Vacancy and Dereliction in Ireland

According to the Census 2022, there were 163,433 (excluding holiday homes) vacant properties on Census night 2022. Approximately 30 per cent of vacant properties enumerated in 2022 were also vacant in 2016 (48,000), while nearly half of those (23,072) were also vacant on Census night 2011.

While the overall figure represents a decrease in vacancy when compared to Census 2016, when the preliminary figures for each county are compared to the county breakdown of the Social Housing Needs Assessment 2022 there remains more vacant properties than households in need in every county, assuming the figures produced in the Summary of Housing Needs Assessment 2022 are correct. Reasons for vacancy are varied, however of the 163,433, more than 20 per cent (33,653) were rental properties, 27,213 were due to the death of the owner, and 23,205 were being renovated [1].

It should be noted that the GeoDirectory Residential Buildings Report puts the number of vacant units at 81,449, with highest rates in Leitrim, Mayo and Roscommon. That same report indicates that there were 20,780 derelict properties across the country in December 2023. The highest proportion was in Mayo, followed by Donegal and Galway. The lowest rates of dereliction are in Wicklow and Carlow.

So, there is anywhere from 102,000 to 164,000 vacant and derelict properties across the country that could be brought into use.

In early 2017, the Government introduced the Repair and Leasing Scheme, allowing owners of vacant properties to access funding of up to €40,000, which was later increased to €80,000 in 2023. The scheme aimed to repair these properties, which would then be leased to the local authority for use as social housing for a term of between five and 25 years. However, the target to bring back properties into use from 2022 to 2026 under Housing for All was drastically reduced to 660, from the 3,500 target set out in Rebuilding Ireland Strategy. The latest data from the Department indicates that of the 3,116 applications made by Q3 2023, just 278 leases were signed in respect of 520 properties, indicating low success rate. Furthermore, the Vacant Property Refurbishment Grant, launched in 2022 to fund refurbishing vacant and derelict properties, offers grants of up to €50,000 for vacant properties and up to €70,000 for derelict ones. However, of the 6,034 applications received by December 2023, only 100 grants were issued. This is clearly not working. A study by the Society of Chartered Surveyors Ireland revealed that renovating vacant and derelict properties is unattractive to many aspiring owner-occupiers and investors due to financial viability.[2]

The Vacant Homes Action Plan 2023-2026 was published in January 2023 which restates the policies set out in the Housing for All Strategy, the Rebuilding Ireland Strategy, Our Rural Future, and Town Centre First. Budget 2023 introduced a Vacant Homes Tax (VHT) on residential properties which are occupied as a dwelling for less than 30 days in a 12-month period. This tax was further increased from three times to five times the basic Local Property Tax rate in Budget 2024, which is welcomed. However, challenges arise due to the difficulty in identifying vacant properties and the lack of enforcement capacity within Local Authorities, making the collection of this tax difficult.

Preliminary figures published by the Department of Finance indicate that, as of 20th November 2023, more than 50,000 properties have been reported through Revenue’s VHT portal, with approximately 5,000 declared as vacant. Among these, approximately 2,000 properties have claimed an exemption from the tax, consequently leaving around 3,000 properties with a liability to pay VHT. These property owners are required to confirm whether they remain liable to pay the tax. Enforcing compliance with the VHT poses challenges, as it relies on property owners to voluntarily self-assess their liability and submit returns. This reliance on self-assessment can make it difficult for authorities to ensure full compliance, presenting obstacles to effectively address vacant properties.

Address Vacancy and Dereliction

There are between 102,000 to 164,000 vacant and derelict properties across Ireland. In order to tackle this issue, we must first be able to quantify it with some accuracy. We need new ways of mapping vacant dwellings, such as that piloted in Wallonia, using utility connections and activity. Vacancy and dereliction should be dealt with together as one can very quickly become the other. Replacing the current vacancy taxes with a Site Value Tax would offer a better solution as it is applicable immediately to all sites, zoned or otherwise, and could generate revenue straight away. This would also simplify the land tax system. While we welcome the initiative to increase the Vacant Homes Tax, we encourage the Government to reduce this time period to six-months in Budget 2025 and to further increase the rate to ten times the annual LPT level. Addressing challenges in implementation and ensuring full compliance is crucial.

Refining taxation policies concerning the underdeveloped land suited for housing is paramount. The introduction of the Vacant Site Levy in 2019, set at 7 per cent per annum of the commercial value of the property and paid in arrears to Local Authorities is welcomed. However, it was a concern that many local authorities struggled to implement vacant sites register, with landowners attempting to avoid inclusion. In addition, the change to a Residential Zoned Land Tax, announced in Budget 2024 at 3 per cent of the land’s value per annum and collected by the Revenue Commissioners, aims to address inefficiencies related to underutilised land amidst the housing crisis. While we welcome this, we believe the tax should be higher, ideally at 5 per cent of the annual value. Additionally, to tackle hoarding, the Government should increase resources to Local Authorities for enforcing the Derelict Site Levy. Authorities should be allowed to apply for judgement mortgages to enforce unpaid sums, potentially leading to possession. The Derelict Site Levy must be clearly defined and set at a substantially higher rate than the current 7 per cent. Finally, we propose the use of Compulsory Sale Orders (CSOs) alongside Compulsory Purchase Orders (CPOs) to compel the sale of vacant and derelict sites. CSOs were proposed by the Scottish Land Commission in their proposal to Government in 2018 and compel the owner of a property or site to sell it at open auction to the highest bidder. This is more cost effective for the Local Authority as it requires administration, rather than full purchase, costs.

[1] https://www.cso.ie/en/releasesandpublications/ep/p-cpsr/censusofpopulat…

[2] The property’s financial viability is calculated by determining whether the final market value is greater than the starting market value plus the renovation costs.