Press release
Minister Donohoe welcomes publication of Revenue data on vacant property
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Published on
Last updated on
The Minister for Finance Paschal Donohoe has today (Wednesday) welcomed the publication by Revenue of its preliminary analysis of the data on vacancy captured as part of the Local Property Tax (LPT) returns.
Addressing vacancy and dereliction, and maximising the use of the existing housing stock, is a priority objective of the government. Housing for All includes a specific action for the Department of Finance to collect data on vacancy with a view to introducing a vacant property tax.
Provisions included in the Finance (Local Property Tax) (Amendment) Act 2021 enabled Revenue to collect certain information on vacant properties in the Local Property Tax return forms submitted by residential property owners in respect of the new LPT valuation period 2022-2025.
The preliminary analysis indicates that levels of vacancy amongst LPT liable properties are low across all counties and lie within the range that is considered to be in line with a functioning housing market. The data also indicates that many of the reasons given for vacancy are genuine and acceptable reasons for temporary vacancy, for example, where a property is for sale, between lettings, undergoing refurbishment, where the property is subject to a probate application or other legal proceedings, holiday homes, or in cases where the owner is in long-term care.
In Housing for All, the government has set out a suite of incentives available to encourage re-use of properties and increase the supply of housing. However, in addition, the government is committed to exploring options around sanctions for non-use of residential property so that there is some penalty for leaving a property vacant for a prolonged period without a genuine reason at a time where there are pressures in terms of housing supply.
The Revenue analysis provides a basis for the Department of Finance to assess the merits and impact of introducing a Vacant Property Tax, and how best such a tax might be designed. This work has already commenced and the Minister intends to bring forward proposals on a targeted measure that achieves an appropriate balance between incentivising owners of vacant habitable residential properties to bring their properties back into use, and ensuring any such tax does not arbitrarily or excessively penalise home-owners for normal temporary vacancy.
The government and in particular, the Minister for Housing, Local Government and Heritage, Darragh O’Brien, continues to progress other work strands aimed at maximising the use of existing housing stock. This includes a review of the Derelict Sites legislation, a new programme to help Local Authorities buy or compulsory purchase 2,500 vacant homes in their areas; and the launch of a new Town Centre First policy, designed to tackle vacancy, combat dereliction and breathe new life into our town centres.
Another important reform is the new residential zoned land tax introduced in Finance Act 2021 to activate vacant land so as to incentivise greater development for housing.
Commenting on the release of the Revenue preliminary analysis, Minister Donohoe said:
"I welcome the publication of Revenue’s Preliminary Vacancy Analysis based on the Local Property Tax returns.
"Addressing vacancy and dereliction, and maximising the use of the existing housing stock, is a priority objective of the government. While both Revenue data and the preliminary Census 2022 data show that vacancy is within a normal range, it is important that the government acts to ensure all viable housing stock is being used.
"This information provides the basis for ongoing work on the merits, impact and design of a tax on vacant residential properties. Further details on this measure will be made available as my officials work out the technicalities of administering a new tax."
In Housing for All, the government has set out a suite of incentives available to encourage re-use of properties. However, in addition, options are being examined to introduce sanctions for non-use of residential property so that there is some penalty for leaving a property vacant for a prolonged period while so many are in need of homes. This government has committed to a range of actions to address vacancy and ensure the efficient use of housing stock.
Housing For All includes a specific action for the Department of Finance to collect data on vacancy with a view to introducing a tax on vacant residential property.
In considering the case for a vacant property tax, it is important to have a sound understanding of the quantity, locations and characteristics of long-term vacant properties. It is also essential to identify the reasons for vacancy, and whether this is long or short-term in nature. There may be genuine and acceptable reasons for vacancy. Furthermore, as is the case for all taxes, a strong rationale for intervention specifically through taxation must be identified.
The Finance (Local Property Tax) (Amendment) Act 2021 enabled Revenue to collect certain information in relation to the occupancy status of residential properties in the Local Property Tax (LPT) return forms submitted by residential property owners in respect of the new LPT valuation period (2022-2025). As of late- June, these figures are 1.62 million and 91% compliance rate. Payment compliance rate is higher (95%).
In relation to vacant properties, the LPT returns requested information such as whether a property is vacant; the reasons for the vacancy; and whether the period of vacancy is 12 months or more. The return data provide a snapshot of vacant properties in Ireland as at the valuation date of 1 November 2021.
It is important to note that LPT applies only to habitable residential properties, and derelict or properties unsuitable for use as a dwelling are not captured under the LPT system.
The Revenue analysis was published on 6 July 2022. In total, 57,206 (3.2%) properties were indicated by their owners as being vacant on 1 November 2021, according to latest available information. A vacancy rate of between 2.5% and 6% is considered normal in a properly functioning housing market. For instance, in the Dublin City Local Authority Area, 2.6% of properties in that area were reported as vacant. Similarly low rates exist in other areas of highest demand, such as:
Nationally, the most frequent reason given for vacancy was that the property was “Undergoing Refurbishment” (22.4%), “Other” (21.7%) and “Holiday Home” (20.4%). For properties reported as vacant for more than 12 months, the most frequent reasons given were Undergoing Refurbishment” (30.7%), “Other” (28.4%). A breakdown of “Other” category is not available. This was an option by dropdown menu on the LPT return, with no additional explanatory field. Revenue advise that these properties are broadly in line with the profile of reported vacant properties in terms of geographical spread, valuation and duration of vacancy.
Properties in this category might include, for instance, where a property has been inherited and an owner may not yet have decided what they will do with the property; or a property that would require renovation to meet rental/sale standard.
The highest rates of vacancy were returned in Donegal (6.7%), Kerry (6.4%), Leitrim (6.3%) and Mayo (6%). In these areas, the most common reason for vacancy was the incidence of holiday homes making up 40.6% of the vacancy in Donegal and 39.9% of the vacancy in Kerry.
Of the 57,206 properties reported as vacant by their owners, 3,450 are owned by Local Authorities and Approved Housing Bodies (AHBs). Of the 53,756 vacant properties not owned by local authorities and AHBs, 2,959 vacant properties have claimed exemptions from LPT (as may be expected, the biggest category, 1,627 properties, is the exemption related to properties unoccupied due to illness of owner). 42,522 of the vacant properties were indicated as Non-Principal Primary Residences (NPPRs) by their owner. A further 476,433 properties were indicated as occupied NPPRs (a majority of these being rental properties).
Overall, 61% of vacant properties were reported as being vacant for less than 12 months. However, in all but one of the Local Authority areas, at least 50% of vacant properties were reported as having been vacant for less than 12 months.
There are 553 property owners who own 10 or more properties with at least one property reported as vacant. Of these, 108 owners own 10 or more vacant properties.
77% of properties reported as vacant are valued in Band 1,2 or 3, that is, value less than €350,000.
The preliminary findings of Census 2022 provided a figure of 166,752 vacant homes nationwide. This represents 7.8% of the housing stock. There were approximately 183,000 vacant homes reported in the Census 2016 and the Census 2022 figures represent a 9% reduction overall.
The CSO points out that their Census figure of number of vacant homes contains many dwellings that may be unoccupied for a relatively short period of time and a home deemed vacant does not necessarily mean a home is available for re-use or to house other people.
The figure should not be used as a proxy for the number of long-term vacant dwellings. The figure is a point-in-time indicator of whether a property was inhabited or not on Census night.
Housing for All outlines a suite of measures aimed at addressing Vacancy in a coordinated, robust manner. These include:
The planning regulations, introduced in 2018 (SI 30 of 2018), which exempted certain vacant commercial premises, including ‘over the shop’ type spaces, from requiring planning permission to change to residential purposes have been extended until 2025. The Regulations to extend this provision were signed by Minister O’Brien on 21 February. This extension provides an immediate and seamless continuance of the previous exemption regulations. In addition, the scope of the exemption was also extended to include an extra class of use, that of ‘public houses’.