What it is
The vacant site levy was introduced into Irish law through the enactment of the Urban Regeneration and Housing Act 2015 (the “2015 Act”). Section 5 of the 2015 Act defines a vacant site as a site (land exceeding 0.05 hectares) consisting of residential land that is situated in an area in which there is a need for housing, the site is suitable for the provision of housing, and the majority of the site is vacant or idle. A site may also be considered a vacant site under the 2015 Act in the case of a site consisting of regeneration land where the majority of the site is vacant or idle, and the site being vacant or idle has adverse effects on existing amenities, reduces the amenity provided by existing public infrastructure and facilities in the area in which the site is situated, or has adverse effects on the character of the area. The purpose of the levy is to encourage the development of vacant sites and to reduce land hoarding, by making a fee payable by landowners who have been taking up land rather than developing it for housing.
How it Applies
Under section 6(1) of the 2015 Act, local authorities are required to produce and maintain a ‘vacant site’ register; a register of lands in the local authority’s area that are suitable for housing but have not been put forward for development. Sites included on the register are subject to the vacant site annual levy. A site can be added to the vacant site register when the local authority decides that the property has been vacant for 12 months or more. The local authority must give written notice of their intention to include a site on the register to the owner. If a landowner receives notification from a local authority of its intention to include a site on the vacant site register, the landowner may appeal the decision within 28 days. If this appeal is unsuccessful, they may submit a further appeal to An Bord Pleanala in regards to the site. The vacant site levy is payable each year to the local authority until the site is removed from the register. The levy is paid in arrears each year, meaning that the levy in respect of 2019 will be charged in January 2020. The levy is calculated as 7% of the land value for the relevant year.
If the landowner does not engage the appeals process within the 28 days, the only other legal avenue open to them is a judicial review application before the High Court. The burden of showing that the land 'was not vacant or idle' under the 2015 Act falls on the landowner. Accordingly, the submissions which the landowner makes are key to preventing the inclusion of the lands on the register. There have been instances where landowners have been successful in their challenges to the decisions of local authorities to enter their properties on the vacant site register. An example of this is an empty site next to Leopardstown Racecourse owned by Horse Racing Ireland (“HRI”), which was valued at €66.5 million making it the most valuable site on the register. HRI successfully appealed on the basis that the lands were not idle but were being used as an overflow car park for the racecourse and An Bord Pleanala agreed that the site should be removed from the register.
Amendments to the Levy
The most significant amendment to the vacant site levy came in the form of the Planning and Development (Amendment) Act 2018 (the "2018 Act"), enacted on 19 July 2018, which increased the levy from 3% to 7% of the market valuation of the relevant sites with effect from January 2020, in respect of sites included on local authority vacant site registers in 2019. This increase in the rate of the levy is intended to ensure that the measure has a more meaningful impact in terms of incentivising the development of such sites and combatting land hoarding. The 2018 Act also partly closes a perceived loophole, where a site could avoid being labelled vacant or idle where used for non-residential purposes. Now, a site zoned residential will be exposed to the levy where it is being used for a purpose that is not solely or primarily for the provision of housing (or is not being developed for that purpose).
For further information in relation to this matter, please contact Claire McCormack (Partner) or your usual AMOSS contact.