Revenue to Collect New Derelict Property Tax Across 107 Towns as Government Tackles Blight
The Government has confirmed that the Revenue Commissioners will take over the collection of a new Derelict Property Tax covering 107 cities and towns across Ireland, replacing a local authority levy system that has been exposed as comprehensively dysfunctional — with eleven councils collecting nothing at all in 2024 and state bodies including the HSE and the Office of Public Works among the owners of properties sitting on derelict site registers.
Background
Dereliction is one of the most visible and frustrating manifestations of Ireland's housing and planning crisis. In towns and cities across the country, vacant and derelict buildings sit idle for years — sometimes decades — while communities struggle with housing shortages, declining town centres, and the social and economic costs of urban blight. The sight of boarded-up shopfronts, crumbling Georgian terraces, and overgrown sites in the middle of thriving communities has become a defining feature of the Irish urban landscape, and successive governments have promised to address it.
The existing mechanism for tackling dereliction — the derelict site levy, introduced under the Derelict Sites Act 1990 — has been widely regarded as a failure. Local authorities are responsible for identifying derelict sites, placing them on a register, and collecting a 7% annual levy on their market value from their owners. In theory, this creates a financial incentive for owners to bring properties back into use. In practice, the system has been plagued by inconsistent enforcement, inadequate resources, and a reluctance by some councils to pursue levy collection aggressively.
The scale of the failure was laid bare in a series of reports and parliamentary questions over the past two years. Eleven local authorities collected no derelict site levy income whatsoever in 2024. Several others collected only token amounts. The total national levy income was a fraction of what it should have been given the number of properties on derelict site registers. Perhaps most embarrassingly, it emerged that state bodies including the Health Service Executive and the Office of Public Works own properties that appear on derelict site registers — meaning that the State itself is among the worst offenders when it comes to allowing buildings to fall into disrepair.
Key Developments
The new Derelict Property Tax will be administered by the Revenue Commissioners, who have a proven track record of effective tax collection and the technological infrastructure to manage a national property tax system — as demonstrated by their successful administration of the Local Property Tax since 2013. The tax will initially apply to 107 cities and towns with populations over 4,000, covering all of Ireland's major urban centres including Dublin, Cork, Limerick, Galway, and Waterford, as well as a large number of smaller towns across every county.
The rate and precise structure of the new tax have not yet been finalised, but the Government has indicated that it will be set at a level that creates a genuine financial incentive for owners to bring derelict properties back into use. Properties owned by state bodies will not be exempt, a decision that has been welcomed by housing advocates who argued that the State's own dereliction was undermining the credibility of the enforcement regime.
Housing Minister Darragh O'Brien, who has championed the measure, described the transfer of collection responsibility to Revenue as a "game-changer." "The local authority levy system has not worked," he said. "Revenue has the systems, the data, and the enforcement powers to make this tax effective. We are serious about tackling dereliction, and this is how we demonstrate that seriousness."
Why It Matters
The significance of this reform extends beyond the immediate question of dereliction. It represents an acknowledgement by the Government that local authorities, despite their best efforts in many cases, are not the right bodies to administer a tax that requires consistent national enforcement. The decision to transfer responsibility to Revenue is a significant shift in the relationship between central and local government in the area of property taxation, and it sets a precedent that could be applied to other areas where local enforcement has been inconsistent.
The revelation that state bodies own derelict properties is particularly important. The HSE, which manages a vast estate of former hospitals, health centres, and administrative buildings, has been criticised for allowing properties to fall into disrepair rather than disposing of them or bringing them back into use. The OPW, which manages the State's property portfolio, faces similar criticism. If the new tax applies to state-owned derelict properties, it will create a financial incentive for these bodies to act — and the revenue generated could be directed back into housing or community development.
Local Impact
The impact of the new tax will be felt differently in different parts of the country. In Dublin, where land values are highest, the financial incentive to bring derelict properties back into use is already strong, and the new tax may accelerate decisions that owners were already considering. In smaller towns — particularly in the midlands and the west, where property values are lower and the economics of renovation are more challenging — the tax alone may not be sufficient to unlock derelict buildings, and additional supports such as the Croí Cónaithe vacant property refurbishment grant will need to work in tandem with the new levy. In Cork, Limerick, and Galway, where town centre dereliction has been a persistent problem, the combination of the new tax and existing urban regeneration schemes could produce meaningful results within three to five years.
What's Next
The legislation establishing the new Derelict Property Tax is expected to be published before the summer recess, with the tax coming into force in 2027. Revenue is currently developing the administrative systems needed to manage the new tax, including a national derelict property database that will draw on data from local authorities, the Valuation Office, and other state bodies. The Government has indicated that it will publish a comprehensive review of the derelict site register in all 107 covered towns before the end of 2026, providing a baseline against which the impact of the new tax can be measured.
