Our July 2018 briefing set out some key points for consideration by property owners on receipt of a vacant site notice from a planning authority. Recent planning legislation and an order made under the Urban Regeneration andHousing Act 2015 have introduced significant amendments to the vacant site levy.
EXTENSION OF NOTIFICATION DEADLINE
Previously, planning authorities were obliged to notify vacant site owners by 1 June 2018 that their sites stood entered on the vacant sites register. The UrbanRegeneration and Housing Act 2015 (Section 11) Order 2018 has extended this deadline to 1 November 2018.
This essentially means that planning authorities have been granted additional time to notify site owners that the levy will be charged for each year from 2018.
REMOVAL OF DISCOUNT/EXEMPTION FOR SITES IN DEBT OR NEGATIVE EQUITY
The Planning and Development (Amendment) Act 2018 has removed the discount/exemption previously applicable to vacant sites with outstanding loans of greater than 50% of market value. A flat 3% levy will now apply across all vacant sites from 1 January 2019.
REMOVAL OF POSSIBLE LOOPHOLE
The 2018 Amendment Act has closed a possible loophole in the 2015 Act whereby site owners could potentially avoid the levy by leasing a site or putting it to use for non-residential purposes (such as playing fields) and thereby contending that a site was not 'vacant or idle'. Such a site now constitutes a vacant site provided that the most recent purchase of the site occurred after it became residential land.
The 2018 Amendment Act has increased the levy from 3% of market value (for 2018) to 7% of market value (for 2019 and onwards).
This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.