David Stanton (Cork East, Fine Gael)
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79. To ask the Minister for Finance to provide an update on the vacant homes tax; and if he will make a statement on the matter. [28592/24]

David Stanton (Cork East, Fine Gael)
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Will the Minister for Finance give an update on the vacant homes tax, VHT, including how many houses have been included, how much money has been collected and what are the projections for the future?

Jack Chambers (Dublin West, Fianna Fail)
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The VHT was announced in budget 2023 and legislated for in the Finance Act 2022. The key objective of this tax is to increase the supply of homes for rent or purchase by encouraging the owners of vacant, habitable residential properties to bring those properties back into use. The tax applies to properties which are residential properties for the purposes of local property tax, LPT. Therefore, as with local property tax, VHT applies to habitable residential properties and does not apply to derelict or uninhabitable properties.

The VHT is only one part of a much broader suite of measures being implemented by the Government to address vacancy and bring properties back into use. For example, initiatives such as the vacant property refurbishment grant and ready to build scheme provide financial incentives for people to buy and refurbish vacant properties and sites for their principal private residence. A residential property is within the scope of VHT if it has been occupied as a dwelling for less than 30 days in a 12-month chargeable period. A chargeable period for the purpose of this tax runs from 1 November to 31 October each year. The first chargeable period ended on 31 October 2023. The first self-assessed returns were due on 7 November 2023 and the tax was payable on 1 January 2024. The next returns for the tax will be due on 7 November this year.

For the first chargeable period, the rate of the tax was three times the property’s existing base LPT charge. For the chargeable period ending 31 October 2024 and subsequent chargeable periods, VHT will be charged at five times the property’s existing base LPT charge, as provided for in the Finance (No.2) Act 2023. 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. Revenue has confirmed that, as of June 2024, more than 6,400 properties have been declared as vacant, with exemptions claimed in respect of more than 2,600 of these properties. Approximately 3,750 properties have a liability to VHT, amounting to €2.2 million.

David Stanton (Cork East, Fine Gael)
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I thank the Minister for his response and congratulate him on his appointment, as I did not do so when I stood up earlier.

Do the Minister or the Revenue Commissioners have an estimate of how many vacant properties might be liable for VHT? Does the Minister agree that the number he quoted of 6,400 and the actual number that paid the tax is very low? Do the Department or the Revenue Commissioners have any link with the vacancy survey project, which is supported by the Department of housing and carried out by the local authorities? It might give a better indication of how many vacant properties there are. Am I correct that the census showed more than 166,000 vacant properties? Does the Minister agree that is a long way, if it is even partially correct, from the number of vacant properties that are actually paying tax?

Jack Chambers (Dublin West, Fianna Fail)
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Tackling vacancy is a key priority for the Government and is part of the wider Housing for All strategy. The Deputy has submitted a question on this to my colleague, Deputy Darragh O'Brien.

As to the Deputy's question about the Revenue Commissioners, they are engaged around the VHT. It is collected on a self-assessment basis and applies under specific criteria. We have a range of other databases that use different statistical bases to define vacancy. The primary purpose of the vacant property register administered by Revenue is the administration of the vacant homes tax.

I will engage in a meeting with the Revenue Commissioners in the coming weeks on the Deputy's specific questions about their level of engagement with other Departments. There is collaboration on this across the Government. It was introduced as an important reform to try to deal with issue of vacancy. It is complemented by the work of my colleague, the Minister for Housing, Local Government and Heritage, Deputy O'Brien, on the system of grants he has advanced. I will come back to the Deputy directly about Revenue's direct engagement. However, there has been a collaborative effort across the Government with the introduction of the tax and tackling vacancy as part of Housing for All.

David Stanton (Cork East, Fine Gael)
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Does the Minister agree that because the tax is self-assessed, many people might not know about it? What imperatives are on people to report they have a vacant property that might be liable for this tax? If people just sit there and do not do anything and even want to sell their properties later, because it is not on any register there will not be any clawback at that time as there would be with other taxes. Does the Minister agree that a lot of tightening up needs to be done to make this tax the incentive it should be for people to bring properties back into use?

Jack Chambers (Dublin West, Fianna Fail)
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The Department of Finance has engaged regularly with the Department of housing. The review of the derelict sites levy is also an important context. A number of practical challenges have been identified in addressing dereliction, such as difficulties in identifying properties and their owners. That is one challenge.

This tax itself is part of a broader suite of measures which is being advanced. The vacant homes action plan that was published by my colleague, the Minister, Deputy O'Brien, is part of the wider footprint in addressing vacancy. I will come back to the Deputy on Revenue's direct engagement and on what level of detail or information it has, which is part of the Deputy's wider question. I said I would be meeting with that office in the coming weeks.