Tuesday, 02 January 2024.

As our Home Truths paper, Vacant Homes in Cork highlights, the number of vacant homes, especially long-term vacant homes, has the potential to make a positive impact on much needed housing supply were they to be brought back into use. Incentivising their return to the market varies from country to country, with some notable successes.

The Vacant Homes Tax (VHT) was introduced here in Ireland in 2022 with the aim of increasing housing supply for sale or rent by encouraging the return of unoccupied, liveable homes to the market. There are a number of exemptions to the tax, including if the property has been lived in for at least 30 days in the preceding 12-months.

Just over a month ago the Department of Finance published preliminary figures on returns for the first 12-month chargeable period of the VHT: 01 November 2022 to 31 October 2023.

They report following the end of this first chargeable period that “over 50,000 properties have been recorded through Revenue’s VHT portal, with approximately 5,000 properties declared as vacant and 45,000 as occupied”.

Among 50,000 homes, it turns out that according to the conditions of the tax, only 10% are deemed vacant and liable for the tax; the remaining 90%, reported occupied for at least 30 days during the 12-month chargeable period, are exempt.

Occupancy of only 30 days is very low in comparison to vacant homes tax conditions applied in other countries. In Ireland, a home can lie vacant for 11 months before it comes within the scope of the tax. In Melbourne and in Amsterdam, the time limit is six months. In Denmark, it’s just six weeks.

Ireland’s condition of occupancy appears far too low to have any real impact on housing supply, allowing the vast majority of homes to slip through and for empty homes in the midst of a housing crisis to remain a part of the Irish landscape.

Incidentally, of the approximately 5,000 homes deemed vacant, almost 2,000 were exempt from the VHT on grounds other than the condition of occupancy, leaving only 3,000 out of a potential 50,000 homes - 6% - liable for the tax.

Our Home Truths series aims to offer insights into different aspects and experiences of homelessness in the Southwest, drawing on publicly available data and supported by the personal experiences of Cork Simon service users.