A tax that is imposed on the owners of vacant or idle land which is entered on the Vacant Sites Register under the Urban Regeneration and Housing Act 2015 (as amended).

What is the purpose of the Vacant Site Levy?

The vacant site levy in Ireland, implemented through the Urban Regeneration and Housing Act 2015 (as amended), aims to encourage the development of housing on vacant sites. By imposing a levy on vacant sites, the government hopes to accelerate the development of new residential properties. At the passing of the Act, the Minister stated the levy is a "visible demonstration of the Government's commitment to tackle reasons why so many key sites that are suitable for development are not coming forward at a time of such a major need for housing".

What is a vacant site?

A vacant site is defined under two categories:

  1. Residential land (more than 0.05 hectares) where there is a need for housing in the area. The site is suitable for housing and the majority of the site is vacant or idle or being used for a purpose that does not consist solely or primarily of the provision of housing, and
  2. Regeneration land (other than residential land) where the majority of the site is vacant or idle and is having a negative effect on existing amenities or reduces the amenity provided by existing public infrastructure and facilities in the area or has adverse effects on the character of the area.

For a site to be classified as vacant, it must be "empty or unoccupied" and "not in use", interpretations that have led to legal challenges against local authorities trying to impose the levy. It presents a high hurdle for authorities to prove the land meets the criteria for being vacant, as evidenced by several cases where landowners successfully contested the levy by providing evidence of land use.

How much is the Vacant Site Levy?

The levy is an annual charge, payable retrospectively. It was initially set at 3% of a vacant site's market value but was increased to 7% in 2019.

What is the Vacant Sites Register?

Each vacant site must be placed on the vacant sites register by the local authority within whose functional area the vacant site is situated. The vacant sites register records those sites which are suitable for housing development but have not been put forward for development. A vacant site must be added to the vacant sites register when the local authority decides that the property has been vacant for at least 12 months. The local authority must provide the owner of the vacant site with written notice of its intention to include the site on the register. The register must contain the:

  • Location of each site, including a map
  • Name and address of the owner
  • Current market value

If you own a site on the vacant site register, you may have to pay the vacant sites levy. The register is available at the offices of the relevant local authority and on its website for public viewing.

What will replace the Vacant Site Levy?

A new Residential Zoned Land Tax (RZLT) will replace the vacant sites levy from 1 February 2024 in accordance with Part 22A of the Taxes Consolidation Act 1997 (as amended). In the meantime, the vacant sites levy continues to apply.

What is the Residential Zoned Land Tax?

The RZLT will apply to undeveloped land that is zoned and serviced for residential development. The tax will be 3% of the market value of the land. It will be administered by the Revenue Commissioners and will be payable from 1 February 2024 for land within the RZLT scope on 1 January 2023.

For lands identified as relevant sites after 1 January 2023, RZLT will be first due in the third year after it comes within scope.

What are the legal implications for the Vacant Site Levy and the RZLT?

Understanding the legal implications of both the vacant site levy and the upcoming RZLT is crucial for landowners and developers. Compliance with these taxes not only involves understanding the levy or tax rates but also requires an in-depth knowledge of the processed involved in determining what constitutes a 'vacant site' or land that is zoned and serviced for residential development. It is important for landowners and developers to stay abreast of the legislation to ensure effective management of their assets.

If you would like to discuss concerns regarding the imposition of RZLT on your land, please contact a member of our Planning & Environment team.

The content of this article is provided for information purposes only and does not constitute legal or other advice.