State urged to levy windfall gains

Taxation: The State should use taxation or development levies to claw back windfall gains made by developers if their property is rezoned, the committee found.It said the State should recoup for the community the "betterment" that arose from planning decisions and the State's provision of physical infrastructure.

The committee said this could be achieved through levies or taxes on the gains from increases in value or through an annual site value tax.

"The betterment recovered would provide resources to enhance the amenities available to local communities," the committee said.

It also suggested a system of "planning gain" agreements, under which developers would be required, as part of the grant of planning permission, to provide infrastructure.

"Some of these measures are already being employed. However, they do not operate to control the price of building land," said the report.

In addition, the committee called for "special interventions" to provide more scope for social and affordable housing.

Stating that planning levies should be used to part-fund the provision of such housing, the report said that Section 48 of the 2000 Planning and Development Act should be amended to include social housing under the definition of "public infrastructure and facilities".

This would empower local authorities to include part of the cost of social housing in their determination of development levies. The report also said local authorities should reserve land in their development plans for social and affordable housing.

It said public bodies "should not have to pay the full market value of the land acquired" for social housing.

It said there was a need for formal land use planning designed to manage and regulate the market for property resources in urban areas.

"When planning authorities are adopting their development plans they should ensure that sufficient land is zoned to meet the anticipated needs for the duration of the plan. They should anticipate delays in bringing serviced and zoned land to the market."

The committee also called for State or independent regulation of auctioneers and estate agents who generate, supply and promote market information.