New derelict property tax introduced in Budget

THE Derelict Property Tax was introduced in Budget 2027 and will take effect from next year.

It replaces the derelict sites levy which has been in effect from 1990 and is one way which the government aims to “encourage activation of derelict properties” during the current housing crisis.

It works by penalising owners of neglected or ruinous properties to force them to fix or sell them on the open market.

Owners must now pay an annual levy equal to seven per cent of the market value of the property (which the Minister can raise up to one per cent).

The person who owns the property on the date the levy is assessed is legally responsible.

If you buy a derelict property, any unpaid past levies must be cleared by the seller before the sale closes.

Unpaid local levies incur a monthly interest rate of 1.25 per cent and attach as a charge against the property, which means it cannot be sold or bought while the charge remains outstanding.

Owners have 28 days from receiving a notice to appeal a site's inclusion on the register or its market valuation to the Valuation Tribunal.

REGISTER

By law under the Derelict Sites Act 1990, every local city and county council must maintain a derelict sites register. The derelict sites register defines a derelict site as “any land that has not been properly managed and ruins the look of the surrounding area due to ruined or dangerous buildings, neglected land or structures, a build-up of litter or waste.

“Derelict properties make the surrounding area seem neglected, are a magnet for antisocial behaviour and are a waste of valuable housing,” the register states.

As of August 2026, Cavan County Council had 117 derelict properties on its registers and, in January this year, Monaghan County Council had 125 such properties logged.

The seven per cent levy is based on the market value of the derelict property and will now be collected by Revenue Commissioners instead of individual local authorities.

While introduced in this month’s budget, legislation is scheduled through the Finance Bill, with local authorities publishing preliminary derelict property registers in 2027.

The first payments under the new Revenue-managed system are not due until June 2028.

Until the new DPT is fully rolled out by Revenue, the existing Derelict Sites Levy continues to be demanded and collected directly by your local county or city council.