VHT applies to residential properties in use as a dwelling for less than 30 days in a 12-month chargeable period. VHT is a self-assessed tax, and it is the responsibility of the property owner to assess their liability and take the required actions.
The first chargeable period for the purposes of the VHT is the 12-month period from 1 November 2022 to 31 October 2023.
Properties within the Charge to VHT
The VHT applies for a chargeable period in which a property is both:
- A residential property for the purposes of Local Property Tax (LPT); and
- In use as a dwelling for less than 30 days in a 12-month chargeable period. A dwelling is a place where a person lives in or occupies the property normal living activities (i.e. eating, sleeping, relaxing, etc.).
Rate of VHT
The rate of VHT for a property is three times the basic rate of LPT (before any Local Adjustment Factor).
A 5% surcharge will apply where a VHT return is filed late. This increases to 10% where the return is filed more than 2 months late. In addition, a penalty may be applied where an incorrect return is filed or where there is a failure to file a return. Statutory interest at 0.0219% per day may also be applied on any unpaid VHT until the liability is discharged.
Who is Responsible?
The person responsible for filing of VHT returns and payment of the tax is the same person liable for LPT - i.e., is generally the owner of the property.
A designated person is responsible for submitting VHT returns and making payments on behalf of:
- All the owners, where a vacant residential property is owned by more than one person; or
- Companies, or other entities, that own vacant residential properties.
Where the chargeable person is a company, the return should be prepared and delivered by the company secretary.
Payment & Filing Obligations
A chargeable person is obliged to file a VHT return online on or before 7 November, following the end of the chargeable period if:
- There is a liability to VHT in the period covered by the return;
- There is a claim for one of the eight exemptions from VHT (covered below);
- Where Revenue issues a notice to a person directing that a return is required.
Any VHT liability must be paid, or an agreed payment arrangement entered into, online via ROS on or before 1 January immediately following the chargeable period (e.g. for the period 1 November 2022 to 31 October 2023, the tax must be paid by 1 January 2024).
VHT is not an allowable deduction from Income Tax, Corporation Tax, or Capital Gains Tax.
Exemptions from VHT
VHT does not apply for a chargeable period where the property was:
- Subject to a qualifying tenancy; or
- Exempt from LPT for the year in which the chargeable period ends.
There are also a number of specific exemptions from VHT that may be claimed on a VHT return. The qualifying conditions must be satisfied for the chargeable period for which that exemption is claimed. The legislation also requires a chargeable person who claims an exemption to retain documents to demonstrate that he or she was entitled to the benefit of the exemption for the chargeable period in respect of which it was claimed.
The eight specific scenarios where an exemption can be claimed are as follows:
- Property where the owner has died;
- Property where a Grant of Representation was issued;
- Property actively marketed for sale;
- Property actively marketed for rent;
- Property subject to certain Court Orders;
- Property that underwent structural works;
- Property unoccupied due to illness of the owner; and
- Property owned by a North-South implementation body.
A VHT return must be filed in order to claim one of the eight specific exemptions above.
How Can we Help?
It is imperative that residential property owners are aware of their obligations, as Revenue are currently establishing a register of vacant homes that will be continually updated.
Our team of property specialists can help you ensure that you are meeting your tax filing and payment obligations. For more information on the Vacant Homes Tax, or how BDO can assist you, please do not hesitate to contact a member of our Real Estate & Construction Team.