In a recent development, hundreds of property owners have lodged planning appeals against a new tax aimed at encouraging construction on vacant land.
The appeals, totalling 600, have added to the mounting workload of An Bord Pleanála, the planning appeals board, which is already grappling with a significant backlog of planning files. To address this backlog, the board has initiated a “blitz” of decision-making on smaller cases.
Residential Zoned Land Tax and its Implications
The residential zoned land tax (RZLT) is set to take effect next year as part of the government’s strategy to address the housing crisis by unlocking vacant sites. The primary objective of the RZLT is to discourage property hoarding by imposing costs on owners, ultimately boosting the supply of new homes.
Oonagh Buckley, the interim chairwoman of An Bord Pleanála, revealed that the appeals against the new tax now constitute approximately 16% of the board’s workload. She informed the Oireachtas Housing Committee that 600 valid appeals were received in May alone, necessitating swift processing. These appeals were submitted after direct appeals to local authorities, responsible for mapping out properties subject to the RZLT, were rejected.
Challenges and Delays at An Bord Pleanála
An Bord Pleanála encountered significant delays in decision-making due to the unexpected and planned departures of board members last year. This resulted in a considerable decline in the number of settled cases. The board’s membership temporarily dropped to only four members, compared to the usual 15. The government appointed interim members to bridge the gap and restore the board to its full strength.
However, Ms Buckley mentioned that one interim member is soon to leave due to a promotion.
Ms Buckley herself, who assumed the role of interim chair in January, will also depart in September after being appointed as the secretary general of the Department of Environment, Climate and Communications. The appointment of her successor by Minister for Housing Darragh O’Brien is pending.
A “Blitz” of Decision-Making and Prioritisation
With approximately 3,400 pending cases, representing a year’s workload, An Bord Pleanála recently executed a “blitz” of decisions and expects to continue this approach later in the year.
Last week alone, the board issued over 180 decisions, the output of decisions is projected to significantly increase in the second half of the year, and the “blitz” strategy cannot be implemented for larger case files.
Recognising the importance of meeting deadlines for housing applications under new legislation regarding large-scale residential developments, the board has decided to prioritize larger cases. Failure to adhere to these deadlines may result in fines being imposed on developers.
In addition to the backlog of planning files, An Bord Pleanála is also tasked with reviewing 76 strategic housing development files under lapsed “fast-track” legislation, designed to expedite the delivery of large-scale housing projects.
Despite the challenges faced by An Bord Pleanála, efforts are being made to address the workload and streamline the decision-making process to effectively tackle the housing crisis and unlock the potential of vacant land.
What Does This Mean for Landlords?
The influx of planning appeals against the residential zoned land tax (RZLT) has significant implications for landlords and property owners. Intending to discourage property hoarding and stimulate the construction of new homes, the RZLT places financial burdens on owners of vacant land. As a landlord, it is essential to understand the potential impact of these appeals and the broader context of the housing crisis.
Firstly, the high volume of appeals indicates strong resistance from property owners towards the new tax. This resistance stems from concerns about the financial implications and the potential reduction in profit margins. Landlords who own residentially zoned land may face additional costs, which could affect their investment returns and overall business strategies.
Furthermore, the mounting workload of An Bord Pleanála due to these appeals may result in delays and extended processing times for landlords seeking planning permission or approvals. As the board prioritizes cases related to the RZLT, landlords with other planning concerns might experience setbacks in obtaining decisions on their applications.
Landlords must stay informed about the progress of these appeals and any updates related to the RZLT. Monitoring the situation and understanding the decision-making processes of An Bord Pleanála will enable landlords to adjust their strategies and anticipate potential challenges in the current real estate landscape.
Additionally, landlords should consider exploring alternative avenues for development, such as repurposing existing properties or investing in areas that are not subject to the RZLT. Diversifying their portfolios and adapting to the changing regulatory landscape can help landlords mitigate risks and maximize their returns in the face of evolving taxation policies
Ultimately, staying informed, seeking professional advice, and closely monitoring developments in the planning appeals process will be crucial for landlords navigating the implications of the residential-zoned land tax and ensuring the continued success of their property investments. But if you have an experienced property manager then all of this will automatically be taken care of on your behalf.
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