While most people in the Republic support the introduction of a vacant homes tax, many believe the proposed rate is too low. That’s according to a survey by consumer group Taxback.com which tested public sentiment around the new measure.
The 0.3 per cent tax, introduced as part of Budget 2023, will be payable from January next year under a self-assessment system.
Taxback’s survey indicated that just over 50 per cent of respondents supported the Government’s vacant homes tax but that 70 per cent of these believed the rate “should be at least almost five times more than the 0.3 per cent it is currently set at”.
Almost three in 10 (28 per cent) said they were not in favour of the tax because of its implications for choice and autonomy, “with this cohort believing that property owners should be allowed to do as they wish with their homes”, Taxback said.
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Almost one in five (17 per cent) were against it because they did not believe it would solve anything.
About a quarter of those in favour of the tax said they believed it should be set at a rate of 5 per cent, one in five believed the rate should be 10 per cent, while one in seven said it should be 20 per cent. Ten per cent would like it to be more than 20 per cent.
Most of those in favour of the tax believe the levy will have a positive impact, the survey indicated.
“The 0.3 per cent rate at which the vacant homes tax is set has attracted much criticism of late, with some politicians recently describing it as ‘tokenistic’,” Marian Ryan, consumer tax manager of Taxback, said. “Our survey shows that even among those who support the tax, there is widespread dissatisfaction around the rate.
“The tax was introduced to increase the number of homes available for rent or purchase. Public sentiment appears to be that if the Government really believes that this new tax will increase housing supply and address the severe housing crisis in this country, it needs to increase this tax to a multiple of what it currently is,” Ms Ryan said.
Recent Revenue Commission data indicates there are just over 57,000 vacant properties in the Republic, with holiday homes accounting for about a fifth and another fifth comprising homes being refurbished.
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Properties that are vacant due to refurbishment will not be liable for the tax, while many holiday homes will not be liable for it either depending on how frequently they are used.
“If there are only 57,000 vacant properties in Ireland and a significant chunk of them are exempt from the vacant homes tax, questions must be asked about whether the tax is merited. If not, it could cost more to administer this tax than it actually collects,” Ms Ryan said.
Social Democrats leader Holly Cairns recently described the 0.3 per cent rate as “laughable” and “tokenistic”, insisting it was not designed to get empty homes back into use but instead to “maintain the status quo”.
Minister for Finance Michael McGrath said analysis of vacancy rates captured by local property tax returns were “low across all counties”, averaging nationally at 3 per cent “which is considered to be in line with a functional housing market”.
However, he said he would keep the operation of the vacant homes tax under review, including the rate of the tax.
