The vacant site levy was established under the Urban Regeneration & Housing Act 2015 (the “Act”). The aim of the Act is to bring vacant land in urban areas back into beneficial use where the site owners / developers fail to bring forward reasonable proposals to develop or reuse the site. Under the Act planning authorities have been required to create a register of vacant sites in their areas since 1 January 2017. The provisions of the Act apply to both privately owned and publicly owned property.
Is a site suitable for inclusion on the vacant site register?
A site will be classified as a vacant site if it is greater than 0.05 hectares and if the following criteria apply:
(1) In the case of residential land a vacant site is defined as:
(i) wholly or majorly vacant or idle site;
(ii) located in an area where there is a housing need; and
(iii) is suitable for the provision of housing.
(2) In the case of regeneration land a vacant site is defined as:
(i) a wholly or majorly vacant site; and
(ii) that has an adverse effect on the existing amenities or character of the area.
Sites which are included on the derelict site register are not eligible for inclusion on the register.
How does the vacant site levy operate?
A vacant site levy will be applied by all planning authorities to sites which are listed on the register.
The levy is calculated as a percentage of the market value of the site.
The Planning and Development Act 2018 increased the potential levy from a maximum 3% to a maximum 7% of the market value of the site for the years 2019 and onwards. This change was aimed at making the levy more effective at combatting land hoarding.
A planning authority will determine the market value of the site at least once every three years.
The market value of a site is determined by estimating the price if the site sold on the open market on the date of determination applying assumptions which would allow the vendor to obtain the best market price for the site.
A site may be determined by a planning authority to have zero market value where no market exists for the site, where the site is situated on contaminated land or where the cost of remedial works would exceed the site’s market value.
The levy becomes a charge on the land if left unpaid. Section 21 provides that the vendor of a vacant site entered on the register must before the completion of the sale of the site pay to the local authority any vacant site levy due and owing in respect of that site. This also provides that on completion of any sale, the vendor of the site will provide the purchaser with a certificate of discharge for each year on the register. These obligations apply to the vendor and also to the vendor’s solicitor acting in any disposal.
Appealing the market value of the site
The determination of market value may be appealed by the land owner within 28 days after the date of the notice. Appeals are made to the Valuation Tribunal.
Appealing the payment of a levy
The land owner can appeal to An Bord Pleanala after receiving a demand for payment of the levy within 28 days of the date of demand on the basis that the site is no longer vacant or that the calculation of the levy is incorrect.
Where An Bord Pleanála determines that a site was not vacant or idle (or was no longer a vacant site on the date on which the site was entered on the register) the local planning authority must cancel the entry on the register in respect of that site.
Impact of COVID 19 on the vacant site levy
Given the current COVID 19 pandemic the Public Interest (Covid-19) Act 2020 has introduced a number of changes aimed at ensuring the planning system remains operational during these unprecedented times. The 2020 act introduced a new provision (Section 251A) to the Planning & Development Acts 2000 (as amended) which temporarily disregards the timelines in a number of planning laws, effectively stopping the clock for landowners who want to appeal a valuation or the application of a levy under the Act. This is an important measure in ensuring that land owners which are subject to the vacant site levy are not unduly affected by its operation during the current pandemic.
Yet, many further questions arise given that the emergency measures enacted under the 2020 Act are limited by their very nature. Some of the issues which will arise for planning authorities and indeed all stakeholders is whether the vacant site levy will apply for the duration of the pandemic itself or whether planning authorities will be able, willing or obliged to offer revised valuations to landowners affected by the levy if there is a major change to property prices.