Construction levies paid in Dublin up 70 per cent

Levies paid by property developers to

Dublin City Council

increased by 70 per cent last year, signalling a rebound in construction projects in the city.

Just under €13.5 million was paid to the council last year in development contributions levied as a condition of planning permission for commercial or residential developments. In 2012 the council took in just under €8 million in levies, the lowest amount since the scheme was introduced in 2004.

The council has just completed a 10-year analysis of the development contribution scheme, which laid down set rates to be charged depending on the scale of projects, and replaced the ad hoc system where levies were determined by the city or county manager.

Boom
Since 2004 the council has taken in almost €235 million in levies, the bulk of which was taken in during the construction boom years between 2005 and 2008. A further €98.5 million remains outstanding in levies deferred under phased payment arrangements with builders.

In 2004, the first year of the scheme, €7.2 million was collected, but by the next year seven times that amount was taken in, with a closing balance of €42.7 million. The levy pot grew steadily over the following two years, to €51.3 million in 2006 and a height of €51.6 million in 2007.

From 2008 the effects of the construction crash began to emerge with the levy intake more than halving down to €23.6 million, and taking a similar percentage dive to €10.2 million in 2009.

Flagging finances
In 2010 there was an increase, with the amount taken in by the council rising to €15.8 million, but hope that this signalled a return to the days of the construction industry bolstering the council's flagging finances was dashed the following year when the levy intake dropped to €10.6 million, and then down to €7.9 million in 2012.

The levy scheme was introduced in the Planning and Development Act 2000, but did not come into use until 2004. Under the scheme local authorities set contributions to be imposed on developers for public infrastructure and facilities provided by the council generally in its area, whether or not such facilities were of benefit to the particular development concerned.

All local authorities became reliant on development levies during the boom, none more so than Dublin City Council, given the number of major commercial projects and the housing expansion in the city.