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New Vacant Homes Tax targets unoccupied properties but there are some exemptions

It will be charged at three times the rate of the building’s local property tax liability.

LAST UPDATE | Sep 27th 2022, 6:23 PM

THE GOVERNMENT HAS moved to introduce a Vacant Homes Tax (VHT) in an attempt to increase the number of properties available to buy or rent.

The tax, introduced as part of Budget 2023, will target homes that are occupied for fewer than 30 days in a 12-month period.

The Department of Finance says there are a number of exceptions to ensure that property owners “are not unfairly charged for temporary periods of vacancy with genuine reasons”. 

The reasons listed, which will mean an exemption, include: properties recently sold, listed for sale or rent, properties vacant due to occupier’s illness or long-term care, and properties vacant due to significant refurbishment work.

Premises not liable for the local property tax – such as those which are derelict or not suitable for use as a dwelling – will also be exempt.

The new tax will be charged at a rate of three times the property’s local property tax liability and be administered by the Revenue Commissioners. Owners will be required to file an annual return.

It is expected to raise as much as €4 million.

The tax has been welcomed by some housing and homeless charities.

Wayne Stanley, head of policy and communications with the Simon Communities of Ireland described the proposed introduction of the tax as a “paradigm shift”, but cautioned that the rate may be too low to have a significant impact.

Peter McVerry Trust also welcomed the tax, having called for it since 2017, with chief executive Pay Doyle saying it “represents one of the final measures needed to realise the full potential of vacant homes”.

“We believe that the measure offers hope and the prospect of new social housing in areas of need, and communities can look forward to less and less vacant homes blighting their communities. Reusing vacant properties will also be critical for housing needs under the Housing First programme and the wider need to house single people on the social housing waiting list.”

Sherry FitzGerald estate agents cautioned that while the tax is “laudable in its intent”, it is “unlikely to return a substantial amount of stock back to the market”.

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