I recently received a letter from Revenue advising me that a house I own could be subject to the Vacant Homes Tax (VHT). My mother left me the house in her will, but it was subject to a right of residence in favour of my brother, who is a bachelor. His health declined a couple of years ago and he has been living in a nursing home with the result that nobody is currently living in the house. Am I liable to pay this tax?

From June 2022 to June 2023 inclusive, Revenue used data from ESB electricity readings to identify 115,000 properties meeting the definition of vacant.

Revenue wrote to the owners of 25,000 properties who may be subject to the Vacant Homes Tax. They may also contact further property owners at a later date following further data analysis.

You may be liable for the VHT if you own a residential property for local property tax (LPT) and it was in use as a dwelling for less than 30 days in the 12 month chargeable period

  • Even if you believe VHT does not apply, Revenue may still write asking you to confirm the status of the property, i.e. is it occupied or sold, or subject to a qualifying tenancy?
  • Rates of Vacant Homes Tax

    The first chargeable period for VHT is 1 November 2022 to 31 October 2023. It is an annual tax that will apply on 1 November each year. The rate will be three times the basic LPT payable on the property for the year in which the chargeable period ends.

    It was announced in Budget 2024 that the rate of VHT will increase to five times the basic rate of LPT for the chargeable period 1 November 2023 to 31 October 2024.

    If your property is liable for VHT, you were obliged to make a return by 7 November, 2023. Furthermore, if the return is late, there is a 5% surcharge, which increases to 10% if it is over two months late.

    Check if property is residential property

    VHT applies to properties that are residential properties for LPT. A residential property is liable for LPT, if on 1 November each year, it is:

  • Occupied as a dwelling, even if it is in bad condition
  • Not occupied but is suitable for use as a dwelling
  • Vacant properties not subject to VHT and exempt properties

    VHT will not apply, nor are you required to make a return, if the property was or is:

  • Sold in the chargeable period
  • Subject to a qualifying tenancy (rented for at least 30 days to a registered tenant not related or connected to the owner)
  • Unoccupied for an extended period due to owner illness

  • Purchased, adapted or built for use by incapacitated persons
  • Constructed using defective concrete blocks
  • Certified as having pyritic damage
  • Fully subject to commercial rates
  • Owned by a charity or public body registered nursing homes
  • .

    Further exceptions apply where:

  • The owner has died
  • A grant of representation was issued
  • The property is actively marketed for sale or rent
  • It is subject to certain court orders
  • It is unoccupied due to illness of the owner
  • Exempt from LPT
  • The property has undergone structural works
  • In order to be deemed excempt, you are obliged to keep records relating to the use of a residential property and evidence relating to the property being outside the scope of VHT.

    The chargeable person for VHT is the same as the liable person for LPT purposes. This is normally the owner but if a person has an exclusive right to reside in the property, then they become the chargeable owner.

    Can you avail of an exemption?

    In your situation, let’s look at the exemption from LPT for properties unoccupied for an extended period due to the illness of the owner.

    According to the Revenue, in order to qualify, the following conditions must be met:

  • The property must be the sole or main residence of the liable person
  • A long-term mental or physical infirmity must be independently verified and certified by a doctor
  • The property should remain vacant and not occupied by another liable person
  • However, if a person has a right to reside in the property for life, or for 20 years or more and a right to reside in the property to the exclusion of all others (i.e. an exclusive right of residence as opposed to a general right of residence), that person is the liable person for LPT and VHT.

    Consequently, if that person with an exclusive right of residence has to move out because of long-term mental or physical infirmity, they may be able to avail of the exemption. If they have a general right of residence, you may not be able to avail of the exemption as you continue to be the liable person.

    In summary, if your brother was the liable person for LPT, you should be able to avail of an exemption. If you have paid the LPT but are unsure whether you were the liable person, you should check the title of the property to establish whether your brother has a registered right of residence and if so whether that is a general right of residence or an exclusive right of residence.

    This should be obvious from the burdens registered on the folio, or your solicitor may be able to take up a copy of the dealing (instrument) to determine which type of right of residence applies. If it’s an exclusive right, you should be able to avail of the exemption.

    Disclaimer: The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information contained in this article, Aisling Meehan, Agricultural Solicitors does not accept responsibility for errors or omissions howsoever arising. Email: ameehan@farmersjournal.ie