The Vacant Homes Tax, which is designed to bring empty homes back into housing market for sale or rent, only has a limited effect, according to a report by the Comptroller & Auditor General.
It found there was a low rate of declaration of properties which were liable for the tax.
Among the homes which were declared as vacant, there was a high level of exemptions used which meant the properties were not liable for the tax.
In a sample of 44 cases who had submitted returns, 55% had filed returns late. Of the late filers 63% had paid the tax late.
The report said the Revenue has adopted a “lenient approach” because the tax was in a start-up phase and did not apply late filing surcharges.
The C&AG report recommends the compilation of a full register of properties liable for the tax by the Revenue Commissioners using third party source including ESB Networks data, local authorities and GeoDirectory.
It said estimates range between 57,000 and 81,000 potential vacant homes depending on the data source used.
The report said the results of a coordinated survey of residential property vacancy across local authorities which commenced in late 2022 had not been made available to the Revenue Commissioners.
“The establishment of a register of vacant properties liable to the tax and associated chargeable persons is essential for the effective administration of this tax,” the report said.
“It is also a key component for tracking and measuring the effectiveness of the tax at releasing vacant homes back into the housing market for use or resale.”
The report shows the Secretary General of the Department of Finance, John Hogan, confirmed the Government is working on the introduction of a new derelict property tax which will be legislated for in this year’s Finance Bill. This would operate alongside the Vacant Homes Tax.
Mr Hogan said the Department would also conduct a high level analysis of the Vacant Homes Tax which will examine the issue of data used and reporting of the tax since it was introduced in 2022.
