Call for tax exemption for companies developing sites
A developer has told a conference there should be an exemption from the Government’s planned zone land tax for companies that are working on developing sites.
The Cabinet is introducing a 3% annual levy to discourage speculators from hoarding land that can be used for housing.
Senior managing director of US group Hines Brian Moran said that his company was delayed for four years before it could develop its project at Cherrywood in Dublin.
He said when early work is under way on a site, including getting planning, providing a sewage system, putting in parks and roads, developers would be taxed before they would submit a commencement notice to start building.
“You are going to buy the land, you are doing to do all the work to enable it and you are going to be taxed as you are doing it, I think there is a genuine case for an exemption for a working developer.”
Mr Moran was speaking at the Dublin Economics Workshop annual policy conference, which also heard that Ireland will need more development finance to deliver 50,000 homes a year.
Aileen Gleeson, a senior official at the Department of Finance, said a target of building 50,000 homes would require €20bn of development finance but last year there was only €13bn.
She said to attract institutional capital a stable policy environment would provide greater certainty to investors.
She added that returns for investors dropped the longer their projects were delayed by the planning system.
Ms Gleeson said shovel-ready projects could deliver a 10% return on investment but a site that was subject to a two-year delay only delivered a 5% return.
She said in Ireland there was a “real risk” of delays due to judicial reviews of planning permissions.
Ms Gleeson told the workshop’s annual policy conference there was “positivity” from investors about the Government’s Planning and Development Bill, which is due to be passed by the Oireachtas.
Ms Gleeson said certainty about planning timelines could have a “huge impact” for investors.
Article Source – Call for tax exemption for companies developing sites – RTE
