Revenue to get powers to collect 7% tax from owners of derelict properties

Revenue is set to be armed with additional powers to raise taxes from owners of derelict properties, as part of a new taxation plan from Tánaiste Simon Harris. Picture: Clodagh Kilcoyne/PA Wire

Revenue is set to be armed with additional powers to raise taxes on owners of derelict properties, as part of a new taxation plan from Tánaiste Simon Harris.

The taxation bill, which will be laid before the Dáil this week, will place a 7% tax on the owner of a derelict property.  

From January, local authorities must draw up registers of derelict buildings in their areas to forward to Revenue, which will administer the charge for the first time.

Revenue will be empowered to enforce the levy following frustration over local authorities'  approach in raising the tax. 

Under existing legislation, local authorities can impose a derelict sites levy of 7% on all derelict sites on their register. 

In 2025, ten local authorities filed no return for the derelict sites levy.

"This is quite a novel approach that the Irish Government has taken," Mr Harris said in June.

"We're taking it out of frustration, we're taking it out of some bit of anger, quite frankly, that the scourge of dereliction is in our communities, that local authorities have not done enough to rectify it.

"I've sat in front of far too many chief executives of far too many councils... and they eyeball us and say they've done enough, and they haven't. They're letting young people down," Mr Harris said.

The new tax proposals will not come into effect until 2028. The tax will only apply to an owner if they fail to take remedial action on their property.

Under the proposed new legislation, the owner of a derelict property valued at €500,000 could be forced to pay a tax bill of €35,000. 

According to Cork City Council, a property is classified as derelict if: “It contains land or structures that are in a neglected or unsightly condition; It contains dangerous or ruinous structures; It has accumulated a lot of litter or other waste due to the vacant nature of the site and illegal public dumping/ littering.” 

In 2025, ten local authorities filed no return for the derelict sites levy. 

The Finance Bill set to be laid before the Dáil will contain 237 pages of different taxation measures for different sectors.

The first phase of the plan will see the new tax apply to 107 cities and towns with populations of 4,000 or more.