Minister for Finance Paschal Donohoe has said that a tax on vacant homes will not “change the game” in solving the housing crisis.
This is despite Fine Gael party leader Leo Varadkar backing the tax previously, telling his parliamentary party earlier this summer that there is a need to introduce the tax alongside other measures.
The Government plans to introduce a vacant homes tax next year in a bid to free up more properties and increase the supply of housing as part of the multi-billion Housing for All plan.
Minister Donohoe has said that the tax will not be the “single thing” that helps “change the game” in boosting housing supply.
“A vacant homes tax is not going to be of itself the single thing that will allow us to make progress on all of the challenges that we have with homes and housing at the moment, but it could be part of the answer,” he told reporters at Government buildings today.
However, Minister Donohoe said that the tax remains a “part of the plan”.
“I’ve always made the point that a vacant homes tax of itself is not going to be the reason why we are able to overcome all of the many housing difficulties and challenges that we have at the moment, but is part of the plan,” he said.
The tax is believed to be multiples of the Local Property Tax which will apply on vacant homes and apartments.
His comments come as the Irish Independent reports today that the tax would have a “very limited” impact on increasing the supply of housing, with some urban areas having very few empty homes, according to officials from the Department of Finance.
Minister Donohoe’s officials appear to cast doubt on the tax and the Minister has now himself admitted that it will not “change the game”.
“My officials in their own contribution to an Oireachtas Committee hearing later on in the week are just acknowledging that it could have an effect, but it is not going to be of itself a thing that will change the game in relation to housing and housing supply,” he added.
The tax was pitched as a key part of the Housing for All plan, which was launched several weeks ago, with the much-anticipated vacant homes tax missing.
However, Government has vowed to bring it in next year instead, after information about the number of vacant homes and their location is retrieved from the reformed Local Property Tax.
Minister Donohoe said that this data will come in November.