“A gift to land hoarders” is how the Government's new vacant zoned land tax, announced as part of Budget 2022, has been described by a Galway city councillor.
Social Democrats Galway City East councillor, Owen Hanley, welcomed the Government’s recognition that the current vacant site levy framework was not working, and that the new tax would be administered centrally by Revenue.
Tax cut
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Under the previous arrangement, local authorities often did not have the resources, the buy-in, or the enforcement power, and Cllr Hanley noted that in 2020, while there was €21.5 million owed nationally in vacant site levies, only one per cent was collected - a mere €21,000.
However, Cllr Hanley warned that the new vacant land tax still had to overcome the exemptions, legal loopholes, and resource problems “that made the vacant site levy so ineffective".
The new zoned land tax will be charged at a rate of three per cent, an “astonishing decrease” from the existing seven per cent vacant site levy. “This is a tax cut for land hoarding,” said Cllr Hanley. “A tax cut for those driving up the cost of land and therefore housing. It is unjustifiable."
Waiting times
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He also questioned the waiting time before commencement with a two-year lead-in time for land zoned before January 2022, and a three-year lead-in time for land zoned after January 2022.
"In a time of incredible anguish as a result of the housing crisis, a two/three year delay was not the bold action we needed to see,” he said. “If the Government is serious about addressing vacant land use,and taxing those who hoard land, then it should cut these lead-in times and charge a vacant zoned land use at seven per cent."
Cllr Hanley has also called for Revenue to be allowed to provide enforcement support to the Galway city and county councils to finish out the Vacant Site Levy. “Until we see real enforcement on vacant land behaviour won't change,” he said. “A sustainable solution to the housing crisis is one where land is used responsibly and effectively for communities."
