The Government is set to introduce a new Derelict Property Tax across 107 cities and towns, according to Tánaiste and Minister for Finance Simon Harris. The measure, which will be included in the upcoming Finance Bill, aims to bring long-term vacant buildings back into residential use by replacing the existing 7% derelict site levy with a new tax rate that will not be lower than the current charge.
At the end of 2025, official estimates indicated there were approximately 19,438 residential derelict properties across the State.
How the tax will be implemented
The tax will be rolled out in two phases, starting with urban areas that have populations of 4,000 or more. This initial phase covers major cities including Dublin, Cork, Limerick, and Galway, alongside towns such as Drogheda, Dundalk, Navan, Sligo, and Roscommon. A second phase will subsequently expand the measure to 64 additional towns with populations of 2,000 or more, bringing the total number of affected locations to 171.
Revenue will be responsible for administering the tax, while local authorities will continue to manage derelict property registers. These local bodies are tasked with identifying which specific properties meet the criteria for the levy.
What happens next
Officials are currently working on the detailed design of the scheme, which is expected to include specific exemptions, appeals mechanisms, and arrangements for verifying ownership. These elements will be finalized ahead of the formal introduction of legislation later this year.
The shift from the existing 7% levy to this new tax structure signals a move toward a more centralized enforcement model. By prioritizing the restoration of homes over mere revenue collection, the Government is attempting to address the stock of nearly 20,000 residential derelict properties, though the success of this strategy will ultimately depend on the efficacy of the appeals and exemption processes currently under development.
Why the measure is being introduced
Minister Harris stated that the primary objective of the new tax is to support the revitalization of communities. He emphasized that the success of the policy will be measured by the number of properties restored and new homes created, rather than the total amount of tax collected.
Frequently Asked Questions
Which towns are included in the first phase?
The tax will initially apply to areas with populations of 4,000 or more, including Dublin, Cork, Limerick, Galway, Drogheda, Dundalk, Navan, Sligo, and Roscommon.
Will the new tax rate be cheaper than the current levy?
No, the new tax will replace the current 7% derelict site levy and the rate will not be lower than that figure.
Who is responsible for identifying derelict properties?
Local authorities will maintain the derelict property registers and identify which specific properties meet the criteria for the tax.
How do you believe this tax will affect the availability of housing in your local community?
