Vacant Homes Tax
A Vacant Homes Tax was introduced by Section 96 of the Finance Act 2022 and is an annual tax that applies to residential properties in use for less than 30 days in the 12-month chargeable period, namely the 1st of November until the 31st of October. The objective of the tax is to increase the supply of residential properties available for sale or rent.
Who falls under the scope?
You are liable for this tax if you own a residential property that is not occupied for the minimum required period. It is recommended that you keep a record of the use of any relevant property. The tax is charged at three times the basic rate of LPT. However, the VHT will not apply if the property was sold in the chargeable period. Holiday homes can also be subject to VHT which is why it is imperative to retain documents such as electricity bills as proof that the property was occupied.
Vacant Homes Tax is a self-assessed tax, but the revenue may still ask for the property owner to confirm the status of their property or submit a VHT return. During the process of submitting your return you must provide evidence that your property has been occupied, sold or subject to a qualifying tenancy.
Exemptions to the tax
You may be exempt from the Vacant Homes Tax if your property is actively listed for sale, rent or has been sold during the 12-month chargeable period. Vacant Homes Tax does not apply to properties that are vacant due to the illness or death of the owner. If a property is subject to a court order, then it is also exempt. You are not liable for VHT if your property has ongoing structural work being carried out. In addition, if your property is exempt from LPT then you are automatically exempt from VHT.
Notwithstanding the above exemptions, you can apply for an exemption if the ownership of the property has changed during the chargeable period or if the property was subject to a tenancy and was registered with the Residential Tenancies Board.
Failure to comply with VHT.
Failure to file your VHT return within two months of the due date will result in a surcharge of 5% of the VHT payable. The surcharge increases to 10% any time after two months of the due date. In the event where no return has been filed the 10% surcharge will apply along with penalties subject to interest.
For more information on this or any property related matter please contact Pauline Horkan, SallyAnn McCoy or Donna Phelan on 01 2960666
