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File photo. Mark Stedman/
vacant site levy

The tax to try prevent property owners from hoarding land was only collected by 1 in 8 councils last year

There was over €2 million outstanding due to councils under the vacant site levy at the beginning of this year.

LESS THAN A third of money due under the vacant site levy was paid by property owners last year with only 1 in 8 councils collecting payments for vacant sites.

A new report by the Oireachtas’ Parliamentary Budget Office (PBO) showed payments of €2.3 million due under the levy were outstanding at the end of the year, while just €882,000 had been collected.

It also highlighted problems in the administration of the levy with some confusion over the definition of “a vacant site” as well issues with identifying owners of sites, staffing shortages and valuing sites.

The report showed only four of the country’s 31 local authorities – Dublin City, Kilkenny, Waterford and Wicklow – had made any collection of the levy last year, while more than a quarter of council had no active register of vacant sites.

The vacant site levy was introduced by the government as a measure to address the housing crisis by preventing property owners from hoarding land that could be developed for housing.

Owners of land listed on vacant site registers on 1 January 2018 were liable to pay a levy of 3% of its market value 12 month in arrears, with the levy rising to 7% for sites listed in 2019 for collection this year.

The total market value of sites subject to the levy for being registered in 2018 was €144 million.

However, the PBO report noted that the final revenue due to be raised is difficult to estimate as sites can be removed from the register for a number of reasons. It pointed out that 47 sites were subject to a change of ownership which meant their respective levies will be set to zero.

It is estimated that 18,000 new housing units could be added to the national housing stock if the vacant site levy was successfully implemented.

“This points to a potential significant role for the vacant site levy in addressing capacity constraints in the provision of housing and underscores the need to ensure that the measure is implemented and administered in a consistent and effective way,” the PBO said.

A total of 304 sites were registered in 2018 with the figure increasing to 353 last year.

Over 200 sites have been removed from registers since the introduction of the levy due to appeals, commencement of development work or being sold.

The report analysed progress reports submitted by all 31 local authorities on implementation of the levy to the Department of Housing, Planning and Local Government.

It said feedback from the local authorities indicated there are persistent difficulties in the administration of the levy which had resulted in an inconsistent approach being adopted by different councils.

Eight local authorities had no active register of vacant sites at the end of 2019 – Cavan, Galway County, Kerry, Leitrim, Louth, Mayo, Monaghan and Offaly.

The report noted that a lack of housing needs had been cited as an explanation for not having an active register, even though data from the Housing Agency indicated all councils had waiting lists for social housing last year.

A total of 17 councils had active registers with market valuations for each site, while six others had active registers but no valuations. Two councils – Meath and Limerick – have subsequently added valuations.

The report acknowledged that there was ongoing concern that the 7% rate is not substantial enough to deter property owners from hoarding land, particularly as house price inflation has averaged 8.5% annually since the introduction of the levy.

Although a levy might be unpaid, all payments due will remain as a charge on the land.

The report recommended that a more centralised approach to the administration of the levy could allow for a more uniform application of the measure.

It also suggested that the introduction of key performance measures would assist in providing “a bird’s eye” view on the effectiveness of the levy.

A spokesperson for the Minister for Housing, Eoghan Murphy, said the fact that a number of vacant sites has been brought back into use since the introduction of the levy showed the measure was having a positive effect on incentivising development in urban areas.

The spokesperson pointed out 50 sites has been removed from registers as development had started on them, while 71 planning applications for development of vacant sites had been submitted following their inclusion on the register, of which 47 have been approved to date.

“The department proactively engages with local authorities to ensure that the vacant site levy achieves its full potential in terms of bringing sites back into productive use,” the spokesperson added.

Seán McCárthaigh
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