When The Levy Breaks

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Why don’t they build more houses in Dublin?

They have a market now what’s stopping THEM?

Not so fast.

Yesterday members of Property Industry Ireland, Dr. Peter Stafford, Aidan O’Hogan, Tom Phillips, chair of the planning and regulation committee and Ms Marian Finnegan, member of the market supply and demand committee appeared before the Joint Committee on the Environment, Culture and the Gaeltacht to discuss the subject of commercial and domestic property – supply and demand.

Mr Phillips revealed in relation to the one of the reasons developers were not building dwellings is that penal levies were being imposed on them and therefore it was not in their interest to build at this time.

“…the Metro in Dublin adds a levy to certain developments. The Metro is on hold, but the levy is still in place. The levy is there for a 30-year period. If the money has not been spent in 30 years, it can be refunded to the developer. I can think of no other levy that has a 30-year life span. There is another special levy in Kilternan. To build an apartment in Kilternan, one pays a levy of €11,000 per residential unit and then a special levy of over €40,000. It works out at €55,000 per unit in levies. That is apart from a potential windfall tax, Part V social housing and other costs. There are many costs. That is the situation for people who have land at present. It is a tricky point…”

Anyone?

Oireachtas.ie

Meanwhile…Pace of property price hikes picks up again – CSO (Irish Independent)

12 thoughts on “When The Levy Breaks

  1. Bonzor

    It’s almost as if you can hear a Budget coming. Endless whinging about levies and taxes from the construction sector.

  2. Kill The Poor

    Why don’t we just trust the developers to put in the social infrastructure that’s needed when they have finished construction ?

    Oh wait because they are a…

    1. Sidewinder

      Damn straight. Building housing for profit without contributing to the infrastructure that housing needs is a recipe for disasters that are still ongoing all around the country.

  3. tomkildare

    its not worth building until prices increase. 40% of a new home is tax. then you have to buy the land, build, services , build roads, parking, play ground, 20% social affordable, marketing and finishing costs. A developer must get at least 250K for a 2 bed outside m50 to only make around 30K profit. Prices are still too cheap to make affordable to build. That is why prices will go back to where they were and then natural inflation will eventually bring prices well above.

      1. tomkildare

        clampers your right, I don’t think you should buy, sure its only a bubble they will go down again!! If we haven’t even close to build cost. but your right hold off

    1. Kieran NYC

      “then you have to buy the land, build, services , build roads, parking, play ground, 20% social affordable, marketing and finishing costs. ”

      You’d almost think they have to put some work in and build something of quality, poor dears!

  4. John

    All luas and metro levy schemes are 25 or 30 years. They are applied under Section 49 of the planning and development act. They are applied in a roughly in a 1km zone around the infrastructure.
    The idea is that the value of property rises in the area around the proposed infrastructure because of the infrastructure. And that at least some of that benefit should be captured by those paying for the infrastructure i.e. the taxpayer. There is nothing unfair or unreasonable about that. And the metro north levy is no where €55,000. It’s around €3000 in Dublin City Council and levied on a sqm basis in Fingal to encourage high density development around the line.

  5. Tom Phillips

    To answer some of the criticisms:

    Firstly Property Industry Ireland represents more than developers. We were invited by the Committee to advise on how to address the shortage of housing evident in Dublin in particular.

    My piece upon which you comment was part of that dialogue. The point about Metro is that it is on indefinite hold and therefore should not be levied. If it doesn’t exist how can it benefit an area as suggested by John?

    Also I didn’t say the Metro levy was 55k. That is the combined levy for an apartment in Kilternan. It is to pay for the purchase of land to build a new road, not Metro.

    We referenced it as part of a wider conversation on the factors leading to a lack of housing construction. If it costs too much to build there will be an even greater shortage as the population increases as is evident from the Census and ESRI studies.

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