation in reviewing the measure including the rate.

It is anticipated that the VHT will come into effect in 2023. Further detail on the operation of the tax will become available following the publication of the Finance Bill on 20 October.