125. Deputy Thomas Gould asked the Tánaiste and Minister for Finance for an update on the collection of the vacant homes tax. [68491/26]

Deputy Gould ask me to take this in his absence. Obviously, we have been waiting a long time for the vacant homes tax to be introduced. There was a collection of data and so on. It has been introduced now. We understand that the collection rates are very low. I am asking the Minister for an update. We have the 2025 self-assessed data, but what is the most recent data the Minister has? Have we seen a spike in terms of compliance? What options is the Department looking at for this year? I think we can accept that the tax is not working in its current form.

I thank Deputy Doherty and Deputy Gould, whom I know has a particular interest in this. The vacant homes tax was introduced in 2022. The tax is currently charged at seven times the base rate of local property tax. Following re-evaluation last year, in which all local property tax charges were increased by a small to moderate amount, vacant homes tax will scale accordingly. The tax operates on a self-assessment basis where the number of properties in scope and the amount of tax payable depends on the self-assessed 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. There was a decrease in the number of properties liable for the vacant homes tax between the first and second chargeable periods and a further decrease between the second and third chargeable periods. This is not unexpected, given the behavioural nature of the tax, its objective of bringing vacant residential properties into use and the level of demand, which we all know, for housing in the State.

Regarding the collection of vacant homes tax, I am advised by Revenue that, from January to August of this year, approximately €1.34 million was collected in vacant homes tax. As the Deputy is aware, I intend to introduce a new derelict property tax in this year's budget. Further details about the tax will be part of budget 2027, which I hope we can then legislate for in the Finance Bill. Creating and introducing the new tax this year is a key priority for my Department. It is hoped that this tax will paint a clear picture of the level of dereliction across our towns and cities. The data collected will help inform local and national decisions regarding long-term vacant and derelict properties. I will continue to work with colleagues to ensure that any further interventions are appropriately calibrated and represent the best use of resources.

The new measure will try to build on the progress we have made to date in relation to vacancy and dereliction. The derelict properties tax - a robust one using Revenue - is the way to go. We will be outlining details of that in the budget but looking to legislate across the House on this between now and the end of year.

My understanding, and the Minister might correct me if I am wrong, is that dereliction and vacancy are two different things.

They are, yes.

We are talking about apples and oranges here. The Minister is talking about a derelict properties tax. That is fine; a property that is derelict is visibly derelict. We are talking about vacant homes. We are talking about how the whole idea of this tax is to get homes into usage and to penalise people for leaving properties vacant and not using them in the middle of a housing crisis. We have argued time and again for many years with the Government to introduce this tax and to make it stronger and its rates higher.

Crucially, we cannot have the situation where the Central Statistics Office, CSO, says there are 70,000 vacant properties. I accept that not all of the 70,000 would fall under the scope of this tax because of some of the caveats and exemptions that are there, but it is not the case that there are only 2,361 vacant properties across the State. It is just not the case. This has been going on, and what I have not heard from the Minister is how he is going to fix it. He is telling me that he is going to introduce a different tax for a different type of property. That is not what I am interested in at the minute. I am interested in the tax that has existed for the last four years. It is simply not working. Has the Minister any proposals to actually fix this? Are we going to see anything in the budget that is going to fix this or is the Minister just going to leave it the way it is?

I fully understand and agree that vacancy and dereliction are two different things, but the taxes are all aimed at the same purpose of making sure that we get homes back into use. A tax of vacant residential property is one policy tool to address vacancy but it is also a behavioural change tax. It is about making sure that people do not leave houses in vacancy. We would expect, when we bring in a tax, that behavioural change will start to take effect.

I take the Deputy's point. He referenced the 70,000 figure while also acknowledging that there may be many that do not meet the definition of vacancy. When Revenue looked through all of this, as the Deputy will remember when all of this was introduced, it wrote to around 25,000 property owners who were potentially within the scope of the vacant homes tax. Many of the property owners declared them as being occupied and for the first chargeable period of the tax, there were about 6,800 properties declared as vacant. Some 2,800 of them claimed an exemption from the tax. In the first chargeable period, which went from November 2022 to October 2023, there were 3,910 properties liable for the vacant homes tax. That reduced in the next chargeable period to 2,357. In the third chargeable period, from November 2024 to October 2025, there were 1,655 properties liable. Therefore, we see this as a tax that is actually bringing about behavioural change. The next focus from a Revenue perspective and a Government perspective will be tackling what we believe to be the bigger issue around derelict properties.

The Minister has announced the derelict properties tax numerous times, but derelict properties are derelict properties and are harder to get into use in the system than vacant homes. Of course we need the tax on them - that should absolutely happen - but it is not a case of looking at something else and forgetting about the fact that this tax here, which has been introduced for the last four years, is not working. I still have not heard anything from the Minister that suggests there is going to be any change. He has brought in a tax that allows people to self-declare that a house is not vacant. Is there any follow up in relation to this?

Is there a compliance issue? Has the Tánaiste sat down with Revenue? Is he concerned that fewer than 10% of those who got these letters are paying the tax? Is he concerned that a tiny fraction of the owners of properties that the CSO identifies as vacant are in compliance when it comes to the tax?

We are in the middle of a housing crisis. The accepted view is that a large number of homes are vacant. The idea behind this behavioural tax is that you would tax people in order to get these properties into use. Have 10,000 or 20,000 houses gone into the private rental sector as single tenancies? No, they have not. It has gone in the other direction. All the evidence points towards there not being a massive change in behaviour. On foot of that, one can only be led to believe that this tax is not working and is not being complied with.

Revenue does a very good job of collecting taxation in this country. That is why there are often calls in this House for derelict properties to be handed over to Revenue, because Revenue has teeth. As the Deputy knows, Revenue has powers under the Taxes Consolidation Act 1997 to address compliance or non-compliance with legislation. It has the power to require a chargeable person to file a vacant homes tax return. It has powers to make inquiries, raise and amend assessments and request a chargeable person to provide certain records. If anyone has evidence of people not complying with taxation law, I am sure Revenue would be very interested in that, particularly as it also has the power to issue a notice to a chargeable person requiring them to provide records to demonstrate that their property was in use as a dwelling for 30 days or more in a chargeable period. Where such records are not provided or where the records provided are insufficient, Revenue may deem the property to be vacant for the purposes of the vacant homes tax.

It is entirely possible that when this House legislates on vacancy and links it with the local property tax structure, behaviour does change and that, therefore, the number of properties that become eligible for tax, when it is a behavioural change tax, actually falls. We keep these issues under review, but Revenue does have significant enforcement powers.