The Vacant Site Levy: Increased to 7% for 2019

The "vacant site levy" introduced in 2015 has been increased. The Planning and Development (Amendment) Act 2018 (the "2018 Act"), enacted on 19 July 2018, increases the levy from a maximum 3% to a maximum 7% for the years 2019 and onwards. The levy remains payable annually in arrears so that in 2019 owners will still pay the 3% levy for 2018. 2020 will be the first year that owners will pay the 7% levy for 2019.

The levy was introduced by the Urban Regeneration and Housing Act 2015 (the "2015 Act") and applies to lands zoned for housing or regeneration which are vacant or idle.

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 the provision of housing (or is not being developed for that purpose). The loophole only closes where the  most recent purchase of the land was made after it became residential land.

The protection for sites in debt or negative equity has also been removed.

The only provision for a nil levy that remains is: 

  1. where there is no market value for the site;
  2. where the remedial cost of contaminated land exceeds market value; or
  3. for any year (and the previous year) in which there is a change in ownership of a vacant site (save for transfers to associated companies, connected persons or in the opinion of the planning authority the change in ownership is solely for the purpose of avoiding the obligation to pay the levy).

The legislation governing the designation of a site as a vacant site, the appeals process and the market valuation procedure are unchanged.

For more detail on this or advice or information on any aspect of the vacant site levy, including the two pending legal challenges, please contact Brendan Slattery or any member of our Planning and Environmental or Real Estate teams.

This document has been prepared by McCann FitzGerald LLP for general guidance only and should not be regarded as a substitute for professional advice. Such advice should always be taken before acting on any of the matters discussed.