Cork City Council's €15m rates write-off over vacant buildings

Cork City Council has written off €15.5m in commercial rates in the last four years because the buildings they relate to were vacant.

The council operates a commercial rates vacancy allowance relief of 40%, whereby if a premises is vacant, the owner receives a discount on the annual rates that all businesses must pay to the local authority.

John Hallahan, the council’s head of finance, said some business owners refuse to pay despite the discount, and that if business owners were asked to pay full rates, others might let their buildings become derelict in order to avoid paying.

Green party councillor Honore Kamegni said at last night’s council meeting that the continued reduction in rates “rewards vacancy”.

He requested the annual revenue forgone by Cork City Council, and for council management to outline the options to phase out this relief in advance of the 2027 council budget, as Dublin City Council has already phased out its equivalent.

Certain amount of vacancy 

Mr Hallahan said: “The vacancy allowance does not reward vacancy in all instances. There will always be a certain amount of vacancy due to movement of businesses and change of tenancies, business closures, legal disputes, probate cases, and the need for refurbishment works to maintain buildings.

“The current situation where the landlord of a vacant property pays 60% of the rates for an unlet building, can be a substantial burden, especially if the owner is incurring the costs for remedial work on the building. Work to improve the fabric of the city should be encouraged.”

The vacancy reduction scheme had been 50% prior to the 2025 budget, Mr Hallahan said.

However, the write-off decreased by just 6% from 2024 to 2025, despite the 20% reduction in the discount available to businesses.

In total, the council wrote off €3.76m in 2025; €3.99m in 2024; €4.09m in 2023, and €3.68m in 2022.

No guarantee

Mr O’Hallahan said the removal of the vacancy allowance “will not guarantee the collection of the 40%”.

He said: “Charging full rates on vacant property can have unintended consequences, such as a move to dereliction to avoid rates. It can also discourage investment in vacant property.

“Some owners will not pay rates on vacant property no matter what vacancy allowance is applied. We pursue these customers legally, but in general the outcomes are poor and rates are not resolved until the property is sold or occupied. 

“We will bring forward proposals in relation to vacancy relief to members before budget 2027.” 

He said Cork County Council applies 100% vacancy relief to vacant properties in the county area: “Investment in the city area could fall if the neighbouring local authority has a vacancy allowance of 100% and the city further reduces its vacancy relief.”

Mr Kamegni asked why Dublin can have no vacancy relief if such a policy would not work in Cork city.

Mr Hallahan said: “Dublin has had a zero policy for the last number of years. We are in discussions with them and will bring forward a proposal to see how we can do the same in Cork.”