Sky News has been informed by the Irish government that they want to implement a vacant property tax as soon as possible.
The country has one the highest levels of vacant property in the developed world. However, the demand for housing is far greater than the supply. This creates a generation that is unable to own a home.
Darragh O’Brien the minister for housing stated that the long-promised tax aimed at encouraging the use of vacant property will be implemented “I expect” this year.
He said, “Once the data has been collated, which is something that myself and the minister of finance are working on… it’ll be as soon as you can.”
GeoDirectory data shows that there were over 112,000 empty or abandoned dwellings in Ireland during the quarter ended 2021.
There is however no consensus as to the exact number.
According to data from Ireland’s 2016 last census, the number was 183,000
This was also the number that Money.co.uk found in a study last years. It gave a vacancy ratio of 9.10% for total housing stock, the 10th highest worldwide. England was ranked 20th on the list.
Co Mayo in the west of Ireland is especially hard hit.
GeoDirectory reports that the county has the most derelict property in Ireland and the second highest rate of vacant properties. (Derelict is defined as a need for structural work before a building may be occupied again).
One town in Co Mayo was visited by us and serves as a microcosm of Ireland’s vacancy crisis.
Ballinrobe has just 2,800 residents. However, according to the Northern and Western Regional Assembly there are 199 vacant or decrepit buildings in the town. This is a rate where one empty building per 14 residents.
Ballinrobe does not have a single rental property.
Imelda Murphy is a native of the area and has been living in Illinois for over 20 years.
She longs to go home to her parents, who live in Ballinrobe. She can’t find a place to rent in the area.
She said, “It’s very frustrating.” “I am constantly on hold with estate agents and there is zero for Mayo.
“I don’t understand it. I don’t know if government is doing enough help. “I don’t know what I should think.”
Ms Murphy was standing outside her Cornmarket childhood home, which is now ironically one of nearly 200 vacant properties.
She said, “I was born in this house and raised there.” It wasn’t quite like the one we see now. But it was quite the Ballinrobe house. It was a wonderful home when I grew up there.”
Ms Murphy said that her dad and mum put so much effort into the garden that there was a fountain, garden chairs, and she looked at the brambles and overgrown grass.
Property Partners Emma Gill, local real estate agent, has just sold a row of four terraced homes across the street that had been abandoned for fifteen years.
Claire Glynn, associate director, says that the firm manages 150 rental properties. However, none of these are currently available.
She said, “Unfortunately, there are not any properties for rent in Ballinrobe at the moment.” “None whatsoever. We have huge demand. People are calling every day to rent their homes, and there isn’t enough supply.
The Irish government will provide grants up to EUR30,000 (PS25,000), for those who purchase derelict properties. It will also introduce a vacant property tax to penalize landlords who permit properties to remain vacant for prolonged periods.
Sky News’ Minister O’Brien said: “We wanted the data to be collated through my colleagues at the Department of Finance so that we can understand why vacant homes are occurring.
“So, if someone is in long-term residential care, I don’t want to tax them because their home has not been used.
“But there are many homes that are not being used. We will bring forward a tax for vacant properties this year. This is part of the carrot approach with the stick, which is the grant.
Minister said, “I understand the frustration completely.” “I am frustrated as a housing minister. But, we are going to do something.”
Sinn Fein is Ireland’s largest opposition party.
Eoin O Broin, the housing spokesperson for the government, responded that “it’s really frustrating to the rest of us that the government targets for tackling neglect are anaemic.”
He said that the tax was in the works for some time. My main concern is that it may only be announced in October for the next year’s levy, but it’s not clear if payment will occur in the following year. It could be that there is a 12–24 month lead-in before the levy is actually levied.
Although the government will not say how harsh the new tax is, it is understood that it could be based upon Local Property Tax (LPT), returns.
A person who has let their property sit vacant for a long time could face a 300-400% increase to their LPT.
O Broin stated that the new tax was necessary to encourage owners to use their empty properties again in a time of high property price inflation.
He said, “Leaving properties vacant during a housing crisis would be like hoarding food during a famine.”
Analysts doubt that a new tax on vacant properties will solve Ireland’s housing crisis.
It will be politically attractive, however. Similar taxes have been shown to increase rental supply in cities around the world.
A country with insufficient housing stock will continue to have tens of thousands more empty homes than it needs.