Vacant site tax could prevent major long term housing projects

Patslatt1

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See https://www.rte.ie/news/budget-2018/2017/1010/911250-vacant-site-levy-to-more-than-double-to-7/

A major regeneration plan described in the London Times May 15 article "London's inner-city regeneration plan that is a true labour of love" might well have been prevented by a tax similar to Ireland's vacant site tax. The developer British Land has slowly been accumulating land for six years for the Canada Water development in a 53 acre area that will have 3,000 homes and six skyscrapers.

Under the punitive Irish vacant site levy, taxes would have to be paid many years before the development returned a profit given the huge upfront outlays of £3 billion and the fiteen year time horizon to completion.

There would be no need for a vacant site tax if the government cut the red tape of planning permissions and invested in housing infrastructure in water, sewerage and roads to facilitate developments.
 


Hitchcock

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See https://www.rte.ie/news/budget-2018/2017/1010/911250-vacant-site-levy-to-more-than-double-to-7/

A major regeneration plan described in the London Times May 15 article "London's inner-city regeneration plan that is a true labour of love" might well have been prevented by a tax similar to Ireland's vacant site tax. The developer British Land has slowly been accumulating land for six years for the Canada Water development in a 53 acre area that will have 3,000 homes and six skyscrapers.

Under the punitive Irish vacant site levy, taxes would have to be paid many years before the development returned a profit given the huge upfront outlays of £3 billion and the fiteen year time horizon to completion.

There would be no need for a vacant site tax if the government cut the red tape of planning permissions and invested in housing infrastructure in water, sewerage and roads to facilitate developments.
There has been more than enough incentivising of the private sector to build through tax incentives, Strategic Development Zones, Strategic Housing Development, lowering of apartment guidelines etc.

The vacant site level which at it's current level is pathetic and will have little effect in preventing man of the big development agencies from hoarding land.

Through LIHAF the state is investing in infrastructure.

The reason builders are not building houses is because they are profit driven, and they can't make enough money from building affordable houses hence irrespective of the the actual social need for houses they won't budge.
 

Patslatt1

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There has been more than enough incentivising of the private sector to build through tax incentives, Strategic Development Zones, Strategic Housing Development, lowering of apartment guidelines etc.

The vacant site level which at it's current level is pathetic and will have little effect in preventing man of the big development agencies from hoarding land.

Through LIHAF the state is investing in infrastructure.

The reason builders are not building houses is because they are profit driven, and they can't make enough money from building affordable houses hence irrespective of the the actual social need for houses they won't budge.
All the tax breaks for private landlords were cut back years ago and many are quitting because of the fifty percent income tax rate including prsi on rental income. Capital improvements as opposed to maintenance costs can't be expensed for taxes.

Real estate investment trusts get a favourable tax structure on condition they pay out most of their earnings which then are taxed in shareholders' hands.

Lowering of apartment guidelines lowered ridiculous red tape requiring unrealistically large apartment sizes and expensive lifts to cater to structures with unnecessary dual aspect windows on opposite sides. This red tape was designed by politicians to please NIMBY home owners by slowing down housing building.

Government announcements about housing plans and strategies should be viewed sceptically given past failures to deliver on promises.

Builders are not charities but they will build if the government removes unfavourable conditions on housing infrastructure and planning. After all, they built most of the housing you see around you.

You need to take a course in economics and accountancy 101 if you think the tax on vacant land isn't punitive or maybe you are a hard leftie?
 
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Analyzer

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Irish planning policy is deeply dysfunctional. And at the very centre of that madness are the local authorities, who are now doing all they can to make people desperate for local authority housing.

Because that is a prop for their political rackets. It makes docile, obedient, grateful voters, who are prepared to ignore serial incompetence, empty virtue signalling and pointless posturing.

Dublin needs to be build like a city, not a phekkin village. There is NO shortage of building space. There is a restriction on builing that creates shortages.
 

Patslatt1

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Irish planning policy is deeply dysfunctional. And at the very centre of that madness are the local authorities, who are now doing all they can to make people desperate for local authority housing.

Because that is a prop for their political rackets. It makes docile, obedient, grateful voters, who are prepared to ignore serial incompetence, empty virtue signalling and pointless posturing.

Dublin needs to be build like a city, not a phekkin village. There is NO shortage of building space. There is a restriction on builing that creates shortages.
Politically motivated planning red tape panders to NIMBY home owners who constantly beg politicians, planners and courts to block housing development on spurious environmental grounds exploited in planning regulations.
 

Analyzer

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Politically motivated planning red tape panders to NIMBY home owners who constantly beg politicians, planners and courts to block housing development on spurious environmental grounds exploited in planning regulations.
The purpose of Irish planning policy is to accomodate banks, and political machines. There was a time when construction developers were part of the racket. But that is no longer the case.

Which means that policy is now more favourable to bankers, quangocrats and politicians.
 

Pizza Man

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There has been more than enough incentivising of the private sector to build through tax incentives, Strategic Development Zones, Strategic Housing Development, lowering of apartment guidelines etc.

.....

The reason builders are not building houses is because they are profit driven, and they can't make enough money from building affordable houses hence irrespective of the the actual social need for houses they won't budge.
Isn't there a gaping logical lacuna between the two paragraphs quoted above?
 

Patslatt1

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The purpose of Irish planning policy is to accomodate banks, and political machines. There was a time when construction developers were part of the racket. But that is no longer the case.

Which means that policy is now more favourable to bankers, quangocrats and politicians.
The rise in housing prices from a strangled housing supply since the Celtic tiger crash has helped recovery of valuations of under water bank mortgages where the house valuations were less than the mortgages. Unfortuntely,the cost to low and moderate income people of exploding housing costs is now the main cause of poverty and inequality.
 

Analyzer

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The rise in housing prices from a strangled housing supply since the Celtic tiger crash has helped recovery of valuations of under water bank mortgages where the house valuations were less than the mortgages. Unfortuntely,the cost to low and moderate income people of exploding housing costs is now the main cause of poverty and inequality.
In other words, the authorities have bailed out the banks, and pushed up the cost of living. And the same authorities are now posing as the solution, via more market rigging/intervention.

This society is increasingly run like a racket.
 

Travis Bickle

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We need to stop propping up the housing market. If people can't afford your properties, either lower your prices or get a new career. No other business gets the tax payer funded assist like housing. Prices are artificially high. Instead of keeping them high with grants, subsidies and rental aid, and financing private builds with NAMA/our money, build social housing.
 

Patslatt1

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In other words, the authorities have bailed out the banks, and pushed up the cost of living. And the same authorities are now posing as the solution, via more market rigging/intervention.

This society is increasingly run like a racket.
Many TDs are landlords.
 

Patslatt1

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We need to stop propping up the housing market. If people can't afford your properties, either lower your prices or get a new career. No other business gets the tax payer funded assist like housing. Prices are artificially high. Instead of keeping them high with grants, subsidies and rental aid, and financing private builds with NAMA/our money, build social housing.
Social housing building has almost disappeared compared to a generation ago, partly because past poorly planned projects created socially excluded ghettos of the lowest income people.

Rental subsidies are high but this is a result of housing scarcity more than a cause of high rents.

Housing prices are artificially high because politicians pandered to NIMBY home owners by creating red tape to block housing building on spurious environmental grounds. NIMBY home owners have a high voting turnout that influences politicians and NIMBYS want nothing built near them.
 

storybud1

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Politically motivated planning red tape panders to NIMBY home owners who constantly beg politicians, planners and courts to block housing development on spurious environmental grounds exploited in planning regulations.
Amadan O Riordan objecting to housing in Raheny, Shane Ross objecting to student accomodation in Stillorgan, huge social housing projects flung out to places of least objection (or cheaply bought councillors) and nothing will change until the Luvvies get their share,, I find it outrageous RTE were allowed sell off OUR land in Donnybrook when we would have loved a 5000 unit asylum reception centre built there given RTE's concern about this "issue" over the last few years,,
 

fifilawe

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true labour of love" might well have been prevented by a tax similar to Ireland's vacant site tax
MIGHT is a very big word i.e Ireland might win 3 world cups in a row in football.Ireland might win the Cricket world cup 4 times in a row.
the most often used words in court are "may","might","if" ..........
Anything is possible with might or it may also signify "improbable, very unlikely" it all depends on context and implied nuances .
 

Patslatt1

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true labour of love" might well have been prevented by a tax similar to Ireland's vacant site tax
MIGHT is a very big word i.e Ireland might win 3 world cups in a row in football.Ireland might win the Cricket world cup 4 times in a row.
the most often used words in court are "may","might","if" ..........
Anything is possible with might or it may also signify "improbable, very unlikely" it all depends on context and implied nuances .
Vacant sites earn no income,so the tax presents cash flow challenges. A 7% vacant site tax is confiscation where sites won't necessarily rise in value much if at all depending on "Location, Location, Location" as estate agents say. In an economic recession, site values usually fall as highly cyclical building activity dries up. That raises two key questions: will site owners have to go begging the government for relief from 7% and will a government that may depend on lefties and footloose independents agree to relief?

Financial analysts doing spreadsheet forecasts of costs of projects that require a lot of slow accumulation of development land over many years quantify the highly negative impact and uncertainty that the site value tax would have on projects' cash flows and profitability. Many projects would be cancelled or delayed in weak property markets.

To save money on the tax, many developers would wait until the building cycle is turning upwards before accumulating vacant sites instead of building on sites they should already have acquired. That delay could hamper recovery of building. It could also force small developers and small builders into vastly overpaying for sites in the rush to buy since they need to keep their workforces occupied.

So the negative impact of the tax in the long run is definetely not a vague risk to builders.
 

Analyzer

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Analyzer

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Amadan O Riordan objecting to housing in Raheny, Shane Ross objecting to student accomodation in Stillorgan, huge social housing projects flung out to places of least objection (or cheaply bought councillors) and nothing will change until the Luvvies get their share,, I find it outrageous RTE were allowed sell off OUR land in Donnybrook when we would have loved a 5000 unit asylum reception centre built there given RTE's concern about this "issue" over the last few years,,
The same entities described above describe it as NIMBY when somebody else objects.

Concerning Amadan O'Riordan objecting in Raheny, where is he proposing that young people who grow up in Raheny live ? In some sinkhole kip like Navan, Portlaoise or Gorey ?

What does that do for Ireland's "carbon footprint".
 

Hitchcock

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Isn't there a gaping logical lacuna between the two paragraphs quoted above?
Absolutely not - ...read it again, think about it, think about the housing crisis, think about what houses are being built and where then come back and let me know if you understand it, it's not terribly difficult.
 

Pizza Man

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Absolutely not - ...read it again, think about it, think about the housing crisis, think about what houses are being built and where then come back and let me know if you understand it, it's not terribly difficult.
Well, as long as your tiny mind is happy with it, then all is well.
 


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