Revenue to Take Over Derelict Property Tax Collection as Harris Slams Councils' 'Appalling' Enforcement Record
The Government has confirmed that the Revenue Commissioners will assume responsibility for collecting the Derelict Property Tax from local authorities, following a Cabinet decision on 16 June that Tánaiste Simon Harris described as a necessary response to what he called the 'appalling' failure of some councils to enforce the levy — with €26 million left uncollected at the end of 2024 and eleven local authorities having collected nothing at all during that year.
Background
The Derelict Property Tax was introduced as part of Budget 2026 as a mechanism to incentivise the owners of vacant and derelict properties to bring them back into use, addressing one of the most visible symptoms of Ireland's housing crisis. The levy, set at a minimum of 7% of the property's market value, was designed to make it financially unattractive to leave properties idle in a market where housing supply is critically constrained.
The decision to assign collection responsibility to local authorities was, in retrospect, a significant miscalculation. Local councils across Ireland have a mixed record on property-related enforcement, and the Derelict Property Tax proved no exception. The Association of Irish Local Government argued that the collection process was 'legally arduous,' pointing to the complexity of identifying property owners, establishing market values, and pursuing non-payment through the courts. Critics, however, noted that the same councils that struggled to collect the derelict property levy had no difficulty collecting other local charges, suggesting that political will rather than legal complexity was the primary obstacle.
The scale of the enforcement failure became apparent when figures published in early 2026 revealed that €26 million in derelict property tax was outstanding at the end of 2024, with eleven councils having collected nothing at all during the year. The figures prompted immediate political pressure on the Government to act, with Sinn Féin and other opposition parties arguing that the tax was effectively voluntary in its current form.
Key Developments
The Cabinet decision of 16 June transfers collection responsibility to the Revenue Commissioners, who have a significantly stronger track record in pursuing tax liabilities and a more extensive range of enforcement tools available to them. Revenue can attach tax debts to property titles, pursue liabilities through the courts, and ultimately force the sale of properties where owners persistently refuse to pay — powers that local authorities either lack or have been reluctant to use.
The reformed tax will apply to 171 towns and cities across the Republic in its full implementation, covering all settlements with a population of 2,000 or more. Phase one covers 107 towns and cities with populations of 4,000 and above, including Dublin, Cork, Limerick, Galway, and Waterford. Phase two extends coverage to a further 64 towns with populations between 2,000 and 4,000.
Tánaiste Harris was unsparing in his assessment of the councils' performance, describing some authorities as 'appalling' in their management of the levy. Sinn Féin's housing spokesperson argued that the phased rollout was still too slow and called for immediate implementation across all settlements, with an escalating rate structure that would increase the levy for properties that remain derelict for multiple years. The Association of Irish Local Government maintained that the collection process was genuinely complex and that councils had been set up to fail by being given responsibility without adequate resources or legal tools.
Why It Matters
The transfer of collection responsibility to Revenue is significant not merely as an administrative change but as a signal of the Government's seriousness about addressing dereliction. Ireland has approximately 19,400 derelict residential properties, according to figures from late 2025 — a number that represents a substantial untapped housing resource at a time when the country is building approximately 36,000 new homes per year and still falling short of demand.
The political economy of dereliction is complex. Many derelict properties are owned by individuals or families who have inherited them and lack the resources or motivation to bring them back into use. Others are held by developers or investors who are waiting for market conditions to improve before committing to development. The Derelict Property Tax is designed to change the calculus for both groups, making inaction financially costly. Revenue's involvement should make that calculus considerably more real.
Unlike the Vacant Homes Tax, which targets properties that are habitable but unoccupied, the Derelict Property Tax focuses on properties that are in a state of disrepair — a distinction that matters both legally and practically. Bringing derelict properties back into use typically requires more significant investment than simply re-occupying a vacant home, and the tax is intended to prompt owners to either invest in renovation or sell to someone who will.
Local Impact
The impact of the reformed tax will be felt most acutely in the towns and cities where dereliction is most visible. In Dublin, the city centre and inner suburbs contain numerous derelict properties that have been the subject of planning applications, legal disputes, and community campaigns for years. In Cork, the city's historic core has pockets of significant dereliction that have resisted previous attempts at intervention. In Galway, Limerick, and Waterford, derelict town-centre properties are a persistent feature of the urban landscape that undermines the vitality of these cities.
For residents living adjacent to derelict properties, the prospect of more effective enforcement is genuinely welcome. Derelict buildings attract antisocial behaviour, create fire risks, and depress the value and amenity of surrounding properties. The transfer of collection responsibility to Revenue, with its more robust enforcement toolkit, offers the prospect of meaningful action where previous approaches have failed.
What's Next
The legislation required to transfer collection responsibility to Revenue is expected to be introduced in the Dáil before the summer recess, with the new arrangements coming into effect from January 2027. Revenue is expected to publish guidance for property owners in the autumn, setting out the assessment process, the appeals mechanism, and the enforcement options available. The Department of Housing has indicated that it will monitor the impact of the reformed tax closely, with a review planned for 2028 to assess whether the rate and coverage need to be adjusted.
