Site tax dodgers will not face court action

Site tax dodgers will not face court action
File photo

Cork City Council is to impose vacant site fines to try to stimulate building. Fines will be levied at 7% of site value as the ceiling was more than doubled by Government last year.

The city’s vacant sites register lists 18 properties, including three owned by the council. So far, so good.

The Republic stirs itself and strikes back in a gentle, pardon-me sort of way. Land hoarding is challenged in a community-first process that might help resolve the housing crisis.

However, and as is almost always the case, the dispiriting devil is in the detail.

When it made the announcement, the council had to concede there is no legal basis on which it might pursue property owners who choose to ignore the fines. “This is relatively new legislation,” it said. “Legal proceedings to collect outstanding debt is not a consideration at this time.”

This seems another case of central government imposing an obligation on a local authority without giving it the legislative clout to deliver. When the levy rate was more than doubled last year, did no one in Government consider how the fines might be collected?

Or did they rely on our old, ever-failing hypocrisy — enact legislation but don’t get too excited about applying it?

So, through no fault of the council, this vacant site legislation can be dismissed as ineffective window dressing as it is weighed in favour of those it is designed to challenge.

The social objectives it champions remain beyond practical reach. Once again, Peter McVerry’s chilling assertion that this Government is ideologically incapable of resolving this crisis seems vindicated.

Not only should the relevant authority have the power to collect these fines, it should also be able to set a clock running the moment the fine is issued and increase it by a set percentage every say, quarter, to concentrate the minds of those sitting on badly-needed building land.

After all, if the Revenue Commissioners can impose penalties on errant taxpayers, why not local authorities? There is no difference in the principles involved.

It is of course predictable that property owners, developers, and financiers might recoil from such an imposition but that can, surely, be balanced by the dismay most citizens will feel when they realise that talk about vacant site taxes is, well, utterly vacant.

This is just one of many issues confounding those who seek an equitable, sustainable solution to this crisis, many of which seem almost intractable. The role of finance, the availability of mortgages, has been identified as a contributing factor — hence Central Bank guidelines limiting borrowings.

That issue is the subject of a Bank of England report. Published just before Christmas, it suggests that 40 years of soaring house is a result of historically low interest rates rather than any shortage of homes.

“Nearly all of the rise in average house prices relative to incomes can be seen as a result of a sustained, dramatic, and consistently unexpected, decline in real interest rates,” the bank’s researchers wrote.

Resolving that issue by increasing today’s very low rates makes any difficulties around vacant site taxes seem like small change. It also underlines how tightly the market grips this socially destructive scandal.

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