Gary Gannon (Dublin Central, Social Democrats)
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38. To ask the Minister for Finance the evidence framework that was used in deciding not to increase the tax on derelict properties as a means of alleviating the housing crisis; and if he will make a statement on the matter. [12890/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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As clarified by the Deputy, the question relates to the Vacant Homes Tax. The Vacant Homes Tax (VHT) was announced in Budget 2023 and legislated for in Finance Act 2022. The main objective of this tax is to increase the supply of residential properties to bring those properties back into use. A residential property will be within the scope of the tax if it has been occupied as a dwelling for less than 30 days in a chargeable period. Each chargeable period commences on 1 November and ends on 31 October of the following year.

For the first chargeable period 1 November 2022 to 31 October 2023, the rate of VHT was three times the base rate of Local Property Tax. Finance Act 2023 increased the rate of VHT to five times the base rate of LPT for the second chargeable period from 1 November 2023 to 31 October 2024. This was further increased to seven times the base rate of LPT for the chargeable period 1 November 2024 to 31 October 2025 as part of Finance Act 2024.

As VHT is a behavioural tax, its key purpose is to target properties which are habitable, and which could be brought into use quickly. The tax applies to properties which are residential properties for the purposes of local property tax. Therefore, as with local property tax, VHT applies to habitable residential properties. It does not apply to derelict, uninhabitable properties as the purpose of the tax is to bring stock back to the market quickly. VHT was legislated for on this basis so that it could be introduced quickly and so it could be easily understood by property owners.

The VHT is part of a broad suite of measures introduced to address vacancy and dereliction under Pathway 4 of the Housing for All plan. Initiatives such as the Vacant Property Refurbishment Grant and Ready to Build Scheme, under the Croí Cónaithe Towns Fund, provide financial incentives for people to buy and refurbish vacant properties and sites. The Repair and Leasing and Buy and Renew Schemes support Local Authorities in leasing or buying vacant properties from owners to assist in the provision of social housing. The CPO Activation Programme was introduced as a proactive and systematic approach by local authorities in identifying and engaging with vacant and derelict properties, with the aim of bringing such properties back into use through various means, including through use of compulsory purchase powers.

Other actions to tackle vacancy include funding full-time vacant homes officers in every Local Authority, allowing exemptions to planning permissions to convert vacant commercial premises to residential use, and enhancing the Nursing Homes Support/Fair Deal Scheme to incentivise the productive use of vacant homes.

The VHT will be kept under review and consideration of any future changes will take place in the context of Budget 2026.