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Development of housing estate and planning

  • 23-11-2013 10:34PM
    #1
    Curious Geroge
    Registered Users, Registered Users 2 Posts: 1,017 ✭✭✭


    Discussed this last night and alot of 'opinions' so I'll put it to the forum. Developer buys land and gets planning for 20 houses. This in turns means he has 20% social and affordable housing to provide or as pay off to the local council. That seemed to get full agreement. Then the argument /discussion, did the developer then also have to pay development levy on each house or is there a a single payment if the developer builds them and pays tax on the profits.


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  • #2
    Corkblowin
    Registered Users, Registered Users 2 Posts: 622 ✭✭✭Corkblowin


    Curious Geroge wrote: »
    Discussed this last night and alot of 'opinions' so I'll put it to the forum. Developer buys land and gets planning for 20 houses. This in turns means he has 20% social and affordable housing to provide or as pay off to the local council. That seemed to get full agreement. Then the argument /discussion, did the developer then also have to pay development levy on each house or is there a a single payment if the developer builds them and pays tax on the profits.

    As you say, the developer gets planning for 20 houses and has his 20% social and affordable to agree with the council (by providing land, houses, cash or a combination of all 3). He also has to pay the same development levy as a person getting permission for a one-off, based on the floor area of each house. It may be put into the conditions as a lump sum but is calculated based on rate per sq.m x 20 houses. Often developers get hit with other requirements such as providing land to the council for free for road widening or whatever.

    Then obviously its VAT on all building materials, tax on the workers wages and tax on any profit on the houses (not sure how it works if its reinvested into another development or left on the companys books).

    Thats one of the reasons why no development is happening around the country, the cost of actually building the house is more than prices in many locations, or else people are going self build (and not complying with all building regs or health & safety requirements) which makes it appear much cheaper.


  • #3
    Curious Geroge
    Registered Users, Registered Users 2 Posts: 1,017 ✭✭✭Curious Geroge


    That did seem to be where it ended. The chat started as a developer built half and couldn't finish and as the paper's said this year, not too many developers paid the social and affordable payment so it remains unpaid, houses built and sold but sites now remain. What responsibility does a buyer of a site in the development have if they need to re apply for planning; looks like the development levy would be required but is the social and affordable housing charge payable by an individual not building to profit.


  • #4
    Corkblowin
    Registered Users, Registered Users 2 Posts: 622 ✭✭✭Corkblowin


    In general the method of the social and affordable provision would have to have been agreed prior to commencement but, as you say, many developers would have agreed to pay the money on receipt of the proceeds of sales. If he went bust then not all monies would be paid.

    Theres no hard and fast rule that can be applied to deal with these issues. However if a developer has gone bust, the site is gone somewhere - NAMA, receiver, bank etc - and it should be up to them to sort out issues for the overall site before selling off bits of it. If the social and affordable and the contributions have not been paid up then the houses that have already been sold are not in compliance with the planning permission.


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