The Department of Housing, Local Government and Heritage announced, in April 2023, a temporary time-limited waiver of development contributions for new residential developments alongside. In addition, the Department launched a refund scheme for Uisce Éireann water and waste water connection charges. These were introduced as part of the Government’s Housing for All Action Plan to speed up the construction of new homes by reducing building costs for developers.
What is a Development Contribution Scheme?
Under the Planning and Development Act 2000, a local authority can implement a Development Contribution Scheme in its functional area requiring developers to pay development contributions at commencement stage. This contribution is intended to cover the costs of roads and other public infrastructure which will benefit the houses under construction.
What is the temporary time-limited waiver?
In response to concerns voiced by developers about the rising costs of delivering new housing, the Government announced a one-year waiver of development contributions. This means that developers will not have to pay development contributions for residential developments that are commenced between 25 April 2023 and 24 April 2024. However, developments commenced within this one-year period must be completed by 31 December 2025 to qualify for the waiver. This is to incentivise speedy completion of new homes.
The waiver will also apply where developers submitted a commencement notice on or after 28 March 2023 or submitted a 7-day notice on or after 4 April 2023 for their residential development.
Developers must submit a Development Contribution Waiver Scheme Application Form and commencement notice to the relevant local authority to claim the waiver.
The Department of Housing, Local Government and Heritage will compensate local authorities for development contributions during the one-year period so that the necessary infrastructure can continue to be provided. The Department has provided guidance for local authorities on how to apply for compensation.
Which developments qualify for the temporary waiver?
All new permitted residential developments may avail of the waiver, including:
- Multi-unit developments
- Self-build houses
- One-off rural houses
- Student accommodation
- Sheltered housing
- Social housing.
The waiver does not apply to refurbishments of or extensions to existing residential properties, even those that are vacant or derelict.
The date on which a residential development received planning permission is irrelevant, so developments where planning permission was granted before 25 April 2023 will still be eligible for the waiver once the other conditions are met.
The waiver scheme also does not apply to supplementary development contributions payable under Section 49 of the Planning and Development Act 2000.
Uisce Éireann New Connections Refund Scheme
In addition to the development contributions waiver, developers can now apply for a refund of Uisce Éireann water and waste water Standard Connection Charges for new residential developments. Developers will still need to pay these monies upfront in the usual manner and then notify Uisce Éireann that building has commenced in order to receive the refund. The same dates for commencement and completion of construction apply to the Uisce Éireann scheme as to the development contributions waiver, commencement between 25 April 2023 and 24 April 2024 and completion by 31 December 2025.
Conclusion
The Government estimates that the development charges waiver and the water connection charges refund scheme together will reduce house building costs by an average of €12,500 per home. As the schemes have only been in operation for a little more than four months at the time of writing, their effect on the cost, speed and volume of housing delivery remains to be seen.
For more information and expert advice, contact a member of our experienced Real Estate team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
