Business Irish

Wednesday 17 October 2018

Builders set for legal fight as farmers get vacant site reprieve

Fears court action will undermine measure designed to tackle housing crisis

Photo: Stock Image
Photo: Stock Image

Fearghal O'Connor

The Government's vacant-site levy is set to face legal challenges from disgruntled housebuilders after Housing Minister Eoghan Murphy appeared to accede in part to farmers' demands to remove them from the controversial measure.

The apparent climbdown sparked a call from the Construction Industry Federation (CIF) for equal treatment for builders unable to get bank financing to build houses but who are still liable to a levy set at 3pc - and 7pc next year - of the value of vacant land.

Industry sources predicted successful legal challenges would "totally undermine" the levy - a key government measure to tackle the housing crisis. Both farmers' and builders' representatives mounted lobbying campaigns ahead of this Friday's deadline for local authorities to inform landowners that land is on the vacant site register.

Murphy appeared to bow to farming lobby demands to stop at least 15 local authorities including farmland on their vacant site registers. "It is up to each local authority to decide which lands go on to its register. If farmland is in productive use, it should not be included," Murphy stated in the Dail.

CIF director general Tom Parlon told the Sunday Independent: "We anticipate that there will be challenges to the levy if it is applied as a blunt instrument. The CIF will continue to defend housebuilders that are affected, particularly smaller housebuilders who are disproportionately affected by this approach."

Parlon said that, while his organisation supported the concept, it was never the intention that it be applied where land was not financially viable to develop.

The housebuilding industry had noted the minister's comments, he said: "The CIF seek a similar assurance, that any lands that are in any form of productive use, should not be included in the Vacant Site Register by local authorities.

"Where viability of residential development is clearly an issue these lands should not be included."

Asked would Murphy remove land from the register if builders cannot get finance to develop the site, a Housing Department spokesman said: "The levy provisions are intended to be applied equally on owners of vacant underutilised sites irrespective of ability to generate bank finance with a view to incentivising the bringing of vacant sites into productive use at the earliest opportunity."

However, the spokesman added the levy "should not be immediately applied" where "there is insufficient local demand for the immediate provision of housing or where the site is not serviced by the necessary supporting infrastructure".

Sunday Indo Business

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