Invitation to Make a Submission to Public Consultation on Review of Issues re Possible Introduction of a Vacant Property Tax

Mr. Paschal Donohoe T.D., Minister for Finance and Public Expenditure and Reform, has appointed Indecon international economic consultants to undertake an independent review of issues relating to a tax on vacant residential property and to inform government policy in this area. 

Background

Section 86 of Finance Act 2017 provides that:

The Minister for Finance shall, not later than 9 months after the passing of this Act, prepare and lay before Dáil Éireann a report on the issues relating to making provision in law for a tax on vacant residential property, the administration and implementation of such a tax, the availability of reliable baseline data and the estimated annual revenue from such a tax.”

The objective of a vacant property tax would be to increase the supply of homes for rent or purchase to meet demand rather than increasing tax revenues. In that context it is important that there is a sound understanding of the quantity, locations and characteristics of long term vacant dwellings, and the reasons why they are currently vacant.

Submissions

Interested parties are invited to make written submissions regarding the following issues.  In summary, the key issues include:

Rationale for this form of taxation

– Discussion of the likely behavioural response to the tax, based on theoretical and empirical investigation

– Identification of the types of vacant residential property, reasons why they are vacant and length of vacancy

– At what rate should such tax be levied, to provide the stimulus necessary to bring vacant properties back into use?

Available baseline data to determine the tax base.

– What are the appropriate data sources for creating a database for vacant residential property?

– How could an accurate register of vacant properties be effectively maintained? 

Administrative requirements for the implementation and operation of such a tax.

– What criteria should be used to identify vacant properties for such a tax and how such a register be maintained?

– The long-term viability of any revenues collected by such a tax

– Whether the revenue collected is likely to cover administration costs of implementation

– Any other considerations for placing a charge on vacant residential property.

Alternative options and other dimensions.

– Are there other policy tools better suited to addressing vacant properties?

– How might the proposed measure interact with other aspects of the tax code and current incentives?

– Are there any opportunity costs or unintended consequences that may need to be considered?

– What is the appropriateness or otherwise of the proposed measure?

– What vacant property taxes currently operate in other jurisdictions?

– Assessment of the relevance, the cost, the impact and the efficiency of any proposed tax on vacant properties.

– Are there any other factors that may constrain the implementation of any such a tax?

– Would the proposed tax effectively and efficiently deliver the policy objective of bringing vacant residential property into use in order to add to the supply of residential properties in areas where there are the greatest pressures?

– Will the amount of vacant properties remain at current levels, or is the issue likely to be resolved through other market measures and incentives?

– Are there any anti-avoidance rules that would be necessary should the tax be implemented?

– Any other areas/aspects that may require further consideration?  

Interested parties are invited to make submissions by email or post on the above matter to the Department of Finance and to Indecon at the contacts below. All submissions to be received by 29 June 2018.

Brian O’Connell

Senior Economic Consultant

E-mail:  boconnell@indecon.ie or by post to:

 

Indecon International Economic Consultants

Indecon House

4 Fitzwilliam Place

Dublin 2

Matt Jones

Department of Finance

Email: Matt.Jones@finance.gov.ie or by post to:

 

Tax Policy Division

Department of Finance

Government Buildings

Upper Merrion Street

Dublin 2

 

When responding, please indicate whether you are contributing to the consultation process as a professional adviser, representative body, corporate body or member of the public.

 

Freedom of Information

Responses to this consultation are subject to the provisions of the Freedom of Information Acts. Parties should also note that responses to the consultation may be published on the website of the Department of Finance.