Tánaiste Leo Varadkar warned land hoarders "we're coming to tax you" as he defended the time it will take to introduce a new Zoned Land Tax (ZLT).
Much of the opposition criticism of the Budget has centred around housing measures including the time it will take to bring in the ZLT and a lack of specific supports for renters.
Minister for Finance Paschal Donohoe announced plans for a ZLT that is to apply to land that is zoned and serviced for residential development but has not been developed for housing.
He said an appropriate lead-in time will be needed for the tax that is to start at 3 per cent of the market value.
Mr Donohoe outlined the lead-in time as two years for land zoned before January 2022 and a three years for land zoned after January 2022.
Both the fact that the rate is less than the existing vacant site levy of 7 per cent and the two to three year lead-in time have been criticised.
‘Big change’
Mr Varadkar defended the plans, however, saying it is a “big change” but that the new tax that will require legislation.
He added it will require maps to be prepared, notice for land owners and time for the Revenue to put a system in place.
“But the message is very clear to anyone who has zoned land, who is hoarding it whether it’s an individual land owner or company - we’re coming to tax you and you need to start developing that land,” said Mr Varadkar.
“You need to apply for planning permission if you haven’t. If you have applied for planning permission you need to start building on it. And that’s the way you’ll avoid this tax because if you don’t do that you will face a tax.”
Mr Varadkar also said “it’s not a once off tax. It’s a tax every year and that is going to erode your profit margins.
“The money you thought you were going to make out of that land, you’re going to make much less if you don’t start developing it right away.”
He said the 3 per cent rate can be increased.
On criticism of Budget support for renters Mr Varadkar said: “People are affected by the housing crisis in different ways.
“Some people are struggling to rent. Other people are struggling to pay their mortgage and some people are struggling to raise a deposit.
“What we’ve done in this Budget is we’ve extended the Help-to-Buy scheme.”
He said this helps people who are struggling to build up a mortgage deposit and that “many of them are renters”.
Mr Varadkar added: “We’ve also reduced income tax for all workers and that will help people who are struggling to pay their rent and people who are struggling to pay their mortgage.”
He hit out at Sinn Féin's alternative budget and argued their proposal to abolish Help-to-Buy would "hurt people who are trying to raise a deposit including renters".
He claimed the rival party’s tax relief proposals are “only for renters and that would be no good to people who are struggling to pay their mortgage”.
