Taxation and vacant properties
Sir, – Within the Indecon report commissioned by the Government on the examination of approaches to tackle vacant properties (News, September 19th), in relation to international responses to the implementation of vacant property tax measures, the report indicates that “a number of countries have recently introduced such a tax but it is not feasible as yet to derive any overall conclusions on their effectiveness.”
While in the case of Vancouver it is true that the effectiveness of its “Empty Homes Tax” measures could only be assessed towards the end of this year, the report could have mentioned the precedent of France where a similar measure has been in effect since 1999.
An analysis undertaken entitled “Taxing Vacant Dwellings: Can Fiscal Policy Reduce Vacancy?” authored by Mariona Segu (UniversitéParis-Sud) and Benjamin Vignolles (Paris School of Economics) in relation to the French vacant property tax implementation outlined that “results suggest that the tax was responsible of a 13 per cent decrease in vacancy rates between 1997 and 2001. This impact is twice as high for municipalities with an initially high level of vacancy.”
The Indecon report indicates in the main that a very high vacant property tax rate would be required for effectiveness in terms of increasing supply but the above assessment has been made even before the latest decision taken last year by the relevant local authorities in Paris to triple the vacant property tax which would be expected to add to the potency of the measure further.
While the Indecon report may be correct to indicate that enhanced compulsory purchase order measures for established vacant properties due not to illness or long-term care may be more direct, the proven effectiveness of a vacant homes tax in increasing supply remains an ordinance that remains worthy of consideration by the Minister for Finance on its own merits, notwithstanding the report’s conclusion. – Yours, etc,
Cllr JOHN KENNEDY,
Rathdown County Council,
Dun Laoghaire, Co Dublin.