Law Society fails in bid to avoid vacant site tax
Planning board says site not being developed
Annual levy could cost €378,000 by 2020
The Law Society has failed in a bid to avoid paying the vacant site levy.
An Bord Pleanála has ruled that a city centre site in its ownership will be subject to an annual levy of €162,000 from January 2019, because it is not being developed, despite being suitable for housing.
In its decision, the board said the Law Society's site at 32-40 Benburb Street, Dublin, valued at €5.4m, was "vacant and neglected" for an extended period of time. It was added to the register of vacant sites on July 28 last by Dublin City Council.
The vacant site levy comes into force from January 1 next year. Each local authority must publish a register, and the levy is applied at a rate of 3pc of the site value. If the site remains undeveloped for 2018, the levy is paid in January 2019.
If the site remains undeveloped during 2019, the levy increases to 7pc of the land value and this charge must be paid in January 2020, resulting in an effective levy of 10pc over the two years.
For the Law Society, the levy will amount to €162,000 if the site is undeveloped in January 2019, rising to €378,000 the following year.
Additions to the register by local authorities can be appealed to An Bord Pleanála.
It has already ruled on three appeals from Ballymore, Cairn Homes and Hammerson, finding in favour of the local council in each case.
Cairn Homes owns a 1.7-acre site at Newcastle, Co Dublin, valued at €920,000, and will be hit with a levy of €27,600, rising to €64,400 in the second year. Hammerson's site on O'Connell Street is valued at €5.4m, and it will be hit with levies of €162,000, rising to €378,000 the following year if it is undeveloped.
Ballymore owns a site with planning permission for 71 homes at Pelletstown, Dublin 15. It will not be obliged to pay the levy, which would have amounted to €60,000 in 2019 and €140,000 in 2020, because construction works have begun. A housing scheme will be launched next year, a spokesperson said.
The Law Society site, which is owned by a company called Benburb Street Property Company, is 0.43 hectares and includes a warehouse in the north-west corner, with part also being utilised as a construction compound for works taking place on an adjoining site.
In its appeal, the Law Society said it was acquired to facilitate an extension of its existing accommodation over the next 50 years, and was not in a "ruinous or neglected condition". Part of the site was used for storage, it added.
The planning appeals board inspector's report noted the society said it had commissioned an update of a "previously prepared masterplan" and "it is the intention to commence development on site in the next three to four years".
"Imposition of (the) vacant site levy will further undermine the Law Society's ability to develop the site, and will simply serve to further delay the redevelopment of these lands," it added. It said that the society had "gone out of (its) way" to maintain the quality of the streetscape by sponsoring "art installations", and would be "prepared to further improve" the site.
The board's inspector said that only a small part of the site was used for storage, adding: "The remainder of the site not in use as a temporary construction site or occupied by the warehouse is in a vacant, overgrown or disused condition."
The board said it was appropriate to class the site as vacant due to its "adverse" impact on the area. The decision of Dublin City Council was upheld.