Since 1 January 2017, Local Authorities have been registering vacant sites that fall under the definition of "residential land" or "regeneration land" as set out in the Urban Regeneration and Housing Act 2015 ("2015 Act"). The 2015 Act has been amended by the Planning and Development (Amendment) Act 2018 ("2018 Act"), with one of the biggest changes being an increase in the levy due by the owner of a vacant site from 3% to 7% from 2019 onwards.
To recap, the 2015 Act sets out the criteria to be applied by the Local Authority in determining what a vacant site is. It must ensure that that the site:
- measures in excess of 0.05 hectares;
- is suitable for the provision of housing or in an area zoned for residential use; and
- that the majority of the site is vacant or idle for 12 months.
In the case of regeneration land, it must also be shown that:
- on account of the site being vacant/idle, it has an adverse effect on the existing amenities or reduces the amenity provided by existing public infrastructure or has adverse effects on the character of the area.
In terms of the notification process, once the Local Authority has identified a site, it must give written notice the property owner by 1 November of the prevailing year. Meaning, for 2018, the Local Authority had until 1 November 2018 to inform the owner that their site had been added to the register and, subject to a successful objection, payment will be due in January 2019. Lands subject to the derelict sites levy will not be liable to the vacant sites levy.
An owner of lands placed on the register should ensure that the Local Authority has met all the requirements set out under the Acts, confirm the market value is accurate and review whether any reliefs are available. The owner has 28 days to review and submit a response to the placement of a site on the register, or raise objection. The submission of false or misleading evidence/information is an offence.
Changes under the 2018 Act
A number of changes have been introduced by the 2018 Act:
- The levy has been increased from 3% for 2018 to 7% for 2019. Payments are made yearly in arrears with the 2018 levies due in January 2019.
- The 2018 Act clarifies the position regarding the use of lands zoned residential being used for non-residential purposes. Now, any land zoned for residential use and not used for that purpose can be included on the register. The only exception is in cases where land was bought for agricultural use prior to the land being zoned residential and the land continues to be used for that purpose.
- The 2018 Act removes any relief for
sites subject to debt or negative equity. However, a nil levy still
- Sites that have no market value; or
- Site is located on contaminated lands where the remedial cost exceeds market value.
- If there is a change in ownership of a vacant site in any given year, the vacant site levy for that year (and for the preceding year) shall be zero. This relief shall not apply where ownership transfers between associated companies, connected persons or if, in the opinion of the local authority, the change was for the purpose of avoiding the levy.
Consequences for unpaid levys
Unpaid vacant site levies become a charge on the property that will need to be discharged in full prior to any future sale. The owner will have to produce a Certificate of Discharge evidencing payment in advance of the sale.
Each Local Authority should have its Vacant Site Register on its website.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.