Thomas Pringle (Donegal, Independent)
Link to this: Individually | In context | Oireachtas source

55. To ask the Minister for Finance the expected revenue yield from an increase in the vacant homes tax to ten times the annual local property tax rate in a full year; and if he will make a statement on the matter. [24141/24]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Vacant Homes Tax (VHT) as announced in Budget 2023, aims to increase the supply of homes for rent or purchase to meet demand. Legislative provision for the tax was made in the Finance Act 2022 and states that a residential property will be within the scope of VHT, if it has been occupied as a dwelling for less than 30 days in a chargeable period.

VHT operates on a self-assessment basis, where the number of properties in scope and the amount of tax payable, depends 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 available exemptions from the tax.

The first chargeable period for VHT commenced on 1 November 2022 and ended on 31 October 2023. VHT in respect of the first chargeable period was charged at a rate equal to three times the property’s existing base Local Property Tax (LPT) rate, which is payable in addition to LPT. The first self-assessed returns were due on 7 November 2023 and the associated tax payable on or before 1 January 2024. As of April 2024, approximately 6,000 properties have been declared as vacant, with exemptions claimed in respect of approximately 2,500 of these properties. Approximately 3,500 properties have a liability to VHT, amounting to €2 million.

The second chargeable period commenced on 1 November 2023 and will end on 31 October 2024. VHT for this period will be charged at an increased rate, equal to five times the property’s existing base LPT rate, payable in addition to LPT. Returns in respect of this chargeable period will be due on 7 November 2024, with the associated tax payable on or before 1 January 2025. The yield for the second chargeable period will depend on the number of properties declared as liable for the tax.

While it is not yet known how many residential property owners may declare their properties as liable for VHT in the second chargeable period, if the numbers remained the same as the first chargeable period, it is tentatively estimated that there would be an approximate additional yield of €3.3 million, bringing the total estimated yield in the second chargeable period to €6.6m, should the VHT rate be increased to ten times the property’s existing base LPT liability.

It should be noted that VHT returns reflect the position at a particular point in time, and the estimated additional yield does not take into account any behavioural change.

Thomas Pringle (Donegal, Independent)
Link to this: Individually | In context | Oireachtas source

56. To ask the Minister for Finance the expected revenue yield from an increase in the residential zoned land tax to 5% of the land’s annual value in a full year; and if he will make a statement on the matter. [24142/24]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

The Residential Zoned Land Tax (RZLT) is a new tax introduced in Finance Act 2021 which seeks to increase housing supply by encouraging the activation of development on lands which are suitably zoned and appropriately serviced. It aims to bring those lands which have benefitted from investment in services and are capable of being developed forward for housing, rather than to raise revenue.

The tax measure is a key pillar of the Government’s response to address the urgent need to increase housing supply in suitable locations. However, it is important that affected landowners have sufficient opportunity to engage with the mapping process and that a fair and transparent process is applied when local authorities consider what land should be placed on the RZLT maps. Therefore, as part of Budget 2024, it was decided to extend the initial liability date of the tax by one year, from February 2024 to February 2025.

The purpose of this deferral is to allow for the annual mapping cycle to complete and afford landowners another opportunity to make submissions if their land is included on the maps prepared by local authorities.

In relation to the Deputy's question regarding the estimated yield from increasing the rate of RZLT, it is not possible to estimate a projected yield as the mapping process by local authorities has not yet concluded.

The revised final maps will be published on 31 January 2025 and the initial liability date for landowners will now be 1 February 2025. When the zoned land mapping process is concluded and the revised final maps are published, I will be in a better position to provide an estimate of the projected yield from land falling within scope of the tax.