Vacancy tax payments in decline despite estimate of 82,000 vacant properties

Opposition TDs question whether tax is reaching those eligible with €1.6m due to Revenue from 2024

Sinn Féin’s housing spokesman Eoin Ó Broin said the Department of Finance must conduct an 'urgent review' into the tax. Picture: Gareth Chaney/Collins

Only a fraction of owners of vacant residential properties have paid the vacant homes tax (VHT), and the latest figures show the number of payments are actually falling.

There are estimated to be more than 82,000 vacant properties across the country, yet Revenue has confirmed that just €1.6m is due to be taken in from the vacant homes tax in 2024.

This is down by €700,000 compared to 2023, when just €2.3m was collected.

Between November 2022 and October 2023, some 6,655 vacant homes tax returns were made — of which 3,942 properties had the tax paid on them.

A year later, in the year up to October 2024, just 2,377 properties have been found to be liable for the tax.

The fall in the numbers paying the tax is in spite of estimates from the most recent GeoDirectory residential building report — which surveys vacancy across the country — that show there are approximately 82,031 vacant residential properties as of June 2024.

Opposition TDs questioned whether the tax is actually reaching those who are eligible to pay it.

Sinn Féin’s housing spokesman Eoin Ó Broin said the Department of Finance must conduct an “urgent review” into the tax.

He said it should have been rolled out “aggressively” and with limited exemptions for properties in probate or within the fair deal scheme, with a focus on returning properties to use.

Social Democrats deputy leader Cian O’Callaghan said the latest figures show there are significant numbers of vacant homes that are not being captured by the tax.

“The main point is that the vacancy tax is capturing a small amount of the actual vacant stock,” said Mr O’Callaghan.

He said this means the tax itself is ineffective at bringing vacant properties back into use, adding that it must be redesigned to capture more properties in its orbit.

The tax is charged at three times the rate of the local property tax, with the rate varying across the country.

It is charged on any residential property that had been stayed in for less than 30 days in the previous 12 months. However, there are a number of exemptions including where the property is undergoing works or if it is unoccupied due to either the death or illness of the owner.

The tax is also not applied to derelict or uninhabitable properties.

In a parliamentary question from November, Finance Minister Jack Chambers said Revenue has undertaken “significant work” to understand the total number of properties that are eligible for the tax.

Finance Minister Jack Chambers. Picture: Sam Boal/Collin Photos

“To date, Revenue has written to approximately 25,000 single property owners and 728 multi-property owners — requesting the property owners to log onto the portal to confirm whether the properties are occupied or vacant and, if applicable, to submit a return,” Mr Chambers said.

Mr Chambers’s response also breaks down where the tax was paid in 2023.

In Cork City, there were a total of 213 vacant homes tax returns made — but just 85 of them were found to be liable to pay the tax.

Only €50,000 was collected within the city, and over €140,000 was collected across the Cork County Council area.

In Dublin City, there were a total of 745 returns made on the tax. However, the tax was found to be payable on less than half of the properties.

In total, the tax raised €620,000 in the city.

Dealing with housing is set to be a key priority of the incoming Government, with new housing targets being agreed just days before the 2024 election was called.

Government formation talks are due to shift to housing today.

The outgoing Coalition agreed to raise the average housing target to 50,500 homes per year across the lifetime of the incoming Government. If met, this would see 303,000 homes built between 2025 and 2030.

For this year, the target is 41,000 homes. It will rise rapidly to 60,000 per year in 2030.

Most recently, it was estimated by the Government’s Housing Commission that Ireland is suffering from an underlying housing deficit of up to 256,000 houses.