Two major developers fail in bid to stop landbanks being slapped with vacant sites tax
TWO major developers have failed in an attempt to exclude lands they own from being hit with the vacant sites tax.
An Bord Pleanála has told Cairn Homes and Hammerson that South Dublin County Council and Dublin City Council were correct in including their landbanks on a vacant sites register, meaning that if they are left undeveloped the owners will have to pay a 3pc levy.
Almost 30 appeals by landowners, receivers, public bodies and developers have been lodged with the board, claiming their sites should not be subject to the charge.
The appeals were decided last week, and the remainder will be finalised over the coming weeks and months.
The vacant site levy comes into force from January 1. Sites must be included on a register, and the levy is applied at a rate of 3pc of the site value.
If the site remains undeveloped for 2018, the levy is paid in January 2019.
If the site remains undeveloped during 2019, the levy increases to 7pc of the land value and this charge must be paid in January 2020, resulting in an effective levy of 10pc over the two years.
Cairn Homes owns a 1.7-acre site at Newcastle in Co Dublin, which is valued at €920,000 by South Dublin County Council.
If it remains undeveloped, the levy will amount to €27,600 in the first year, rising to €64,400 in the second year – a total of €92,000.
The company appealed the levy on the basis that planning permission was in place, and it was in discussions with the local authority about developing a public park on the site. Placing the site on the list was “inappropriate”, it said.
UK firm Hammerson controls a site at 46A-52 O’Connell Street in Dublin 1, which was due to be redeveloped under a €1bn ‘Dublin Central’ plan in 2008
that included a 50-metre tall roof garden, or ‘park in the sky’.
The site is valued at €5.4m, meaning the levy will amount to €162,000 in the first year, rising to €378,000 in the second year.
Erroneous
Hammerson said it was an “erroneous classification”, as the building is occupied and not vacant.
The appeal was made in the name of Dublin Central Ltd Partnership.
In the case of the O’Connell Street site, An Bord Pleanála said it was a vacant site. The decision was reached having regard to information submitted by Dublin City Council, the grounds of appeal, an inspector’s report and “the failure of the landowner to demonstrate that the current use of the site is authorised”.
The board considered it “appropriate” that the site be included on the vacant sites register.
In relation to the Cairn Homes site, the board again found in favour of the local authority, South Dublin County Council, based on information received by the council and owner, and its inspector’s report.
The latest figures from Dublin City Council show that 65 properties valued at just over €232m have been included on its register.
Forced
If all owners were forced to pay the levy, almost €7m would be levied in the first year, rising to almost €16.3m in the second.
Named property owners on Dublin City’s vacant site register include the Justice Minister, Dublin City Council, the Law Society, Office of Public Works, St James’s Hospital, the HSE, developer Harry Crosbie, Croke Park, the Mater Hospital, Aldi and a number of developers including IRES Reit and Ballymore.
The most expensive is a site on the South Circular Road, the former John Player cigarette factory site, valued at €22m.
The board considered it ‘appropriate’ that the site be included on the vacant sites register