Developer Michael O’Flynn has called for a radical rethink of how housing is delivered if a new government is to have any hope of addressing the housing deficit.
Writing today in the ‘Irish Examiner’, the chairman and CEO of the O’Flynn Group, says certain proposed legislative changes would act as an impediment rather than a stimulus to housing delivery. He says this includes the Land (Zoning Value Sharing) Bill where the State would secure 25% of the uplift in value of land, following its zoning for residential use.
The new Bill is “a prime example of policymakers lacking understanding of the impact of their proposals”, the developer said.
“It ignores the fact that currently 33% is already captured through capital gains tax, as well as the 20% captured by means of Part V Social and Affordable housing provisions.”
Taken together with development contributions, Vat paid on serviced land and Vat paid on new homes, Mr O’Flynn says the tax take by the State from new housing far exceeds “100% of the uplift in the value of the underlying land”.
The upshot of the new tax would be to add to the cost of homes, he warns.
He says the proposed tax is “causing turmoil in the market and is currently driving up the value of land with planning permission and reducing the incentive to sell or buy zoned land”.
“It is adversely impacting investor appetite for housing in Ireland. It beggars belief that our policy makers do not understand the seriousness of the damage they are causing by this proposal,” Mr O’Flynn says.
Mr O’Flynn is critical of the Residential Zoned Land Tax — on land zoned for housing but not built on — which will be charged from February 1, 2025.
“Introduced in the mistaken belief that there are thousands of acres of zoned land that were deliberately not being built on, all it has done is to scare away investment and make houses more expensive,” he says.
The new Planning and Development Act comes under fire too.
“We were promised that the new act would bring about radical and meaningful changes in our planning system,” he says.
“The consensus in the industry is that there is very little in it that will make a positive difference and some provisions take us a step backwards”, adding that “this tolerance of bureaucratic failure must stop”.
Mr O’Flynn says the incoming government “could do worse“ than urgently consider the proposals of the Housing Commission, of which he was a member, and which delivered its report earlier this year.
“The question now is, will the new government take a bold approach or continue down the same path which simply cannot deliver,” Mr O’Flynn says.
Michael O’Flynn calls for radical rethink of housing policy
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