Vacant homes to be slapped with new tax

RATE Three times the LPT will apply

Thousands of vacant homes will be subject to a new tax from the start of November in a government attempt to make more properties available for sale or rent.

The vacant homes tax (VHT) will be charged at a rate equal to three times the property’s existing base Local Property Tax (LPT) rate.

This means a house valued at €300,000 for the property tax would attract a vacant home tax of €945, if unoccupied. It is likely to apply to nearly 60,000 properties.

Revenue issued a briefing document on the new tax this week, outlining how it will be applied.

Any home that has been empty since November 1, 2022, will be subject to the tax if it will not have been used as a dwelling for more than 30 days between then and the end of next month.

According to Revenue the primary objective of VHT is to impact the behaviour of vacant property owners to make their habitable, residential properties available for sale or for rent, thereby increasing the supply of homes to meet demand, rather than to secure increased tax revenues.

As VHT is a self-assessed tax, it means that the obligation will be on property owners to determine whether they have a liability to VHT for a chargeable period and to satisfy their pay and file obligations. The first chargeable period for VHT commenced on November 1, 2022, and will end on October 31, 2023. If a residential property has been in use for less than 30 days in this chargeable period, then the owner of the property must file their return by the November 7, 2023, and pay any VHT liability by the January 1, 2024.

It is anticipated that the new tax will result in annual receipts of €3-€4 million approximately for the exchequer.