The
Vacant Site Levy which was established under the Urban Regeneration &
Housing Act 2015 is likely to have ramifications for all owners of Vacant sites
with the first year of billing due in 2019 for the preceding year at a rate of
3% of the market value in Year 1 rising to 7% after that (as outlined in Budget
2018).
There
is a perception that this will largely only impact the owners of sites in
Dublin or other large cities but this is not the case and as soon as June of
this year owners will start getting notifications in the post that their
property has been entered on the list.
A
practical example of this is that we recently sold some residentially zoned
lands in a Provincial Town which is unlikely to be developed in the short
term. If you apply the 3% levy to the
current value the liability will be €13,000 in Year 1 and €30,000 in Year 2 so
this matter is rapidly going to become a serious issue for landowners.
There
is still some uncertainty around the exact working and implantation of this
levy but we have set out below some initial questions with answers in summary
form. For anyone looking to read the
relevant Act it is available on the link below http://www.irishstatutebook.ie/eli/2015/act/33/enacted/en/pdf
How a site is
deemed vacant:
Vacant sites shall be entered on the register where they
have been vacant for a minimum period of 12 months from January 2017 to January
2018, have an area in excess of 0.05 hectares, are zoned for either ‘Residential’
or ‘Regeneration’ purposes and are consistent with the criteria as set out in
the Act.
Details of Vacant
Site Register and when it will be available for inspection:
It is a requirement of the Act that properties are entered
on the register including details of location, site area, ownership and market
value which will be available for public inspection. From the middle of 2018
sites should start to appear on Local Authorities listings for Public review.
Timescales:
Planning Authorities will notify property owners before 1
June 2018 that their sites are being placed on the register. Thereafter the
owner of the vacant site will be liable for payment of the levy in respect of
each year until the site is no longer vacant.
Objection to
entry on Register:
When notified by the planning authority of its intention to
include a site on the register, a property owner may object to the proposed
inclusion and can make a submission to the planning authority within 28 days. Pending
the outcome of this and if the site is still to be placed on the register the
planning authority must notify the property owner of the decision and the owner
may, within 28 days, appeal the decision to An Bord Pleanála.
Calculating Cost
of Levy:
The planning authority is obliged to determine the market
value of a vacant site as soon possible after the site is entered on the
register, and at least once every 3 years thereafter, and notify the owner
accordingly. The owner may appeal this valuation to the Valuation Tribunal
within 28 days of the notice. Subject to the right of appeal on a point of law
to the High Court, the decision of the Valuation Tribunal is final.
The Planning
Authority or the Tribunal on appeal may, where it considers appropriate deem a
vacant site has a zero market value where –
A.
No
market exists for the site or
B.
The
site is situated on contaminated lands and the costs of remedial works exceed
the market value of the site.
What if there is
a loan on the site:
Where
a site is entered on the Register and subject to a loan the levy shall be
amended as follows –
·
If
the loan is greater than the market value then a zero per cent levy will apply.
·
Where
the loan is greater than 75 per cent but less than 100 per cent of the market
value then a rate of 0.75 per cent will apply.
·
Where
the loan is greater than 50 per cent but less than 75 per cent the levy will be
1.5 per cent.
Any unpaid vacant site levy becomes a
charge on the property and will remain a charge until such times as it is paid
in full. The obligations to discharge the levy and provide the Certificate of
Discharge apply to the Vendor and also the Vendor’s Solicitor acting in any
disposal.
Summary:
A
number of key questions (outlined below) still remain regarding the workings of
this levy and we are awaiting clarification from both the Local Authority’s and
the Department of Environment & Local Government on same.
Ø Is the presence
of a current Planning Permission sufficient to deem a site not Vacant or do
works have to be commenced?
Ø What if the site
is in an area where there is a lack of public services for the site to be
developed ie sewage, water, does the levy still apply?
Ø What happens if
it is uneconomical to develop a site and you can prove this, does the levy
apply?
I
strongly advise that owners review their land holdings if affected and
carefully consider the future asset management of same. Once more information
becomes available it will be easier to accurately assess the likely levy due on
various properties but this is certainly happening and the first bill is going
to arrive in 12 months time so people need to plan in advance. If anyone wants to
discuss in more detail please feel free to contact me.
Clive Kavanagh,
MSCSI, MRICS is a Director of Jordan Auctioneers & Chartered Surveyors who
has been
involved in the sales and valuation process of agricultural & development
lands for the last 14 years. He can be contacted in the office on 045 – 433550
or clive@jordancs.ie
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