The Zoned Land Tax

[Brendan Burgess]

This looks like a real populist nonsense tax.

It assumes that there are many investors hoarding zoned land in the expectation that it will rise in price.

The reality is that house builders have to build a land bank so that when they finish one estate, they can move onto the next.

And there are some sites which are not only zoned, but also have planning permission, where it's just not profitable to build houses as the costs are higher than the prices for which they can sell the houses or apartments.

 

[Brendan Burgess]

I also have sympathy for farmers whose land is zoned who did not apply for it and who want to continue farming.

Should they be forced to sell their land to a developer to build houses?

Seems wrong to me.

Brendan

 

[Towger]

I also have sympathy for farmers whose land is zoned who did not apply for it and who want to continue farming.
Should they be forced to sell their land to a developer to build houses?

My understanding is farmers can apply to have their land rezoned back to Agricultural and the CoCo is required to do so.
The issue is many the 'poor' farmer likes the fact that their land is zoned as Residential and sees the euro signs. However, they don't want to pay any extra tax. In other words they want the best of both worlds, and have put the pressure on the politicians to get it.

 

[Protocol]

One of the reasons costs are so high is that the cost of sites is way too high.

The land and acquistion costs are 70k per house.

This needs to fall sharply, if we are to drive down the costs of development.

Ronan Lyons has suggested that land costs per unit in Dublin of 100k need to fall to 10k, and a SVT would help achieve that.

At an economics conference last year, a panelist stated that even before the RZLT was introduced, it is working, as it is encouraging owners to sell sites.

 

[Protocol]

If a famer's land is serviced and zoned, therefore it must be near a settlement.

Therefore, we need to build on it.

The farmer should sell the land to a developer.

 

[Brendan Burgess]

So should someone with a big garden in Dublin where another house could be built have to build on it or sell it?

I don't believe in absolute property rights but I have to say the idea of compulsory purchase of farm land to build houses seems wrong.

Sure, acquire it to build roads.

But there is plenty of zoned land on which to build.

Brendan

 

[Protocol]

So should someone with a big garden in Dublin where another house could be built have to build on it or sell it?

I don't believe in absolute property rights but I have to say the idea of compulsory purchase of farm land to build houses seems wrong.

Sure, acquire it to build roads.

But there is plenty of zoned land on which to build.

Brendan

If property is liable to LPT already, then it is not liable to the RZLT.

 

[Leo]

Around where my in-laws are from there's quite a bit of zoned land with outline planning in place and developers ready to move, the local authority and Irish Water have been holding them up for years delaying the required infrastructure upgrades. I assume it's not a unique situation and feel it would be harsh to see them penalised when their hands are tied.

 

[Brendan Burgess]

Hi Leo

If the land is not serviced, then the tax does not apply.

Brendan

 

[conor_mc]

So should someone with a big garden in Dublin where another house could be built have to build on it or sell it?

I don't believe in absolute property rights but I have to say the idea of compulsory purchase of farm land to build houses seems wrong.

Sure, acquire it to build roads.

But there is plenty of zoned land on which to build.

Brendan

That’s a false equivalence though. A developer bought land with the express intent of profiting from it, either through active development or through passive appreciation. This just limits the appreciation upside, making development the more attractive option.

If a homeowner bought a big garden, they’re just gluttons for garden maintenance punishment and don’t really get to book a “profit”.

 

[Purple]

So should someone with a big garden in Dublin where another house could be built have to build on it or sell it?

I don't believe in absolute property rights but I have to say the idea of compulsory purchase of farm land to build houses seems wrong.

Sure, acquire it to build roads.

But there is plenty of zoned land on which to build.

Brendan

No, but LPT should be based on the site value, not the house value. That would encourage higher density housing.

 

[faketales]

I also have sympathy for farmers whose land is zoned who did not apply for it and who want to continue farming.

Should they be forced to sell their land to a developer to build houses?

Seems wrong to me.

Brendan

I have sympathy too and don't like the idea.

Ultimately there is a greater good that needs to come into play, think about a growing town, perhaps one that has good rail links to a city and if farmer(s) are farming the lands closest to the town and railway station far more state investment is required to support the building of houses further out. Infrastructure will need to be upgraded out beyond the farmers lands, those living out there will all likely need cars etc. impossible to walk to the school and shops etc.

I don't think we go full on and take the land however the rezoning of the land has provided a carrot with the increased value, except the farmer knows the carrot isn't going anywhere and will only likely get bigger. And so a gently stick could be used.

 

[Brendan Burgess]

No, but LPT should be based on the site value, not the house value. That would encourage higher density housing.

Agree. So if I want a big garden, I pay more LPT.

Apartments would have much lower LPTs than detached houses.

 

[Leo]

Hi Leo

If the land is not serviced, then the tax does not apply.

Brendan

I looked it up but couldn't see what criteria applies there. Most agricultural land that is in use is not serviced, certainly not any more than the land parcels I'm familiar with here which are in small towns adjacent to all services, but can't connect due to capacity issues. Perhaps there's another layer of data that the authorities don't publish that highlights zoned land where connection to one of more services has been refused or referred.

 

[Leo]

Apartments would have much lower LPTs than detached houses.

Remoteness should likely factor in as well to some way compensate for the extra costs per dwelling of one off houses. Of course that wouldn't go down well with the rural lobby.

 

[Brendan Burgess]

From an IFA presentation https://www.ifa.ie/residential-zoned-land-tax-online-information-session/

 

[jpd]

What does "service capacity" mean in this context?

Does it mean that the water supply and waste water treatment plants must be able to supply and treat the forecast demand?

 

[faketales]

What does "service capacity" mean in this context?

Does it mean that the water supply and waste water treatment plants must be able to supply and treat the forecast demand?

Yes. Although I’m not sure where exactly the line is. If land could accommodate 500 houses but capacity is there for 250 it’s probably still serviced.

 

[Leo]

Yes. Although I’m not sure where exactly the line is. If land could accommodate 500 houses but capacity is there for 250 it’s probably still serviced.

Looks like each case is assessed on its individual merits.