We are at the point where everyone who owns property in the State contributes something towards the running of their local authority.
Owners of commercial property pay rates; and even those whose buildings are empty pay half the standard rates for their council area. Owners of derelict buildings are charged 3 per cent of the market value annually; and, most recently, homeowners pay property tax.
No one gets a free ride, except owners of vacant sites. Buy a site to develop it and, if that doesn’t work out, the thing to do is clear it of any structure that might attract a levy, stick up a hoarding and walk away. Then wait for the market to recover, perhaps 10 years or more. Meanwhile the city is left with an eyesore, neighbouring businesses lose footfall and potential investors are put off by the rundown appearance of the area.
This anomaly was recognised as far back as 1979 when a government committee tasked with formulating solutions to the worsening condition of inner-city Dublin recommended the introduction of a levy on sites left undeveloped.
Successive governments chose not to implement this recommendation, opting instead for tax-relief schemes. These resulted in some urban renewal, notably the development of the the International Financial Services Centre and the docklands area, as well as the filling in of some large gaps along the quays, but are now blamed for contributing to the bubble that burst leaving developers who entered the market at the wrong time with sites on their hands.
The council’s submission to the Government, which has the support of a wide and diverse range of organisations including the Economic and Social Research Institute, Ictu, Ibec, academics and business associations, notes some land “had the benefit of tax incentives but still remains undeveloped”. The purpose of the levy, the submission states, is to tackle the “no-cost lock on vacant land currently enjoyed by landowners that is advantageous only to them”.
Private developers are not the only culprits when it comes to land hoarding. The Office of Public Works owns a smaller number of very large sites, some of which had been vacant since the 1990s. The council owns more but is not willing to say how many. Its audit of vacant sites is not complete – it has a preliminary total of 235 plots but has yet to match these to owners. Nama, which is also a player, refuses to say how many sites it has charges over.