Property and construction

A new tax on derelict property

The Bill introduces a new Derelict Property Tax intended to replace the existing Derelict Sites Levy, which had been criticised as largely ineffective. Importantly, this tax is to be administered by Revenue and will be applied to properties identified as derelict by local authorities.

A property may be regarded as derelict where it is located in a specified geographic area, determined by population size, and it is not in use as, and is not suitable for use as a dwelling, a business premises or for certain specified community, infrastructure or recreational purposes.

Unsuitable for use

The Bill specifies a non-exhaustive list of circumstances in which a property will be considered unsuitable for use, including where it has been boarded or blocked up, has significant roof or façade deterioration, has lost an elevation or is no longer weatherproof. Certain national monuments and registered historic monuments are excluded.

The Bill also provides for an exemption in certain cases where a property is affected by defective concrete blocks.

Rate of tax

The proposed rate is 7% of the market value of the property, self-assessed by the liable person. The first valuation date is 1 March of the year in which the tax first applies to the liable person in respect of the derelict property, with a new valuation applying for each successive three-year period.

The charge may cease to apply where remediation works are carried out, and derelict structures are demolished and cleared. Limited deferrals are proposed where remediation, certain court orders, appeals or judicial reviews are under way, and for a limited period after an unconnected acquisition of a derelict property.

Timetable compared to RZLT

Several features (including the definitions of owner, liable person and market value) closely resemble the Residential Zoned Land Tax (RZLT). However, the timetables differ. In the first annual cycle, the principal Derelict Property Tax milestones are:

• 1 January to 1 March 2027: Submissions can be made by any person to local authorities regarding whether a property is a derelict property.
• 1 January to 31 August 2027: Local authorities inspect properties and identify those considered derelict.
• 1 September 2027: A preliminary register must be published by the local authorities, setting out certain details in relation to each property on the register, including the property address.
• 31 October 2027: Deadline for owners to appeal inclusion of their property on a preliminary register.
• 31 January 2028: Deadline for appeals to be determined.
• 28 February 2028: Final registers must be published by the local authorities.
• 1 March 2028: First liability date and first valuation date.
• 23 June 2028: First filing and payment deadline.

Phased introduction

The tax is intended to be introduced in phases on a geographic basis. The first preliminary registers will be prepared in 2027 for urban areas with populations of 4,000 or more, before extending to areas with populations of 2,000 or more for preliminary registers published in 2028 and subsequent years.

A central register body will be established to consolidate the information produced by all local authorities to create a single register which will be provided to Revenue.

Tax treatment

The tax will not be deductible against other taxes, although a credit should be available where the property is also subject to Local Property Tax or Vacant Homes Tax.

Reporting will be required under the Derelict Property Tax regime, and interest and penalties apply on late payment of the tax, with surcharges applying on late filing and undervaluation of a property.

Any unpaid liability becomes a charge on the property, and a property could ultimately vest in the State by order of the High Court where the owner does not engage with Revenue in relation to the tax.

Further clarity needed

The tax as a whole and its respective provisions remain subject to commencement by order of the Minister for Finance. We expect this is to facilitate phased introduction of certain provisions as required.

Accordingly, further clarity on the intended commencement of the various provisions would be welcome for landowners and other stakeholders.

The particular details of the tax and its implementation must be carefully considered in order to protect landowners from being unnecessarily burdened. Engagement between the Government, local authorities, Revenue, landowners and industry will be important, particularly given the recent experience of operational complexity and practical difficulties during the rollout of Residential Zoned Land Tax.

Support for first-time buyers

From 7 October 2026, the maximum refund under the Help-to-Buy scheme increases from €30,000 to €35,000, while the limit based on the purchase price or approved valuation of the property increases from 5% to 10%.

The enhanced relief applies where, in the period from 7 October 2026 to 31 December 2029, a first-time buyer enters into a contract for the purchase of a qualifying residence or, in the case of a self-build, draws down the first tranche of a qualifying loan.

Where a homebuyer signed a contract on or before 6 October 2026, they will be unable to avail of the higher maximum refund amount. The increase should provide useful short-term support for eligible first-time buyers. 

A further RZLT rezoning window & additional powers for Revenue

For land included on the 2027 Residential Zoned Land Tax map due to be published on 31 January 2027, the Bill provides a further opportunity to request a zoning change from 1 February 2027 to 1 April 2027.

Local authorities must acknowledge requests by 30 April 2027 and notify landowners of their decisions by 30 June 2027.

An exemption is proposed where a zoning-change request is submitted by 1 April 2027 and is acknowledged by the local authority, provided the land is not covered by a current residential planning application or an existing permission for residential development.

The Bill also introduces additional powers for Revenue to seek information from Tailte Éireann, including the land’s address, Eircode and registered ownership details, where this information is required to administer the tax.

The rezoning opportunity

The additional rezoning opportunity under the Residential Zoned Land Tax is welcome but is likely to be most relevant to farmers and other owners who do not intend to develop their land.

It does not address the principal concerns arising where development is delayed by factors outside an owner’s or developer’s control, or where deferred tax is clawed back on the sale of land that is actively being developed, including in forward-funding structures.

Targeted amendments could address these issues while preserving the tax’s land-activation objective.

Practical outlook

The Bill combines targeted supports with a significant new measure intended to activate underused land and property. We would welcome further clarity on the administration of the new Derelict Property Tax, including the intended use of the ministerial orders that will give effect to its implementation.

We also recommend extending the new 31% capital gains tax rate to disposals of development land, which would better align the tax treatment with the objective of land activation.

More broadly, the impact of these measures will depend on workable administration, timely infrastructure delivery and development conditions that support sustained housing supply.