Thousands of owners of vacant homes about to get Revenue tax demand

The tax authority is expected to write to around 25,000 owners of unoccupied homes initially.

A self-assessed tax, it will be charged at a rate of three times the Local Property Tax (LPT).

And the property tax will still have to be paid.

This means a house valued at €300,000 for the property tax would attract a vacant home tax of €945 if unoccupied, plus property tax of €315.

This would take the total to €1,260.

The Revenue Online Service (ROS), used mainly by the self-employed, companies and PAYE workers who need to declare untaxed income, has a special portal for people to file a return and pay the tax.

Any home that has been empty since last November 1 will be subject to the tax if it was used as a dwelling for less than 30 days between then and the end of next month.

The new self-assessed tax will be due for payment before next January.

The tax was announced in Budget 2023 with the aim of increasing the supply of homes for rent or purchase by encouraging the owners of vacant residential properties to bring them back into use.

The first chargeable period runs from November 1 last year to October 31 this year with self-assessed returns due by November 7.

The tax is payable on January 1 next year.

The 2022 Census indicated a vacancy rate of 163,000 of the total 2.1m housing units in the country.

However, it is likely that a majority of these will not actually fall within the scope of the tax due to various exemptions.

These include cases where the property is actively marketed for sale, subject to probate, currently been renovated or in the case of a rental properties, between lets.

Where a property is vacant due to the extended hospitalisation of the owner, an exemption will also apply.

Sources indicate that when these categories are taken in to account approximately 62,000 units could fall within the tax.

It will not apply to derelict or uninhabitable properties.

The legislation underpinning the tax sets out a strict compliance regime, providing or the exchange of information between Revenue and bodies such as county councils which are required to maintain a register of vacant properties.

Marian Ryan, the consumer tax manager at Taxback.com, said the new tax was being introduced to increase the number of homes available to rent or buy, and might yield as little as €3m in a year.

Finance Minister Michael McGrath told Sinn Féin’s Pearse Doherty in a Dáil reply recently: “The estimated yield is low, as I anticipate this tax will influence behaviour and lead to property owners putting their vacant properties to more effective use.”

A survey conducted by Taxback.com on the vacant home tax in May revealed mixed views.

The research found 40pc of homeowners support the tax and think it will have a positive impact, while 15pc think it is a good idea, but should be levied at a high rate.

Just over a quarter of those questioned said they are not in favour of the tax as people should be allowed to do what they want with their properties.

Ms Ryan said figures from Revenue suggest there are just around 60,000 vacant properties in Ireland.

Holiday homes account for about a fifth of these, and another fifth are being refurbished.

Ms Ryan added that properties that are vacant due to refurbishment are not liable for the new tax, and many holiday homes will be exempt too, depending on how often they are used.

To claim an exemption, a property owner must make a tax return for the vacant homes tax.