Dáil Éireann Debate, Wednesday - 9 October 2024
66. Deputy Pearse Doherty asked the Minister for Finance the first- and full-year revenue that will be raised next year by increasing the vacant home tax by 1%; and if he will make a statement on the matter. [40543/24]
Amharc ar fhreagraThe Vacant Homes Tax (VHT) is a self-assessed tax, and the number of properties in scope and the amount of tax payable, depend on the 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.
As the Deputy will be aware, the VHT is charged as a multiple of the Local Property Tax (LPT) charge, rather than as a percentage of market value. For the first chargeable period ended on 31 October 2023, VHT was charged at three times the property's base LPT charge. For the chargeable period that commenced on 1 November 2023, VHT will be charged at five times the property's base LPT charge. Returns in respect of this chargeable period will be due on 7 November 2024, with the associated tax due for payment on 1 January 2025.
In Budget 2025 I announced an increase in the rate of the tax from five times to seven times the base LPT charge. This will apply from the next chargeable period, commencing on 1 November 2024.
As of July 2024, approximately 3,500 properties have declared a liability to VHT, amounting to €2 million in respect of the first chargeable period. As VHT is charged as a multiple of LPT rather than as a percentage of market value, I am informed by Revenue that they do not have a basis on which to estimate the cost of the suggested increase to the tax.
However, I am advised by Revenue that a tentative estimate for the additional VHT yield raised by an increase of each increment to the multiplier of the LPT charge would be in the region of €0.7 million.
It should be noted that VHT returns reflect the position at a particular point in time, and the estimated additional yield does not take into account of any behavioural change.
