Why the Government’s vacant homes tax is a missed opportunity

There are tens of thousands of vacant homes in Ireland in the middle of a housing crisis, but the new tax is unlikely to push owners to make them available for purchase or rental. Photo: Shutterstock

A number of housing measures were introduced this week in Budget 2023 aimed at increasing the supply of residential properties for purchase or rent to meet demand. One such measure is the Vacant Homes Tax (VHT).

Taxes generally have two different purposes: one is to raise revenue and one is to change the behaviour of the taxpayer. In this case, it is the latter: the tax is clearly not a revenue-generating measure (as the estimated yield is in the region of only €3-4 million), but an attempt to incentivise (or penalise!) owners of vacant properties in a market where there is insufficient supply. Continue reading…