A new bill could see landowners and developers pay a charge of 30% on the difference in the value of land before and after residential zoning.
The Land Value Sharing and Urban Development Zones bill seeks to clampdown on land speculation, where developers profit off land that is zoned for housing.
Within the proposed law, a new Land Value Sharing (LVS) charge of 30% will apply on the difference between existing use value and the market value on land that has been zoned residential.
However, in many cases an effective charge in excess of 50% will apply when Part V obligations are taken into account and other separate charges, the Department of Housing has said.
Part V rules require developments to have at least 20% social and affordable homes.
This increased revenue will be ring-fenced to fund enabling works for sites, to allow housing development to proceed, such as water services and electricity infrastructure.
The Department of Housing expects this new legislation will result in “significant increased revenues of local authorities”.
Owners of “substantially undeveloped land” which is zoned residential will have to submit a self-assessed value of the site before zoning and after zoning. This comes into effect from 1 July 2024.
The charge will apply where planning permission for homes is granted, unless it has been paid in advance.
A map showing lands which fall within the scope of these new charges will be published in March 2024.
This proposed legislation will first have to make its way through the Oireachtas, before becoming law.
The legislation includes a mechanism whereby the Minister for Housing can, with the approval of the Oireachtas, change the LVS charge, but it can be no lower than 20% and no higher than 30%.