Under the vacant site levy provisions of the Urban Regeneration and Housing Act 2015, planning authorities are empowered to apply a vacant site levy of 3% of the market value of relevant vacant sites. These arrangements commenced in respect of vacant sites included on local authority vacant site registers prior to 1 January 2018 with payment of the levy due in January 2019.
The Planning and Development (Amendment) Act 2018 (the 2018 Act), introduced amendments to the vacant site levy provisions which collectively aim to further strengthen these provisions. In line with the commitment in Budget 2018, the principal amendment was to increase the rate of levy from 3% to 7% for sites on the vacant site register for the year 2019 onwards. The possibility of applying reduced or zero rates of levy for sites on registers that are subject to a site loan was also removed, reflecting the improved economic circumstances and higher property prices since the levy measure was originally introduced. I have no plans to further amend the vacant site levy provisions at this time.
While application of the levy provisions is a matter for individual local authorities, my Department continues to monitor implementation of the levy to ensure that it is being effectively applied, in line with its intended purpose of incentivising the development of vacant or under-utilised sites in urban areas. To support this work, progress reports were requested from local authorities and the responses received are currently being examined by my Department to see what further implementation supports may be required.
With a view to further addressing the broader issue of land hoarding, the 2018 Act also amends existing provisions in the planning code relating to the extension of duration of planning permission with the aim of ensuring that planning permissions are activated earlier and that the development works are completed earlier.
Furthermore, the recent review of the Strategic Housing Development (SHD) provisions noted the lower than anticipated activation rates on foot of SHD permissions granted to date. Given the benefits for developers with regard to time savings and consistency in decision making, and taking into account the significant public resources invested in the SHD arrangements, I consider it appropriate that developers should be sufficiently motivated to commence development on foot of an SHD permission, in order to ensure the objectives of the SHD arrangements are more clearly met.
Taking account of the relatively lower than expected activation rate of SHD permissions to date, and with a view to reducing the scope for the potential hoarding of sites with SHD permissions for the purpose of increasing site values, and notwithstanding the Review Group’s recommendation to continue monitoring the activation rate for a further period, I consider that it would be timely to introduce a “use it or lose it” measure now. Arising from the introduction of such measure, developers in receipt of an SHD planning permission will be required to commence a certain level of development works within 18 months of the grant of permission, otherwise the permission will lapse. I intend bringing forward the necessary legislation to address this matter at the earliest possible opportunity.