At a William Fry Breakfast Briefing this morning, a full-house of nearly 200 representatives from Ireland’s business and commercial property sectors heard from Conor Linehan, Head of William Fry’s Environment & Planning Group and Des Lennon, Director of Development Land at JLL, on how commercial landowners may be liable for the payment of a levy if they are the owner of a vacant site.
Explaining what type of land may be liable, Conor Linehan stated, “The amount of the vacant site levy will be 3% of the market value of two types of land - ‘Residential Land’ and ‘Regeneration Land’ over 0.12 acres. Residential Land means land zoned for residential purposes while Regeneration Land is land identified as being in need of regeneration. 0.12 acres is just less than half a hectare which is not particularly big so many sites could well qualify for the levy. The objective of the levy is to introduce a disincentive to a landowner for leaving a site vacant for many years. It is intended that the levy would incentivise and accelerate its development, or foster its sale to those who have the interest and finance to develop it.”
Explaining why the levy was introduced, Des Lennon noted, “Ireland is currently experiencing a chronic shortage in the supply of housing and commercial property, with concerns expressed about rapidly rising rents and the negative impact on Ireland’s international competitiveness. In housing, the minimum new housing requirement is 20,000 units per annum while only 8,000 housing units were commenced in 2015. The shortage in commercial property is no better with the vacancy rate having decreased from 24% in 2011 to sub-8% in 2015. The current vacancy rate in Dublin city centre is sub 4%. The Vacant Site Levy mechanism is part of the measures to address these supply issues”.
Des Lennon then set out the timeline of the levy, “Commercial landowners and developers need to be aware that from 1 January 2017, each planning authority will establish and maintain a vacant sites register. This register will contain all sites within its area which in their opinion have been vacant for 12 months. The vacant site levy will take effect from 2018 and be payable to the planning authority by the owner of a vacant site on 1 January of that year. However, the levy will not be payable until 2019.”
Conor Linehan concluded the briefing with the following advice: “Now is the time for landowners to act.
Vacant site owners need to stay informed and engage with their local authority to ensure that their land does not fall onto the register. Don’t delay just because there will be no levy payable until 2019. There are plenty of opportunities to participate in the process and challenge the planning authority as necessary. At this stage, it is not clear how easy it will be for land to be delisted from the register so my advice is to ensure that landowners aren’t listed in the first place.”