The Land Value Sharing Bill is on the Government’s list for priority publication in summer 2024. Our Real Estate team outlines the Bill’s likely impact on religious orders that own large parcels of land.
The Government has introduced two key housing initiatives: Land Value Sharing (LVS) and Urban Development Zones (UDZ). These are expected to have a significant impact on owners of large parcels of land such as religious orders.
The first initiative, LVS requires a landowner to share with a local authority 30% of the increase in the value of their land if it is re-zoned for certain uses or is situated in an ‘urban development zone'. Landowners will pay this sum as a condition of a grant of planning permission, with the levy to be used by the local authority for the provision of local public services.
The second Government initiative, UDZ, allows the Government to designate certain lands which are not being utilised and have the potential for significant development for housing and other purposes as “Urban Development Zones”.
Land Value Sharing
The scope of LVS has increased since it was originally presented, and it is now proposed that LVS will apply to existing and newly zoned land.
The timeline for implementation of the LVS is intended to be staggered depending on both the type of land zoning and the date the landowner acquired the lands:
- Residential and mixed-use including residential land acquired on or after 21 December 2021 - Landowners will be required to make LVS Contributions for planning applications lodged from 1 December 2024.
- Residential and mixed-use including residential land acquired prior to 21 December 2021 - Landowners will be required to make LVS Contributions for planning applications lodged from 1 December 2025.
- Commercial and industrial lands - Fall into scope from March 2026. Planning applications lodged from 1 December 2026 will be required to make LVS Contributions.
LVS will only be triggered when planning permission has been granted by a planning authority for land that meets the relevant criteria i.e. land that is rezoned as follows:
- Solely or primarily for residential use
- For mixed use including residential use
- For commercial or industrial uses
- Within an urban development zone, or
- Within a strategic development zone.
LVS is a recognition that the value of land can increase by multiples when it is re-zoned. The 30% contribution will be based on the difference between the market value of the land, the price the land would receive if it was sold with the benefit of zoning, and the existing-use value of the land, the price the land would receive if it was sold without the benefit of zoning.
LVS will not apply to all re-zoned lands and it will not apply to the following:
- A residential development of 4 or less housing units
- A residential development on land of 0.1 hectares or less
- Commercial and/or industrial developments where the net additional floor space is 500 square meters or less and
- Social and affordable housing.
Urban Development Zones (UDZs)
This initiative will require planning authorities or regional assemblies to identify lands suited to development that would be of significant economic, social or environmental benefit to the State and the common good. This is to ensure that unused land is made available for future development. Potential lands will be identified by planning authorities based on specific criteria such as:
- The availability of land,
- the potential for future growth and development, and
- The need for infrastructure and services in the area.
Once designated the lands cannot be rezoned and must be subject to a planning framework and delivery scheme within one year of designation.
Land in UDZs may also be acquired by compulsory acquisition, if the planning authority or the Land Development Agency is of the opinion that the land is required for public infrastructure, facilities or related measures in accordance with the planning scheme. Compulsory acquisition must be done on notice to all affected parties and be subject to an objection process. If an objection is made regarding a compulsory acquisition then the consent of An Bord Pleanala will be required. Compensation shall be payable for compulsory acquired land.
Key takeaways
- LVS will introduce a further planning levy which will be impactful on religious landowners who are (i) considering developing their lands or (ii) seeking to have their lands re-zoned in contemplation of disposal.
- We anticipate that there will be a degree of lands being compulsorily acquired to ensure that the objectives of the UDZ are being met.
In both cases, religious landowners should seek advice to assist their decision making on the steps to be taken.
The Bill is intended for pre-legislative scrutiny in the upcoming Oireachtas session. For more information regarding these initiatives please contact a member of our Charity Law or Real Estate teams.
People also ask
What is Land Value Sharing? |
Land Value Sharing will be a financial contribution attached to a grant of planning permission. It will be based on the increase in the land’s value as a result of it being zoned residential or mixed-use residential. |
What is an Urban Development Zone? |
An Urban Development Zone will be an area designated as being of significant economic, social or environmental benefit to the State. The designation will have implications for what developers can do with the land. |
The content of this article is provided for information purposes only and does not constitute legal or other advice.
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