Pearse Doherty (Donegal, Sinn Fein)
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278. To ask the Minister for Finance the estimated number of properties that will fall under the scope of the vacant homes tax in 2023; the average tax in nominal and percentage terms that will be payable with respect to those properties in 2023; the planned means to assess compliance with the tax; and if he will make a statement on the matter. [51364/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy is aware, the Vacant Homes Tax (VHT) is a new measure announced on Budget Day, which aims to increase the supply of homes for rent or purchase to meet demand. Further detail on this measure will be made available on the publication of the Finance Bill later this week.

The introduction of this tax follows from my Department's commitment under Housing for All to collect data on vacancy with a view to introducing a vacant property tax. The Finance (Local Property Tax) (Amendment) Act 2021 facilitated the collection on data on vacant property through LPT returns.

A preliminary analysis of the vacancy data was published by Revenue in July this year, following the LPT revaluation in November 2021, and can be found at: www.revenue.ie/en/corporate/documents/statistics/lpt/lpt-vacant-properties-report.pdf.

In arriving at the estimates for the Budget documentation, certain assumptions were made based on the Revenue data and took into account the number of long-term vacant properties (those unoccupied for greater than 12 months), their valuation band, as well as their reasons for lying vacant which may correspond with an exemption from the tax. It is tentatively estimated that less than 15% of the total properties reported as vacant may be in scope of the tax.

The preliminary analysis published by Revenue also gives the distribution of vacant properties by valuation band which suggests the distribution is broadly similar to that of properties that are liable for LPT and is likely to be reflected in the average amount of the tax paid. That said, the VHT payable will depend on the self-assessed returns submitted by property owners, the number of properties declared as liable and the number of property owners entitled to claim exemption from the tax.

It is intended that the legislation providing for the VHT will include a number of provisions designed to encourage compliance with the VHT and identify non-compliance. As outlined, the details will be published shortly in the Finance Bill.

As stated in my Budget speech, this measure aims to increase the supply of homes for rent or purchase to meet demand, rather than raise revenue The estimated yield is low, as I anticipate this tax will influence behaviour and lead to property owners putting their vacant properties to more effective use. As such, the number of properties that will be subject to this tax and the eventual yield may be lower than the estimates provided.