Vacant Site Levy

General

The  Urban Regeneration and Housing Act 2015 provides for the vacant site levy. The land to which the levy provisions may apply shall be either “residential land” or “regeneration land”. It applies to land in both public and private ownership.

Residential land means land included by a planning authority in its development plan or local area plan with the objective of zoning for use solely or primarily for residential purposes, and includes any structures on such land. Regeneration land  means land identified by a planning authority in its development plan or local area plan,  with the objective of development and renewal of areas in need of regeneration, and includes any structures on such land.

The Planning and Development Act 2000  previously provided that a development plan shall set out a range of objectives for the area in question, including  “the development and renewal of areas in need of regeneration”. However, for purposes of supplementing the provisions relating to the vacant site levy and elaborating on the principles and policies relating to these provisions, the  Urban Regeneration and Housing Act 2015 provides  provide that objective in a development plan shall in future be for “the development andrenewal of areas in need of regeneration … in order to prevent –

• adverse effects on existing amenities in such areas, in particular as a result of the ruinous or neglected condition of any land,
• urban blight and decay,
• anti-social behaviour or
• a shortage of habitable houses or of land suitable for residential use or a mixture of residential and other uses.

Information on the criteria to be used to identify vacant sites on either regeneration or residential land is set out in the vacant site definition.

Vacant Site Residential Land

For the purpose of the application of the vacant site levy, a site is  “any area of land exceeding 0.05 hectares identified by a planning authority in its functional area but does not include any structure that is a person’s home. In effect, a vacant site for the purposes of the levy does not include a person’s home and garden. This applies whether the property is owner occupied or rented

The criteria by which a site shall be considered as vacant depends on whether it relates to residential land or regeneration land.In the case of “residential land”, sea site is considered a vacant site if it satisfies the following criteria:

• the site is situated in an area in which there is a need for housing,
• the site is suitable for the provision of housing, and
• the site, or the majority of the site, is vacant or idle or  being used for a purpose that does not consist solely or primarily of the provision of housing or the development of the site for the purpose of such provision, provided that the most recent purchase of the site occurred after it became residential land, and  before,  the commencement of section 63 of the Planning and Development (Amendment) Act 2018.

The need for housing in an area shall be determined by the planning authority by reference to the following factors

• the housing strategy and the core strategy of the planning authority,
• house prices and the cost of renting houses in the area,
• the number of households qualified for social housing support that have specified the area as an  area of choice for the receipt of such support and any changes to that number since the adoption of the planning authority’s development plan, and
• whether the number of habitable houses available for purchase or rent was less than 5
  per cent of the total number of houses in the area.”.

A site being deemed to be suitable for the provision of housing is determined by the planning authority by reference to

• the core strategy,
• whether the site was served by the public infrastructure and facilities necessary to enable housing to be provided and serviced, and
• whether there was anything affecting the physical condition of the land comprising the site which might affect the provision of housing.

Vacant site on “regeneration land”

In the case of regeneration land,  a site shall be considered a vacant site if it satisfies the following criteria:

• the site, or the majority of the site, is vacant or idle, and
• the site being vacant or idle has adverse effects on existing amenities or 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.

A site being deemed to have adverse effects on amenities or reducing the amenity or character of the area is determined by refrence to

• land or structures in the area were, or are, in a ruinous or neglected condition,
• anti-social behaviour was or is taking place in the area, or
• there has been a reduction in the number of habitable houses, or the number of people living, in the area,

and whether or not these matters were affected by the existence of such vacant or idle land.

Identification and Entry on Register

Once a vacant site has been identified, it must be vacant or idle for a period of 12 months prior to being placed on the register. However, in considering that point, a planning authority shall not take account of any unauthorised development or unauthorised use of the site during that vacancy period i.e. such unauthorised development or use would not negate the
application of the levy.

Planning authorities are advised  by Departmental Guidance to take the following steps for the purposes of applying the levy in their functional areas in accordance with the timelines set out in the Act:

•  undertake a preliminary assessment and quantification of the number and location of potential vacant sites in their functional areas;
• submission of report by the Chief Executive to the elected members of the local authority on the application of the levy provisions in their functional areas;
• inclusion of an explicit objective in the development plan or local area plan (by way of new plan or variation of an existing plan) for the development and renewal of identified “residential land” and/ or “regeneration land” for the purposes of the levy;
• incorporation of designated areas in which the levy can be applied in the development  plan or local area plan;
• identification of individual vacant sites in the relevant designated areas which in the planning authority’s opinion were vacant during the previous year;
•  establishment and maintenance of a register of vacant sites  (entitled the vacant sites register) in the identified areas (under the Act, this can be done from 1 January 2017 onwards);
• once satisfied that relevant sites have been vacant for a minimum of 12 months, including such sites in the vacant sites register and noting the details of the registered owner etc.;
• charging in respect of the previous year a levy on the registered owner of each vacant site which remains included in the vacant site register (under the terms of the Act, if planning authorities have taken all the necessary and preparatory steps in accordance with the timelines outlined above, the first levy shall be payable on 1 January 2019);
• continuing, in each subsequent year, to charge levy on the registered owner of each
  vacant site which remains included on the vacant site register.

Owner Issues

The authority issues notices to the registered owners of vacant sites included in the vacant sites register prior to 1 June each year indicating that such site owners shall be charged levy in respect of the current year in the following January. Uunder the terms of the Act, if planning authorities have taken all the necessary preparatory steps and are in a
position to apply the levy from 1 January 2019, such notice must issue to the registered owner prior to 1 June 2018.

“Owner” means in relation to land that is registered land within the meaning of the Registration of Title act  the registered owner, and  in relation to all other land, a person, other than a mortgagee not in possession, who, whether in his or her own right or as trustee or agent for any other person, is entitled to receive the rack rent of the land or, where the land is not let at a rack rent, would be so entitled if it were so let..

In any  year where there is a change in ownership of a vacant site, including the transfer of ownership due to death, then the levy will be charged at zero for that and the preceding year. However, this provision does not apply in certain circumstances such as where –

• ownership of the site transfers from one company to an associated company,
• the owner of the site transfers it to a connected person (other than where ownership of the site devolves on the death of the owner), or
• ownership of the site changes, in the opinion of the planning authority in whose functional area the site is located, for the sole or principal purpose of avoiding the obligation to pay vacant site levy.

Vacant site levy

Vacant site levy means a levy charged on each vacant site which has been entered on the vacant site register for which a market value has been determined. It shall be payable in arrears and can be applied, at the earliest, commencing in January 2019 in respect of 2018.

The levy is payable on a demand by the planning authority within 2 months, though
arrangements may be made or facilitated by the planning authority for the payment of the levy by the owner of the site by instalments. If not paid, the levy shall be recoverable as a simple contract debt through the Courts.

The levy is not payable on any land which is already subject to a levy under the Derelict Sites Act 1990. This is mirrored by a related amendment to the Derelict Sites Act 1990, to the effect that the derelict sites levy shall not be payable in respect of land on which the vacant site levy is payable  This is to ensure that no double levy situation arises in the
case of any individual site.

A demand for payment of the levy may not be made in a situation where the owner of a site appeals to the Valuation Tribunal against the market valuation of the site as determined by the planning authority. Once the appeal is determined, and the market valuation is determined, the demand for the levy may then be calculated as appropriate and applied

Any levy due will remain to be a charge on the land until paid

Market value

The “market value” in relation to a site shall be determined by the planning authority by estimating or causing to be estimated the price which the unencumbered fee simple of such site would fetch if it was sold on the open market on the date of the determination in such manner and in such conditions as might reasonably be calculated to obtain for the vendor the best market price for the site.

The market value should be determined by a suitably qualified person, authorised by the planning authority, following a site inspection as permitted by the site owner. In a case where an inspection of the property is not permitted, the authorised person shall make an estimate of market value based on their knowledge of the site and property and the prevailing local market conditions.

2018 Rate Change

The amount of the vacant site levy shall

• in respect of the year 2018, be such amount as is equal to 3 per cent of the market value of the vacant site as determined
• in respect of the year 2019 and every subsequent year thereafter, be such amount as is equal to—  7 per cent, or such other percentage (not exceeding 7 per cent) as may stand prescribed, for the time being, by regulations, of the market value of the vacant site

The Minister shall, in prescribing a percentage have regard to changes in the value of property and the Residential Property Price Index published by the Central Statistics Office.