Under the proposed scheme, the tax will apply in urban areas with populations exceeding 4,000 people, including locations such as Navan, Dundalk, Cork, Limerick, Dublin, and Galway. A second phase is planned to extend the measure to towns with populations of more than 2,000.
The DPT will replace the existing Derelict Sites Levy, which currently imposes an annual charge of 7% of a property's market value on owners of properties listed on the Derelict Sites Register.
While the new tax is expected to maintain a minimum rate of 7% of market value, officials have indicated that the final rate could be higher. The Government also intends to strengthen enforcement measures and pursue outstanding unpaid levies more aggressively.
Tánaiste and Minister for Finance, Simon Harris, is expected to brief Cabinet on the proposal on Tuesday, with the aim of introducing the legislation through the Finance Bill later this year.
Speaking to the media, Mr Harris described the prevalence of derelict buildings throughout the country as "an absolute disgrace." He emphasised that the primary objective of the tax is not to generate revenue for the State, but rather to encourage property owners to restore vacant and derelict buildings. According to Mr Harris, the success of the measure will be judged by the number of homes brought back into use.
It is estimated that there are currently 19,438 derelict residential properties across Ireland.
Government officials are continuing to finalise the details of the scheme, with the Derelict Property Tax expected to come into effect in early 2027.
