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Tax assault on Irish land hoards
00:00 21 Jun 2000
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Exclusive by Anthony Garvey
The Irish government has ordered a tax crackdown on developers who hoard building land in the expectation of making larger profits as house prices escalate.
Land hoarding, ministers believe, has fuelled an unprecedented spiral in Irish house prices, which have risen by more than 20% in each of the last five years and are currently among the highest in the EU. An average new home in Dublin now costs around IR£180,000, putting it beyond the reach of many first-time buyers.
In a bid to cool the market and avoid a crash similar to that experienced in the UK in the 1980s, the government is cracking down on hoarders and property speculators, while slashing stamp duties for first-time buyers and providing a fast-track planning system to increase housing supply. The action is being taken on the back of a report on the housing market by economic consultant Dr Peter Bacon, his third for the government in as many years.
Under a range of measures announced Friday 6 June, strategic zones for residential development will be established in the major cities, Dublin, Cork, Galway, Limerick and Waterford. The planning process for these zones will be streamlined, curtailing the rights of third-party objectors, such as residents' associations and environmental groups, and halving the average waiting time for building approval.
Developers with land inside these areas, or with sites elsewhere which have been zoned for housing, will be expected to show a similar sense of urgency in getting the work under way. In a crackdown on hoarding, those developers who fail to apply for planning permission within 12 weeks of the land being zoned will face an annual tax of IR£3,000 on the site of each proposed house or apartment. And the tax will be due again if the developer has not started building within 26 weeks.
There will also be a special recruitment drive for planners to operate the new fast-tack process for the residential development zones, as well as to remove the bottlenecks in the current system. To ease the pressures on existing staff, the government has decided to exempt home extensions of up to 40m2 from planning permission.
The Irish government has ordered a tax crackdown on developers who hoard building land in the expectation of making larger profits as house prices escalate.
Land hoarding, ministers believe, has fuelled an unprecedented spiral in Irish house prices, which have risen by more than 20% in each of the last five years and are currently among the highest in the EU. An average new home in Dublin now costs around IR£180,000, putting it beyond the reach of many first-time buyers.
In a bid to cool the market and avoid a crash similar to that experienced in the UK in the 1980s, the government is cracking down on hoarders and property speculators, while slashing stamp duties for first-time buyers and providing a fast-track planning system to increase housing supply. The action is being taken on the back of a report on the housing market by economic consultant Dr Peter Bacon, his third for the government in as many years.
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Under a range of measures announced Friday 6 June, strategic zones for residential development will be established in the major cities, Dublin, Cork, Galway, Limerick and Waterford. The planning process for these zones will be streamlined, curtailing the rights of third-party objectors, such as residents' associations and environmental groups, and halving the average waiting time for building approval.
Developers with land inside these areas, or with sites elsewhere which have been zoned for housing, will be expected to show a similar sense of urgency in getting the work under way. In a crackdown on hoarding, those developers who fail to apply for planning permission within 12 weeks of the land being zoned will face an annual tax of IR£3,000 on the site of each proposed house or apartment. And the tax will be due again if the developer has not started building within 26 weeks.
There will also be a special recruitment drive for planners to operate the new fast-tack process for the residential development zones, as well as to remove the bottlenecks in the current system. To ease the pressures on existing staff, the government has decided to exempt home extensions of up to 40m2 from planning permission.
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