Reductions to development levies proposed

THE GOVERNMENT proposes to significantly lower development levies and give up to a full exemption to projects that create employment.

Development levies peaked in 2007 at more than €900 million but fell to just under €200 million in 2009. Under draft guidelines to be published tomorrow, the Government proposes that local authorities lower charges associated with planning permission.

There are three types of charges: those associated with general development which benefits from local authority services, such as roads and parks; special development contributions where the local authority has to provide special services, such as a new road or relocation of pipes; and supplementary development contributions which support the delivery of schemes such as Luas extensions or the reopened Cork to Midleton railway.

Before the new schemes come into force, Minister for the Environment Phil Hogan and Minister of State at the Department of the Environment Jan O’Sullivan are to encourage local authorities to collect outstanding charges. These sums could be significant.

An estimated €150 million of the €300 million cost of the Luas Cherrywood extension was to be funded by development levies but much of this has yet to be paid for reasons generally associated with the downturn.

The Ministers will also encourage local authorities to continue to levy charges for water services in advance of the formal handover of services to the new authority, Irish Water.

But the draft regulations provide reductions or exemptions for “sustainable” development schemes which promote jobs. It is proposed that these would include:

* Town centre developments.

* Change-of-use permission which does not require upgraded infrastructure.

* IDA or Enterprise Ireland developments.

* Developments that progress the Government’s jobs initiative.

* Broadband and sustainable-energy initiatives.

However, incentivising employment projects with lower or no contributions would have to be fiscally neutral, according to the guidelines. They also say that “in areas prioritised for development in the core strategy” there should be a complementary adjustment in the rate outside of these areas to ensure no shortfall in the council’s budget.

Commenting on the proposed changes, Ms O’Sullivan said a key aim for future development contribution schemes “must be to promote sustainable development, secure investment in capital infrastructure and encourage jobs and growth”.

“The guidelines also include provisions for a more flexible approach to the payment of development contributions and propose lower rates in areas prioritised for development in a local authority’s core strategy.”

The draft guidelines will be subject to public consultation and final guidelines for local authorities will be published in the autumn.