Part 2 of the Urban Regeneration and Housing Act 2015, which was commenced on 1 September 2015 pursuant to SI 364/2015, provides for the introduction with effect from 2017 of a vacant site register within each local authority area and, with effect from 2018, the payment of a levy by the owner of each such vacant site.
The registration and levy requirements relate to residential or regeneration land and it is intended that the proceeds of the vacant site levy are to be spent by planning authorities (i) where the vacant site comprises residential land, on the provision of housing on residential land in the vicinity of the site; and (ii) where the vacant site comprises regeneration land, on the development and renewal of regeneration land in the vicinity of the site.
While the introduction of these requirements does not have immediate effect, it will give rise to a number of implications of which practitioners should be aware in the context of conveyancing transactions.
Residential land is defined in the Act as meaning land included by a planning authority in its development plan or local area plan with the objective of zoning for use solely or primarily for residential purposes, and includes any structures on such land.
Regeneration land is a new concept introduced by the Act and means land identified by a planning authority in its development plan or local area plan with the objective of development and renewal of areas in need of regeneration, again including any structures on such land.
For the purposes of the Act, a site is considered vacant if:
- In the case of residential land:
- the site is situated in an area in which there is a need for housing;
- the site is suitable for the provision of housing; and
- the site, or the majority of the site, is vacant or idle, or
- In the case of regeneration land:
- the site, or the majority of the site, is vacant or idle; and
- this has adverse effects on existing amenities or reduces the amenity provided by existing public infrastructure and facilities in the area in which is site is situated or has adverse effects on the character of the area.
Register of Vacant Sites
From 1 January 2017, each planning authority will establish and maintain a vacant sites register, into which it will enter a description (including a map) of any site within its functional area which was, in the opinion of the planning authority, a vacant site for 12 months preceding the date of entry.
The register will include the following information in relation to each site:
- Where the site comprises registered land, the folio details;
- The name and address of the owner;
- Particulars of the market value of the site as determined by the planning authority, or by the Valuation Tribunal on appeal; and
- Such other information referred to in the Act as the Minister for the Environment, Community and Local Government may prescribe.
Before entering a site on the register the planning authority will give written notice to the owner setting out its reasons for the proposed entry and the owner may make submissions in response within 28 days of the date of such notice. Where submissions are received, the planning authority must consider those submissions and if it remains of the opinion that the site was a vacant site within the meaning of the Act for the duration of the 12 months concerned and continues to be a vacant site it will enter the site on the register.
The owner of the site entered on the Register may appeal against such entry to An Bord Pleanála within 28 days. On an appeal under this section the burden of showing that the site, or a majority of the site, was not vacant or idle for the duration of the 12 months concerned is on the owner of the site. Where An Bord Pleanála determines that a site was not so vacant or idle (or was no longer a vacant site on the date on which the site was entered on the Register) the planning authority must cancel the entry on the register in respect of that site.
Vacant Site Levy
The vacant site levy will take effect from 2018 and be payable to the planning authority by the owner of a vacant site that stands entered on the register on 1 January of that year. The levy will be payable in arrears each year, beginning in 2019. It will not be payable in respect of any land currently subject to the derelict sites levy.
The amount of the vacant site levy is 3% of the market value of the site. Where the site is subject to a loan the amount of the vacant site levy is to be reduced in accordance with the following bands:
- if the outstanding amount of the loan is greater than the market value of the vacant site, the vacant site levy in respect of the site is 0%;
- if the outstanding amount of the loan is greater than 75%, but less than 100%, of the market value of the vacant site, the vacant site levy in respect of that site is 0.75%; and
- if the outstanding amount of the loan is greater than 50%, but less than 75% of the market value of the vacant site, the vacant site levy in respect of that site is 1.5%.
It is also possible for a planning authority to, where is considers appropriate, deem a vacant site to have a zero market value, in particular where: -
- no market exists for the site; or
- the site is situated on contaminated lands and the estimated costs of remedial works necessary in order to use or develop the site exceed the market value of the site itself.
The market value of a vacant site is to be determined by the relevant planning authority as soon as it is entered on the register and at least once every three years thereafter by estimating the price which the unencumbered fee simple of the site would fetch if it was sold on the open market and in such condition as might reasonably be calculated to obtain for the vendor the best market price for the site. Once the market value has been determined, its details are to be entered on the register and written notice given to the owner of the valuation or revised valuation as the case may be.
The owner of a vacant site is entitled to appeal the market value attributed to his property to the Valuation Tribunal within 28 days of receipt of notice of the written valuation from the planning authority. Subject to a right of appeal to the High Court on a question of law, the determination of the Valuation Tribunal is final.
Practical Points to Note
Any unpaid vacant site levy becomes a charge on the property and will remain a charge on the property until such time as it is paid in full.
In light of this provision, the Act further provides that the vendor of a vacant site entered on the register must:
- before completion of the sale of a site, pay to the relevant planning authority any vacant site levy due and owing in respect of that site; and
- give to the purchaser a certificate of discharge for each year in respect of which the site was a vacant site.
This will discharge the property from the levy as against any bona fide purchaser or mortgagee of the site for full consideration in money or money's worth without notice. Note that the definition of "vendor" for the purposes of this provision includes a solicitor who receives the proceeds of sale on behalf of the vendor or who provides legal advice to the vendor in connection with a voluntary / below market-value transfer of the property.