80% Windfall Tax: Implications

Sponge Bob

The NAMA bill grinding thru the Dáil contains a proposal to slap rezones with a windfall tax of 80% . Reference is made to it here . I think the precise wording has not been released yet and will be introduced at committee stage some time soon.

However if the wording is loose...as would be expected given that it is a green party anti development clause....then there is a risk that no landowner will co operate with any national infrastructural development for fear of getting slapped with an 80% tax bill.

Building giant estates of semis in small villages is not a national objective and should indeed incur an 80% windfall penalty for someone.

What classes of development should be exempt and under what conditions ??

Sponge Bob

Sponge Bob wrote: »

The NAMA bill grinding thru the Dáil contains a proposal to slap rezones with a windfall tax of 80% . Reference is made to it here . I think the precise wording has not been released yet and will be introduced at committee stage some time soon.

However if the wording is loose...as would be expected given that it is a green party anti development clause....then there is a risk that no landowner will co operate with any national infrastructural development for fear of getting slapped with an 80% tax bill.

Building giant estates of semis in small villages is not a national objective and should indeed incur an 80% windfall penalty for someone.

What classes of development should be exempt and under what conditions ??

Stable door and horse bolting springs to mind!!!!

medoc

Sponge Bob wrote: »

The NAMA bill grinding thru the Dáil contains a proposal to slap rezones with a windfall tax of 80% . Reference is made to it here . I think the precise wording has not been released yet and will be introduced at committee stage some time soon.

However if the wording is loose...as would be expected given that it is a green party anti development clause....then there is a risk that no landowner will co operate with any national infrastructural development for fear of getting slapped with an 80% tax bill.

Building giant estates of semis in small villages is not a national objective and should indeed incur an 80% windfall penalty for someone.

What classes of development should be exempt and under what conditions ??

I agree in theory with the proposals subject to a few points. If a farmer or any land owner has land CPO'ed for a large project of public interest eg a road it should be exempt. But will it stop develpment on the edges of large towns if people wont sell for housing estates or business parks. It wont be a problem for a few years but when the suitable land is gone, then what? Would it be possible or even fair to pick larger towns and allow propper zoning and development to take place,subject to propper integerated planning without imposing this tax and only impose it if local authorities go against propper guidelines in smaller towns and villages. I also think that one off housing sites sold should be taxed at 80% unless they are for family members of the land owner and who should have to live in them for x years to be exempt.

ForiegnNational

medoc wrote: »

It wont be a problem for a few years but when the suitable land is gone, then what?

I wouldn't worry about it, according to the Independant, Ireland has enough zoned land already for an additional 3 million people, or 22 years of normal growth:
Councillors zone enough land to build homes for three million

On a separate issue, is it only me that has a fundamental issue with the following:

medoc wrote: »

I also think that one off housing sites sold should be taxed at 80% unless they are for family members of the land owner and who should have to live in them for x years to be exempt.

Only since I have been in Ireland have I met this "It's my land, it's my right" policy. There are no such automatic rules for development that I am aware of throughout the rest of Europe. This approach only ever leads to the one-off housing that has blighted rural Ireland (oh and an absolute lack of public footpaths!)

I myself live in exactly an example of this (plot built on the family farm by my wife's uncle and aunt), but this automatic right will have to cease if planning is ever to lead to cohesive strategies, such as the provision of infrastructure such as schools, water and sewerage.

medoc

ForiegnNational wrote: »

On a separate issue, is it only me that has a fundamental issue with the following:



Only since I have been in Ireland have I met this "It's my land, it's my right" policy. There are no such automatic rules for development that I am aware of throughout the rest of Europe. This approach only ever leads to the one-off housing that has blighted rural Ireland (oh and an absolute lack of public footpaths!)

I myself live in exactly an example of this (plot built on the family farm by my wife's uncle and aunt), but this automatic right will have to cease if planning is ever to lead to cohesive strategies, such as the provision of infrastructure such as schools, water and sewerage.

Do you want farmers living in town and heading out in the morning to work, some amount of one off housing will be required.

medoc

medoc wrote: »

Do you want farmers living in town and heading out in the morning to work, some amount of one off housing will be required.

There's enough one-off housing available to satisfy farmers requirements for the bast part of this century! Anyway, there's unlikely to be a ban on replacement housing.

CerebralCortex

medoc wrote: »

Do you want farmers living in town and heading out in the morning to work, some amount of one off housing will be required.

Well Ireland needs bigger population centers and the days of farming as a way of life are disappearing which I think is good.

ForiegnNational

medoc wrote: »

Do you want farmers living in town and heading out in the morning to work, some amount of one off housing will be required.

Sorry medoc, you are speaking to a Farmers son here...

My oldest brother has inherited the farm as he is the one that works there. There is no right (at least in the UK) for me to build another house on the farm, just because I am the son of a farmer...

The automatic right to build (at least) three new houses, in ADDITION to the existing primary farm dwelling is something that is unique only to Ireland.

Carawaystick

medoc wrote: »

I agree in theory with the proposals subject to a few points. If a farmer or any land owner has land CPO'ed for a large project of public interest eg a road it should be exempt.

I thought cpo'd land only got existing use payments so the windfall doesn't arise.

medoc wrote: »

But will it stop develpment on the edges of large towns if people wont sell for housing estates or business parks. It wont be a problem for a few years but when the suitable land is gone, then what? Would it be possible or even fair to pick larger towns and allow propper zoning and development to take place,subject to propper integerated planning without imposing this tax and only impose it if local authorities go against propper guidelines in smaller towns and villages.

I thought the windfall tax was on the proportion of the gain in value caused by the rezoning.
so you have a hectare of agricultural land worth 25,000 it gets rezoned to some zone with a higher value, say 1,025,000 you are taxed at 80% on the extra million in value from the rezoning and you pay your normal tax on the agricultural 25k. The rezoning is a gift from the state, it's not like you made the land increase in value from the sweat of your brow.

Sponge Bob

Sponge Bob wrote: »

However if the wording is loose...as would be expected given that it is a green party anti development clause....then there is a risk that no landowner will co operate with any national infrastructural development for fear of getting slapped with an 80% tax bill.

And sure enough, exactly as predicted.

http://www.nuachtchlair.com/80-windfall-tax-blamed-for-claregalway-school-site-delay/

EFFORTS to secure a site for a new Secondary School in Claregalway are being hampered by the tax implications faced by landowners who have suitable land.
The issue was raised at a meeting of County Galway Vocational Education Committee this week, where members suggested that a windfall tax of 80 per cent, applicable where land is rezoned, was deterring landowners from selling a site to the Department of Education.

Irish and Proud

Deleted User wrote: »

Stable door and horse bolting springs to mind!!!!

Indeed, but the horse has long since bolted, so I think the initiative is more about lessons being learned for the future. Never again must a runaway cycle of sheer greed be allowed happen again - after all, we don't want to be singing Frankfurt's tune again given the current crisis as a result of the bubble. Also, I don't want this country looking like a kip as it did 5 years ago! My only fear is the risk of the initiative being watered down. 80% is right - how is it fair that some people can make obscene amounts of money out of thin air.

Irish and Proud

Sponge Bob wrote: »

And sure enough, exactly as predicted.

http://www.nuachtchlair.com/80-windfall-tax-blamed-for-claregalway-school-site-delay/

Are the developers doing it again - IIRC Bertie's government seemed to succumb to "no more houses will be built" in response to a measure to take some of the heat out of the property market. IMO, these bully boy tactics should be resisted at all costs. OK, no school ATM, but the National Interest must take priority.

Regards!

SeanW

I've a question about this windfall tax.

Suppose a farmer has some land at the edge of a town, that he/she has no intention of building on per se. Then also suppose the local authority rezones it (and perhaps other lands as well), without asking the original landowner, as part of a plan to expand the town over time.

Does the farmer immediately have to pay the windfall tax? And if so, and he/she doesn't have it, what then?

antoobrien

Irish and Proud wrote: »

Are the developers doing it again - IIRC Bertie's government seemed to succumb to "no more houses will be built" in response to a measure to take some of the heat out of the property market. IMO, these bully boy tactics should be resisted at all costs. OK, no school ATM, but the National Interest must take priority.

Regards!

It's amazing how the tune has changed on this - a couple of months ago the sites were unsuitable due to either traffic or being in/near the flood plane.

The prospects of a new €15 million secondary school being built in Claregalway have been dealt a huge blow – the Department of Education has dismissed all of the eight sites that were suggested.

And now this is being viewed as mechanism by which the Department can renege on building the 600 school without actually throwing cold water on the project.

A senior source within the Department of Education told the Connacht Tribune that of the eight sites that were submitted, they were all rejected for a variety of reasons.

Last year, a commitment was given to build a new secondary school in Claregalway as the population of the area justified such a facility. A total of eight sites in the area were offered by local landowners.

It was confirmed a number of weeks ago that the Department were close to making a decision on a suitable site but now it has emerged that none of the sites are suitable for the construction of a secondary school.

The source said that one of the sites was located along the N17 and was not suitable from a traffic safety point of view while another was situated too far from the village.

A number of the sites close to the village were deemed unsuitable on the grounds that they were located in the flood plain – despite the fact that extensive flood relief measures were carried out in Claregalway during the course of last year.