Brendan Griffin (Kerry, Fine Gael)
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162. To ask the Minister for Finance if he has considered the tax costs associated with bringing derelict buildings back into use as homes; if he will move to reduce or eliminate these costs particularly for first-time buyers; and if he will make a statement on the matter. [55856/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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While the issue of derelict housing is the remit of the Minister for Housing, Local Government and Heritage, any matters in relation to taxation or tax incentives are considered by the Department of Finance.

As the Deputy will be aware, there is a Vacant Property Refurbishment Grant available for those who meet the relevant criteria. This is a payment you can avail of if you are turning a vacant house or building into your permanent home. A grant of up to €30,000 is available.

Taxes on capital including Capital Gains Tax and stamp duty ensure that taxation is not focused solely on income and that those who benefit from gains in the value of their assets, or who have the means to acquire assets, are included within the tax net on an equitable basis.

I should also note that the VAT Directive allows for a reduced rate to apply to the renovation and repair of private dwellings, excluding materials which account for a significant part of the value of the service supplied. This is already applied in a number of Member States including Ireland where the reduced rate of 13.5% applies. Under the VAT Directive it is not possible to apply a different VAT rate for first-time buyers.

However, it is important to be aware, that taxation is only one of the policy levers available to the Government through which to boost overall housing supply and the presumption should be that non-tax alternatives should be considered before the use of tax-based measures. I would wish to avoid introducing or widening the scope of any tax expenditures that could, or already do, distort the market. Tax exemptions which could be costly to the Exchequer may not in fact assist purchasers of derelict or renovated property as any gains to owners may not be passed on to purchasers. Previous experience with tax incentives in the housing market has demonstrated a considerable potential for unexpected consequences to such changes which can end up being unhelpful to the broader market. They are also prone to being deadweight to an extent, in that what they seek to achieve would often still have happened in their absence.

In conclusion I currently have no plans to provide for relief from taxation for the development of derelict properties. However all taxes are subject to ongoing review which includes the consideration and assessment of rates along with any associated reliefs and exemptions, within the wider tax policy context.