The basic question you need to ask is has there been any development work done to the site since 31 Oct 1972 i.e. since the introduction of the VAT system to Ireland.
If the site is purely a greenfield site there should be no VAT chargeable on the sale.
If the site has been developed then it gets a bit more complicated and VAT may be chargeable. You should note that the definition of development for VAT purposes is quite broad. For example, the construction of sewers etc. might constitute development
The VAT clause is a standard clause included in contracts. I would agree that if no VAT chargeable that you should seek to remove it and the Vendor should have no objection to this.
If the Vendor is proposing to charge VAT you should get your solicitor to obtain VAT Requisitions of Title from the Vendor's solicitors which should explain why they are proposing to charge VAT.
I've tried to be as brief as I can, but VAT on property is messy, so if the Vendor is proposing to charge VAT it might be best to get professional advice.
Hope this helps