Development levies cut to boost construction
Published 05/06/2015 | 02:30
Development will be able to avail of reduced development levies under new legislation aimed at kickstarting the construction sector.
Development levies have been slashed by local authorities in recent years - but developers who received planning permission before 2013 still have to pay Celtic Tiger rates.
Under the Urban Regeneration and Housing Bill, which was drafted by Environment Minister Alan Kelly and Housing Minister Paudie Coffey, developers can pay current rates when houses are sold.
A percentage of the sale of houses sold by developers is paid to local authorities.
Since the property market collapsed there has been calls to reduce the rates.
City and county Councils began cutting development levies two years ago and so far around 20 local authorities reduced their rates.
It is expected the remaining local authorities will reduce charges in the coming year.
In Dublin, developers will benefit from levy cuts of around 20pc when selling houses once the legislation is enacted.
The move is part of a range of measures that are being introduced by the Government to address the housing crisis.
The housing shortage, especially in Dublin, is one of the biggest challenges facing the Government. Last year, the Coalition announced its €3.8bn Construction 2020 plan to address the shortage.
The new legislation will see developers forced to hand over 10pc of houses built in a development to social housing.
Under existing legislation, developers are able to pay off local authorities rather than build social houses.
The bill will also see the introduction of a vacant site levy which it is hoped will lead to more construction in towns and cities.
Owners of derelict sites - both public and private - will have to pay levies of 3pc of the market prices of the site if it remains vacant. In Dublin city centre there are around 600 sites where owners will be forced to pay the charge.
Local authorities will also have the power to designate sites in villages and small towns where the levy will apply.
Mr Kelly said the new measures will remove disincentives to construction and help to increase housing supply generally
"Developers won't be able to buy their way out of social contributions but will be able to benefit from a reduction in development contributions. In time, this bill will also ensure that vacant sites such as those are brought into productive use," he told the Irish Independent.
"This Bill, once enacted, will deliver on commitments in the Government's Construction 2020 Strategy and help to ensure that any potential barriers in the planning system are removed with a view to facilitating increased activity in the housing construction sector," he added.
Mr Coffey said he expected the bill to be enacted before the Dáil rises for the summer recess.
"This Bill is essential in order to maximise and exploit the full potential of existing public infrastructure in our cities and towns and regenerate sites with good potential in locations of high demand," he added.