Property developers owe over €750m in levies

Written By Unknown on Jumat, 15 Maret 2013 | 22.40

New figures show that property developers owe more than €750m in unpaid development levies to local authorities around the country.

More than half of the total owed to the county, city and town councils, €439m, is due for payment this year, while the balance relates to previous years.

The largest amount, more than €131m, is owed to Fingal County Council, while Dublin City Council is owed more than €106m.

The figures are contained in a response from the Department of the Environment, Community and Local Government to a parliamentary question submitted by Fine Gael TD for Wicklow, Simon Harris.

Speaking on RTÉ's News at One, Mr Harris said that there was an onus on the local authorities to collect development levies on a phased basis.

Mr Harris said that the failure of local authorities had: "resulted from a situation where the tax payer is left to pick up the tab."

He continued: "This is in stark contrast to how our local authorities interact with small and medium businesses in towns up and down this country.

Among the other local authorities owed large amounts of money are Dún-Laoghaire Rathdown County Council (€91m), Cork County Council (€52m), Limerick Co Co (€39m), Kildare Co Co (€34m) and South Dublin County Council (€32m).

Last month it emerged that Wicklow County Council was pursuing home owners in an estate in the county for development levies which had not been paid by the developer.

The council has since dropped its demands for payment after it settled the case with the developer concerned.

Publication of the figures comes as homeowners across the country begin to receive formal notification letters from Revenue about the Property Tax.

The government intends to raise €250m this year from the tax and €500m in subsequent years.

The money will go towards funding local authority services.

In response to the figures, a spokesman for Fingal County Council said they overstate the true extent of the development levy arrears problem.

Director of Services, Gilbert Power, said that the actual amount of arrears owed to Fingal County Council is €6m, considerably less than the €131m contained in the Department of the Environment figures.

He said the disparity was due to the accounting mechanism used to record development levies, which involves developers being invoiced as soon as the planning permission commencement order is issued.

But often, he said, an agreement is put in place to allow phased payment as the units are built.

If the units are not built, then the levies do not have to be paid, but the accounts continue to reflect the total amount owed until the development is either completed or planning permission lapses.

He added that when developers construct public infrastructure as part of a development, the cost of that is often offset against the total development levy bill.

This explanation was echoed by Dublin City Council, which said its true arrears bill was €33.8m, not €106m.

It said collection methods vary between local authorities.

DCC said that last year it collected €8.5m in development levies, the vast majority of this being collected on a phased arrangement negotiated with the applicant.

It added that where negotiations on payment prove unsuccessful it pursues all outstanding balances through enforcement or legal proceedings.


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