Barry Heneghan (Dublin Bay North, Independent)
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53. To ask the Minister for Finance if he will consider introducing a time-limited capital gains tax exemption for property owners to encourage the sale or reuse of vacant or underused residential properties, with the relief set to expire a short number of years after its introduction; and if he will make a statement on the matter. [40195/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Capital Gains Tax (CGT) is chargeable on a gain arising on the disposal of an asset, including a residential property, at the rate of 33%. The first €1,270 of chargeable gains of an individual in any year are exempt from CGT.

Section 604 of the Taxes Consolidation Act, 1997 provides relief from CGT on the disposal of an individual’s principal private residence (PPR), being a dwelling house together with land occupied as its gardens or grounds up to an area (exclusive of the site of the residence) of one acre. If a property was occupied by an individual as his or her PPR for all or part of his or her period of ownership, then full or partial relief from CGT will be available where a chargeable gain arises on the disposal of that property. The last 12 months of ownership of the property by the individual is deemed to be a period of occupation for the purpose of this relief. An individual may only have one PPR at any given time.

The existence of a 33% rate of CGT can help maintain a balance between the rate of taxation of capital assets and the higher rate of income tax. Significant exemptions often require a higher rate in order to generate an appropriate yield.

The Programme for Government commits to maintaining a broad tax base to guard against the need for counter-cyclical fiscal policy in the event of a downturn and to prepare for future budgetary challenges relating to population aging. Capital Gains Tax (CGT) is part of a system to ensure taxation is not focused solely on income tax and that those who benefit from gains in the value of their assets are included within the tax net on an equitable basis.

As with all taxes, CGT is subject to ongoing review, which involves the consideration and assessment of the rate of CGT and the relevant reliefs and exemptions from CGT. CGT policy and legislation is reviewed by the Tax Strategy Group (TSG), as part of the annual Budget and Finance Bill process and as part of wider tax policy considerations.

Finally, as the Deputy will be aware, it is a long-standing practice that the Minister for Finance does not?comment, in advance of the Budget, on any tax matters that might be the subject of Budget decisions.?

Barry Heneghan (Dublin Bay North, Independent)
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54. To ask the Minister for Finance if he will consider introducing a 10-year income tax relief on rental income from refurbished vacant properties that are converted into residential use, with the relief available for a limited period following its introduction; and if he will make a statement on the matter. [40196/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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A range of tax-based measures are in place to support or encourage the bringing of vacant residential properties back into use and to increase housing supply. These include the Living City Initiative, pre-letting expenses for vacant properties, the Vacant Homes Tax and the Residential Zoned Land Tax.

Additionally, the Department of Housing, Local Government and Heritage provides funding for the Vacant Property Refurbishment Grant which supports bringing vacant and derelict properties back into use. A grant of up to a maximum of €50,000 is available for the refurbishment of vacant properties for occupation as a principal private residence and for properties which will be made available for rent (or up to a maximum of €70,000 for derelict properties).

The Programme for Government commits to a new, all of government national housing plan to follow Housing for All, which is underpinned by a multi-annual funding commitment.

I will continue to work with my cabinet colleagues to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of scarce public resources and boost the supply of housing in both the public and private sectors.

However, and as the Deputy will appreciate, decisions regarding taxation measures are made in the context of the annual Budget and Finance Bill processes, at the appropriate time, and having regard to the sound management of the public finances. It is a long-standing practice of the Minister for Finance not to comment in advance of the Budget on any tax matters which might be the subject of Budget decisions.

Barry Heneghan (Dublin Bay North, Independent)
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55. To ask the Minister for Finance if he will consider replacing the existing vacant homes tax with a vacant property tax, and if he will consider increasing the tax annually by 5% from year two, up to a maximum of 15% over three years, to improve the activation of underused housing stock; and if he will make a statement on the matter. [40197/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Programme for Government 2025 commits to introducing a new, all-of-Government national housing plan to follow Housing for All. Any proposals in respect of new or existing measures will be considered in this context. Furthermore, it is a long-standing practice of the Minister for Finance not to comment on any tax matters that might be the subject of Budget decisions.

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.

VHT was charged at three times a property’s base local property tax (LPT) charge in respect of the first chargeable period (1 November 2022 – 31 October 2023), and at five times a property’s base LPT charge in respect of the second chargeable period (1 November 2023 – 31 October 2024). VHT currently applies at a rate of seven times a property’s base LPT charge with effect from 1 November 2024.

The rate seeks to achieve an appropriate balance between incentivising owners of vacant homes to bring their properties back into use and not penalising homeowners for normal, temporary vacancy. The tax applies to properties which are residential properties for the purposes of LPT. VHT was legislated for such that it is charged as a multiple of a property’s base LPT charge, rather than at a particular rate. This allowed for the tax to be introduced quickly. It also ensures that the tax to be easily understood by property owners.

It is important to ensure that the taxation of vacant homes operates well alongside existing property taxation measures, and that it is easy to understand and administer. A tax which increases annually where a habitable residential property remains vacant year-on-year would be complex to administer. Furthermore, charging the tax using a different methodology would add to the complexity of the tax from a taxpayer and Revenue’s perspective.

The VHT is part of a broad suite of measures introduced to address vacancy 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.

Barry Heneghan (Dublin Bay North, Independent)
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56. To ask the Minister for Finance if he will consider introducing a 9% VAT rate on construction products and materials that deliver measurable carbon savings during the operational phase of a building’s life cycle, to incentivise sustainable construction practices; and if he will make a statement on the matter. [40198/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy may be aware, under the EU VAT Directive, which Irish VAT law must comply, the VAT rate applied to goods and services must be the standard rate unless they are listed under Annex III of the Directive which allows for a reduced rate of VAT. Construction products and materials are not included in Annex III of the Directive so no reduced rate can be applied to them.

Ireland currently applies the standard rate of VAT of 23% to all construction materials with the exception of ready to pour concrete and concrete blocks per Paragraphs 16(1) and 16 (2) in Schedule 3 of the Value-Added Tax Consolidation Act 2010. By way of a derogation in the Directive, which allows member states to maintain historic VAT treatment for certain goods and services, Ireland applies a 13.5% rate to certain concrete blocks and ready to pour concrete. In applying this rate, there is a condition that these rates are "parked" and must not be lowered below 12%.