Vacant Property Tax and Holiday Homes

No government ministers on here so your guess is as good as ours.

I suspect that holiday homes built with holiday home tax designation will be automatically exempt. The issue is with other homes. It's a case of wait and see for now.

I think it unlikely holiday homes would be included if there were to be a tax on vacant property. For one, there would be many a senior civil servant and politician caught in such a net, so the civil service wouldn't be putting it forward as a suggestion, or would 'yes minister' it off the agenda in the unlikely event a minister came up with a semi-original idea. It would only swell government coffers while having no impact on housing availability in Dublin.

Perhaps a partial or full tax exemption on any gains on the sale of the house would have a better take up on freeing up these houses back to the market. A €1000 a year or similar property tax is unlikely to see any mass sell off.

It would be counter productive imo. Holiday home owners tend to bring a lot of money into an area rather than taking it out of the country like the thousands who own places in Spain/Portugal/France etc.

How would that work - would the property need to be continuously vacant for a certain number of years? Like, a holiday home is not vacant if its used by the family regularly for weekends or summer holidays or an elderly persons home may be temporarily unoccupied while they're in a nursing home, but its not vacant. Taxing that would be just wrong. Also a residential property is not vacant if the owner is refurbishing it to rent it or in the middle of selling, it cant be occupied in those circumstances.

What is an owner of a commercial premises supposed to do if they cant rent or sell in these covid times? Just hitting them with more taxes when they have zero income because of government rules wont help the housing situation.

Easy soundbites for some politicians to make as if it will solve the housing crisis but every new rule has consequences and some just make things worse.

Cost. Supermarket vs convenience store

There are villages in Donegal, Louth, Wicklow, Wexford with hundreds of holiday homes and static caravans who don't see a cent spent by the owners.

Couple of issues:

The phenomenon of people relocating to rural areas will tend to put upward pressure on property prices/values in rural areas, but of course it will equally relieve pressure on prices/value in urban areas. And that might be of benefit to those who have jobs that can't be done remotely, who need to live in urban areas.

In general, the rationale for a tax on assets (like land or buildings) is to provide an incentive to use the asset productively, so that you can generate an income from it to pay the tax. The thinking here is that it's better for the community at large that assets be used productively rather than being left idle or vacant. And this rationale is stronger, obviously, if the assets in question are in short supply, like housing is right now. As you point out, there is already a property tax, but if there are a significant number of under-used or vacant properties, the obviously conclusion is that it's not high enough to incentivise productive use. You can address that either by raising property taxes generally, or by raising them specifically on vacant or under-used properties.

It's worth pointing out that you can have a holiday home and also use it productively by listing it on Air BnB or similar. Just block out the weeks/weekends that you want to use the place yourself. Your property won't then be vacant; it'll be actively used in your tourist micro-business. And it'll generate local activity and income as you, e.g., engage locals to clean it and deal with the laundry between visits. What's not to like?

Planning laws have/are being used like that in places. But there is no law that stops citizens from well paid jobs in cities or from abroad, buying up property for use as holiday homes. And if there can't be such a law, then tax is an alternative solution. As things stand, those wishing to live year round and work in such areas will generally have lower and sometimes part time incomes and simply can't compete with the offers made by those from urban based well paid careers. That is one of the factors that is leading to rural depopulation in scenic, partic coastal areas. That and a consequent steady shrinkage of public services.

There's a sort of Green ideology behind this, with majority of citizens living in urban areas. Renting a car for their breaks every now & then to visit scenic parts of rural Ireland. Other less scenic areas to be populated with wind farms to feed the cities etc. Only problem with this, is that the local culture that people expect on their holiday visits will have been destroyed.

The table has been tilted so hard in favour of locals only the EU have rightly taken notice and given the government a 'please explain'. Has this long standing policy - forget covid a WFH as that is irrelevant - seen locals more able to build and fund properties? Given the obvious current shortages and lack of almost any rural or village construction activity for over a decade, I think I can answer that question, and it's a big fat NO. It's an economic nonsensense that severly limiting supply reduces prices.

As for such properties being bought - that is only possible if the locals who are the only ones allowed to build them, didn't want or need them and sold them. This wealthy investors depriving locals argument shoots itself in the foot.

How long should any owner be allowed to sit on their own property? How would a system handle the delays in planning permission decisions - would that allow an exemption from a vacancy tax? Then if PP is received, would it be exempt while building work is ongoing? Would it be exempt while its for sale? Ive heard some sales can take up to a year before everything is finally signed. Sales can fall through by no fault of the seller. Would they be exempt?

We had a field near our house that was sold to a developer. It took them years to get PP & before they started building, the crash happened. They went bust & the receivers put the site up for sale. It took years to sell & the PP had expired so the new owners had to apply again. That took a few more years & eventually houses were built and they were very expensive. It took another few years before they all sold. Any vacancy tax on that development would probably have increased the house price for buyers, not reduced it.

Meddling in the housing market could have unintended consequences & how a vacancy tax is supposed to fix it or reduce the price of a house is a mystery.

Edit.. Developers dont get free money to build so any extra cost to them will be passed on to buyers.

I think it could get worse than that.

A spare bedroom tax will be next.

So you have a bedroom or two you are not utilizing to their full potential.

Rent them out, or we will slap a tax on it for you.

No more young couples buying 3 and 4 bed houses in case their family gets bigger.

You buy only what you need at this present time or .... tax.

How did the powers that be swing that the last few years they have people crying out to tax people more?

Usually other people it has top be said, but this asking for taxation is just wrong.

read recently that all airbnb 's will need a licence soon & rtb will manage short term lettings...lol, visitors will be able to stay for years..

https://www.irishtimes.com/business/new-restrictions-likely-to-reduce-supply-of-short-term-rental-property-1.4653404letting

I have yet to meet or hear of a senior civil servant who has a holiday home. In fact I have yet to meet or hear of one with a house bigger than a 4 bed semi!

Owning a holiday home may be feasible on their salaries but may not be a good use of money. In my experience civil servants keep their surplus money invested in productive assets. I know a former civil servant who bought an apartment in Dublin from which she gets €1,900 a month rent and then rents a house in a holiday resort during the summer. Owning a good suit is feasible on their salaries but they usually look as if they are wearing the cheapest of chain store clothes.