Consumers Association recommends an annual tax on development land

The Consumers Association of Ireland (CAI) has called for an annual tax on development land and says the National Development Plan is a "charter for land speculators and environmental despoilation".

Ms Emer O'Siochru, housing and environment spokeswoman for the CAI, claims "ducking such an initiative will lead to further widening of the gap between the very wealthy and the majority of Irish citizens. It will also lead to the waste of good agricultural land, ugly living and working environments and costly growth in greenhouse emissions."

Ms O'Siochru told The Irish Times an annual land tax would encourage builders to develop quickly and would discourage people from holding land. However, the Irish Builders Association says such a move would lead to further increases in the value of land. Mr Ciaran Ryan, director of the association, says it is a misconception that builders have a hoard of land ready to be used. Delays were caused by a lack of services and planning actions. He acknowledges that a number of government initiatives are beginning to take effect. CAI says the social equity and balanced development promised in the National Development Plan cannot be delivered and argues that special measures are needed to regulate the market in development land and recoup some of the value created by infrastructural investment for the community.

Replacing some income and capital taxes with an annual tax on development land "is the most efficient and equitable method of ensuring affordable and sustainable housing development in the Irish context", according to CAI. An annual development land tax, it argues, has "manifest advantages" over the compulsory purchase proposed in the Planning and Development Bill.

CAI doubts National Development Plan targets can be achieved without special measures to regulate the development land market. The plan will add fuel to the existing land-use pattern. "This outlook is compounded by unprecedented demand for housing which has further inflated development land prices, creating even greater profits for landowners, from averaging roughly 10 per cent to 15 per cent in the 1980s, site costs now average 50 per cent of the total price the house buyer pays for their home."

CAI has claimed that young couples must now devote two working lifetimes to buy a house while their parents could buy with one salary over 15 years.

The measures to address housing affordability in the proposed Planning Bill are "inadequate and seriously flawed". While it notes that some suggested amendments have been accepted, it says the measures will be too late to be effective.

The proposed development tax would apply only to undeveloped green and brown-field sites the value of which has increased without any input from the owner. Such taxes, it says, have been successful in other countries, such as Denmark, Australia and South Africa.

It believes such a tax here would be quick to implement, easy to administer, would deliver better designs and community amenities, and would help young farmers.