Just €900 of more than €300k derelict charges collected by Cork County Council

Chief executive of Cork County Council Tim Lucey said all local authorities had experienced challenges in implementing and administering the vacant site levy. Picture: Eddie O'Hare

Cork County Council collected just €900 of €308,000 from charges related to the derelict site levy, a local authority audit has found.

The details are contained in a report by the Local Government Audit Service, which also found the council did not have a countywide centralised register of derelict sites.

Each municipal district has a separate register of derelict sites in their own area, it said.

Cork County Council is not alone in its so-called “extremely poor” collection of the vacant sites levy and its administration of the derelict sites levy.

Introduced in 2017, with vacant site levies to be charged from 2019, the tax was aimed at reducing land hoarding and stimulating the development of housing.

Such levies are said to be a tool in a local authority’s arsenal to improve the housing situation in their city or county but, to date, just a small fraction of the taxes levied on such properties around the country have been collected.

Recently published data via parliamentary question for Limerick shows that €481,950 remains outstanding and uncollected from the vacant sites levy last year.

The local government audit stated: “From 2020, a derelict site levy of 7% is to be charged on January 1 of the financial year following entry onto the council's derelict site register. However, it was noted at audit that Cork County Council did not implement the rate increase for 2020 and continued to levy at 3%.

“During 2020, the council collected just €900 of the €308k due from current year charges and arrears brought forward, necessitating an almost full provision for doubtful debts in [the annual financial statement for] 2020.” 

Doubtful debts

The doubtful debts included in the council’ financial statement was €33.8m in 2020, an increase of €2.2m on the 2019 amount. The audit found the IT systems used don’t have a debt management facility and the absence of aged debt reporting “prevents an accurate, automated and reliable debtor management system”.

In a response to the audit, the chief executive of Cork County Council, Tim Lucey, said all local authorities had experienced challenges in implementing and administering the vacant site levy.

“Some of the specific problems encountered include defining and identifying a vacant site; determining ownership and liability; the appeals process; location of sites and resource implications,” he said.

On the issue of derelict site levies, Mr Lucey said that work was ongoing to address the issue.

“The council [...] has committed to proactively addressing registered derelict sites in 2021/2 and significant work is under way in that regard. The council acknowledges that there is a body of work to be done on updating the existing [municipal district] derelict sites registers and the collection of levies, and this is progressing as a priority.” 

He added engaging with landowners outside of the legislative framework to address the issue of dereliction had also proven to be beneficial.

At an Oireachtas housing committee hearing last week, Department of Housing assistant secretary Maria Graham told TDs and senators there was “clearly a large level of vacancy and dereliction in towns”.

Ms Graham said the Government, with its Housing for All plans, was aiming to address the issue of vacant and derelict properties and to bring them back into housing stock.