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LAST UPDATE | 26 Sep 2024
THE ECONOMIC & Social Research Institute has said the proposed residential zoned land tax should be implemented without delay.
The ESRI today released its Quarterly Economic Commentary for Autumn 2024 and noted that the land tax has been identified as a means to target “land hoarding in the residential market”.
It said that reducing the cost of residential land is “one practical way the Government can improve the efficiency and productivity with which housing is supplied to the market”.
Residential Zoned Land Tax will be targeted at unused land, which has been zoned or classified as a site for housing.
The tax would include mixed-land sites, where other services may also be built on the site, and the rate is set at 3% of the land’s market value.
The market value is self-assessed by the landowner.
While Green Party leader Roderic O’Gorman last month acknowledged that the 3% rate was significantly high, he added that it is designed to make it so those who are seen to be “hoarding” land pay a fee on the unused land, develop housing on the site or sell it on to someone who will develop the land.
However, farmers believe that the fee unfairly targets them as some of their land may go unused for particular portions of the year.
The measure was announced in Budget 2022, and there was a long lead in time to allow landowners to be out on notice.
It was planned for the new tax to kick in in February, with bills coming due next May.
However, Taoiseach Simon Harris last month said “no active farmer is going to pay a residential land tax” under his Government, and warned that further delays in implementing the tax were possible.
Harris said the Government will collectively decide on the approach taken to the matter in the Budget on 1 October.
In its Quarterly Economic Commentary, the ESRI acknowledged that some debate has “focussed on the difficulties which some farmers may experience if the tax were to go ahead, as they would be liable for the tax on land used for agricultural purposes”.
Despite this debate, the ESRI said it is “crucially important that the implementation of this tax proceeds immediately”.
It said that addressing land prices is “arguably the only way policymakers can significantly reduce the cost of supplying a house”, as most other cost elements, such as labour and materials, are broadly outside the control of the Government.
“By addressing possible land hoarding, the price of land can be targeted, thereby potentially reducing a cost of production which, typically, accounts for approximately 15 to 20 percent of the cost of a residential unit,” said the ESRI in its commentary.
Speaking on RTÉ’s Morning Ireland, co-author of the report Kieran Quinn said it’s important that the tax is “brought into being as quickly and as efficiently as possible”.
“That would facilitate land to come on stream, and ultimately that would have an impact in terms of reducing the cost of housing and providing housing and that’s a key policy issue at the present time, to deliver as much housing as we can.”
Asked by The Journal this morning about the ESRI’s remarks, Green Party leader Roderic O’Gorman said that he welcomed the research group’s support for the measure.
“I don’t have any detailed update other than engagements with the Department of Finance and indeed, the Department of Housing are ongoing,” he said.
Asked if the tax will be included in this year’s budget, O’Gorman told The Journal: “It’ll have to be part of the budgetary package. Yes.”
Includes reporting by Muiris O’Cearbhaill
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It’s Ireland, there will be loopholes in the loopholes!
@Chutes: You do realise that there can be absolutely legitimate reasons for developers taking years to assemble viable land banks, and they then have to go through the planning process or perhaps wait for local infrastructure to be upgraded before turning a sod.
So, if apartments can not be built already at a cost that people (other than government quangos) could afford to pay, how will more taxes help.
@Thomas Sheridan: Literally says it at the end there!
“That would facilitate land to come on stream, and ultimately that would have an impact in terms of reducing the cost of housing and providing housing and that’s a key policy issue at the present time, to deliver as much housing as we can.”
@Chutes: coming on stream is not the same as ready to build and sell at affordable prices and taking taxes in between is just an added cost for the buyer to pay
@Chutes: You are right. The process is as follows.
Farmer can sell land and buy two farms further our in line for increased value as city expands.
Farmer does not have the know-how, contacts, and money to get his land re-zoned.
Farmer sells to a developer who will hold the land (unzoned) for many years (could be decades).
The land may be sold several times at increasing values between a succession of speculators who know the potentail value
Eventually the developer will get planning consultant, architect, engineer etc to submit for re-zoning.
Councillors are kept sweet. . Council officials are got onside. Rezoning is by vote of the Council. Land is now zoned, but it can be a long wait before building starts. The value is going up all the time, it’ better than money in the bank. That is why the are called land banks.
The land can be sold a few more times, generally at increasing prices.
If the system crashes, the state nationalises the losses (in the form of NAMA)
Finally houses get built, then the council thinks about roads, sewer, water, amenity etc. This why it’s called developer lead development.
Alternative fur Germany, Czech, Nederlands, Denmark and everybody else
Council plans a new suburb or extension to a suburb, with transportation, water services, open space etc.
Council buys the land from the farmer and sells it to builders.
The ‘planning gain’ does not go to a succession of private owners.
Why are we different? Because our Constitution gives priority to private property ownership over common good. Other countries have been so much affected by wars, they are used to putting the ‘common good’ first.
@Thomas Sheridan: Did I make a point somewhere you felt needed to be countered?
@Antony Stack:
Great points very well put
I see USA are asking Israel to stop dropping the bombs they are supplying to them. Can they really not see how ridiculous this is?
@Soundy Sound: well, a kinda pause….. Till after the US election….. After that, bomb away
@Soundy Sound: Nonce.
@The Risen: Is that Pádraig Pearse on your profile? A man who had a keen interest in young boys? And you’re dumb enough to fire words like that at people you disagree with because you haven’t the intelligence to construct a sentence
@Jonny Hellzapoppin: All lies.
@Jonny Hellzapoppin: That f**kwit has Pearce in his profile picture for trolling purposes only. There is precisely ZERO evidence of impropriety towards young boys on Pearce’s part. It was a rumour started by an anti-republican, revisionist historian
@Jonny Hellzapoppin: well that’s bs
@Soundy Sound: Has anyone considered asking the terrorists in the ME to stop firing explosive rockets into Israel.
@Thomas Sheridan: yes, pretty much the whole western world has but they aren’t supplying them with weapons while asking them to stop.
@Soundy Sound: Let’s hope they keep dropping them until nothing is left.
@Alex: Ironic, I’m sure that you would have demanded that the Tans kept burning the towns and cities until the IRA were gone, of course not acknowledging, like Israel that the destruction is against ordinary people, but of course, a child will grow up to be a terrorist in your view, justifying them being killed and not asking why people join these paramilitary forces. Brains aren’t for everyone.
What a load of waffle. This will never be implemented. My family has been trying to build on land and and create jobs and homes for last 3 years and an board planaulla consistently refused. And now they want tax us.
It’s all upside-down and inside out in this country.
Shame on all local counsellors , td’s and ministers.
Your no better then thather.
@Colin Mc: Its mad eh, still trying to shoot the same fish in the same barrel, year on year, Politicians are a big joke really, they do nothing ‘for’ us… the answer there own question in the article… ‘addressing land prices is “arguably the only way policymakers can significantly reduce the cost of supplying a house”, as most other cost elements, such as labour and materials, are broadly outside the control of the Government.’… buy a construction company, place controls on price gouging (Kilsaran etc)… they’ll never do it tho, because it equates to ‘work’… a lot easier to waffle on an pontificate, drop the odd tax. total bs.
This proposed tax will not work. The ERSI are wrong. Ultimately, this will be a further tax ( & burden) on young people buying their first homes.
@Joe McNamara: Also maybe these dreamers in the ERSI might talk to a few house builders. Site values are about 10% of the sale price of a 3- bed semi.
To reduce now house sale prices the government can do the following
1) eliminate VAT as in Northern Ireland 13.5 %
2) change house builder funding rules to allow stage payments 11%
3) omit state planning & connection charges 7%
4) simplify BCAR (building control) 4%
etc etc
In Ireland the actual cost of consuming a new house is less that 50% of the sale price.
@Joe McNamara: Spot on. You can not have VAT or other “taxes/ levies” on basic needs like a house… as for food, water, education, medicine… Obscene.
So tax the owner into selling their land makes sense actually.
@Paul H: PRTB is already driving savings out of providing accommodation. This is another form of in effect nationalisation. We have one of the most left wing countries in the world already.
All land should be taxed as to its potential to encourage the owners to put it to propoer use or sell it to someone who can.
@brian o’leary: You seem to see it like if you bring in a bar stool tax it will get longtime inactive people to work. Or if you buy a shovel instead of a snooker cue you are a bad person and should be punished.
There is plenty of zoned land with permission granted( despite NIMBY objections) its not about land or even money…. there are not enough workers to build… how many kids do you know taking up a trade…
@barry fay: very few these days. Most are taking the college option and not even looking at trades. I even see it in my nephews and nieces. The 2 oldest are sitting the leaving in next year, but are already preparing for college.
Personally, I think it is more that the parents are pushing the college option on their kids because even though everyone now seems to be taking the college route, parents still see it as being more prestigious than a trade like it was when they themselves were that age, when only the select few went to college, and the closest the rest of us got to it was block release to the local RTC
Comments closed on Donohue’s telephone conversation that ‘never happened because he didn’t note it in his diary’, a call that no-one was supposed to know about and yet the Occupied Territories bill still not acted on, all I need to know.
Too much corruption and kickbacks with local politicians and civil servants
Kevin Kerr shot JFK.
I’d rather put a haltin’ site on my land, than give in to this communist behavior..
@Julio’s Evil Twin: funny you say that. Henry George and Milton Friedman supported land taxes, calling them the “least bad taxes”. Hardly commies, weren’t they?
@Name: “land taxes are least bad taxes:… as they’re a way to increase wealth..”.
Regardless of the Communists, I don’t wish to use my private property to increase my wealth..
.
My will is made, you’re probably one of those poor folk who want to tax inheritance to the max.. saying its ‘tax free money’ or something .. smh
.
This is nearly comical. Have been involved in the purchase/sale of a piece of land. 6 weeks to get preplanninig meeting…. this is now entering month 3 for a formal reply on the preplanning. Sale will surely fall throu before all that happens and then owner will get taxed… seriously! sort the planning first before the taxes!
CPO all planter land for 1c and allow these descendents of thieves to keep their house and 1acre of their ill-gotten gain. Being in possession of stolen property is a crime
Maybe the ESRI could ask for the removal of the exception on banks paying tax on profits
What a load of horse shit. This will never be implemented. My family has been trying to build on said land and create jobs and homes for last 3 years and an board planaulla consistently refused. And now they want tax us.
It’s all upside-down and inside out in this country.
Shame on all local counsellors , td’s and ministers.
Your no better then thather
Tax this custodians of the land?
Hahahahahaha!
Don’t expect that soon. The government and their cronies don’t give up their windfalls that easy.
have your say