Appeals against land tax adding to house prices, warns O'Flynn

Property developer Michael O’Flynn said an 'unintended consequence' of the new tax is that it will 'add to the cost of housing'. Picture: Denis Minihane

HOUSE buyers could end up paying more for their homes because of the costs incurred by developers seeking to exclude sites from a new land tax, property developer Michael O’Flynn has warned.

Mr O’Flynn, who faces an estimated €1m annual tax bill on land he plans to develop off Dublin’s Naas Road as a result of losing an appeal to An Bord Pleanála, said an “unintended consequence” of the new tax is that it will “add to the cost of housing”.

“We haven’t taken these appeals lightly. I think that there’s an extra layer of work on developers, and on the local authorities, and now An Bord Pleanála, and all of these add to the cost of housing,” he said.

The residential zoned land tax (RZLT), payable from next year, by developers whose sites fall within its scope and who face paying 3% of the market value, is aimed at lands that have benefitted from investment in services and are capable of being developed for housing. 

Mr O’Flynn, a member of the Government's Housing Commission, said while he supported the new tax in principle, it was becoming a tax on residential development.

“If land is zoned, it should become available, and on that basis — as land is our key raw material — why wouldn’t I be in favour of this tax?

However, the way this tax is being implemented, it’s becoming a tax on development, which is only going to add further to the end-purchaser buying houses. This was never intended, nor should it be.”

The O’Flynn Group is among a number of big property developers to have lodged multiple appeals with An Bord Pleanála challenging the inclusion of their lands in maps which designate sites on which the new tax may be imposed from next year.