Important information about Vacant Homes Tax
Vacant Homes Tax (VHT) is a self-assessed tax introduced in the Finance Act 2022. The key objective of the tax is to increase the supply of homes available for rent or purchase, by encouraging the owners of vacant residential properties to bring those properties back into use.
VHT will only apply to properties which are residential properties for the purposes of Local Property Tax (LPT) and have been used as a dwelling for less than 30 days in a chargeable period. VHT will not therefore apply to:
- derelict or uninhabitable properties
- residential properties which were inhabited for 30 days or more in the relevant chargeable period
- residential properties which were sold or subject to a qualifying tenancy during the relevant chargeable period.
The first chargeable period for VHT is 1 November 2022 to 31 October 2023. Those who own a vacant residential property which does not fall within one of the above exclusions are required to confirm if their property is liable to the tax as soon as possible, and by 7 November 2023 at the latest.
During the confirmation process, property owners will have the option to claim an exemption from VHT, where applicable. These exemptions are available to ensure that property owners are not excessively penalised for normal temporary vacancy. It is important that owners with properties which do not fall within any of the above exclusions, but may still be otherwise exempt from the tax, file a return in order to meet their VHT obligations and claim their exemption.
As a self-assessed tax, property owners are responsible for determining whether they have a liability to VHT for a chargeable period and satisfying their pay and file obligations. To assist property owners in understanding their obligations in respect of VHT, Revenue has published comprehensive guidance on its website, and in Tax and Duty Manual Part 22B-01-01.
Revenue is also writing to the owners of approximately 25,000 properties to advise them of the actions they need to take. This correspondence will issue in the coming days and a sample of the letter can be accessed below. The letter is being issued where the data available to Revenue indicates that the recipient may have a liability to VHT.
Not all property owners who will be liable to VHT will receive a letter from Revenue, so it is important that property owners determine whether they have a liability to VHT, regardless of whether they receive a letter from Revenue. If a property owner has a liability to VHT but does not receive a letter, they are still obliged to file a VHT return and complete their self-assessment obligations. If a property owner receives this letter, they are required to confirm the status of their property. This is the case even if their property does not meet the relevant conditions for the tax to apply. Revenue will use the information provided to update its VHT register.
A report detailing the basis on which Revenue identified a subset of those who may potentially have a liability to VHT can also be accessed below.
VHT is set at a rate equal to three times the property’s standard LPT rate, that is, the LPT rate for the relevant band before any Local Authority Adjustment factor. The amount is calculated by the Revenue system when a return is submitted. All VHT requirements are in addition to any LPT requirements which apply to a property.
There are a range of options available to pay VHT, including:
- spreading the payments over 2024 by monthly direct debit
- paying in full through an Annual Debit Instruction (ADI)
- paying in full by credit or debit card.
If paying by monthly direct debit, property owners should instruct Revenue by 1 January 2024. Monthly direct debit payments will then be deducted each month from 15 January 2024 to 15 December 2024, and ADI payments will be taken on 21 March 2024 unless the property owner elects for an earlier date. Payment by personal credit or debit card will be processed on the day the payment details are provided.