Conor Sheehan (Limerick City, Labour)
Link to this: Individually | In context

371. To ask the Minister for Finance the reasons for the decision to implement a derelict property tax as opposed to a vacant property tax in Budget 2026; and if he will make a statement on the matter. [55528/25]

Paschal Donohoe (Dublin Central, Fine Gael)
Link to this: Individually | In context

In Budget 2026, I announced the introduction of a new Derelict Property Tax (DPT). The aim of this tax will be to encourage the activation of derelict properties. This tax will replace the Derelict Sites Levy and will be collected by the Revenue Commissioners. Currently, the Derelict Sites Levy is an annual levy of 7% of the land’s market value. The rate of DPT is yet to be determined; however, it is envisaged that the rate of the new tax would not be lower than the existing 7% rate.

Introducing this new tax will take time to ensure that Revenue and local authorities can put in place the necessary arrangements for the tax to operate as intended. For this reason, I intend to bring forward legislation providing for the DPT in 2026.

A Vacant Homes Tax (VHT) was announced in Budget 2023 and legislated for in Finance Act 2022. A residential property is within the scope of the tax if it has been occupied as a dwelling for less than 30 days in a chargeable period. The tax 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. Each chargeable period commences on 1 November and ends on 31 October of the following year.

The tax has been in operation for nearly three years. 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.

Statistics in relation to VHT are published on Revenue’s website at: www.revenue.ie/en/corporate/information-about-revenue/statistics/property-taxes/yearly-stats/2025/index.aspx.

The new DPT will operate alongside the VHT to ensure that both vacancy and dereliction are discouraged through the tax system.

The VHT is one of a suite of measures which were 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.

My Department continues to monitor all aspects of the property market and I will continue to work with my colleagues in Government to ensure that any further interventions in the housing market are appropriately calibrated, represent the best use of scarce public resources, and assist with boosting the supply of much-needed housing in the State.