Real Estate
PROPERTY LEGISLATION
Commercial Rates
The Government has enacted the Historic and Archaeological Heritage and Miscellaneous Provisions Act 2023 (the “2023 Act”) which amends certain provisions of the Local Government Rates and other Matters Act 2019 (the “2019 Act”).
Certain sections of the 2019 Act were problematic because they did not achieve the stated objectives set out in the Act’s explanatory memorandum. The Department of Housing, Planning and Local Government confirmed that the relevant sections of the 2019 Act were at odds with the Government’s intention. The problematic sections of the 2019 Act include:
- Section 13(1): This section obliges owners of relevant property to pay any rates imposed under the 2019 Act (plus accrued interest) to the local authority before the sale of the property. This would effectively shift liability for the payment of rates from the occupier to the owner which would significantly impact investment property sales.
- Section 14: This section provides that any rates levied by a rating authority which are due and unpaid will remain a charge on the property, without a time limit, until such time as the rates are paid in full.
The 2023 Act introduces the concept of the ‘liable person’ for rates payment purposes and recognises that a person can cease to be and become a liable person. A ‘liable person’ can be:
- the occupier of the relevant property on the first day of the local financial year to which the rate applies; and
- if the relevant property is unoccupied on that day, the person who is for the time being entitled to occupy the property on that day.
Essentially, the aim of the 2023 Act amendments is to clarify that, where an owner is selling property, they are only required to pay rates for which they are responsible as the ‘liable person’. The 2023 Act also provides for the apportionment of rates where a liable person ceases to be a liable person and for a rates bill to be given to a liable person or a subsequent liable person.
Sections 13 and 14 (and other as yet un-commenced sections) of the 2019 Act come into operation on 1 January 2024. Section 12 (interest on overdue payments) comes into operation on 1 January 2025. The sections of the 2023 Act which amend rates legislation as set out above also come into operation on 1 January 2024.
Screening of Third Countries Transactions Act 2023
As referenced in the construction section, the Screening of Third Country Transactions Bill was signed into law on 31 October 2023. The press release states that it is intended that the new screening mechanism will come into force in Q2 2024. We understand that the Department of Enterprise, Trade and Employment is drafting guidance setting out further detail regarding criteria for the screening regime. Our fuller briefing is available here: An Overview of the Proposed Foreign Investment Screening Regime in Ireland.
Government Autumn 2023 Legislation Programme
The Government published the Autumn 2023 Legislation Programme. Property-related legislation for priority publication in this session is listed below.
- Land Value Sharing Bill: To permit the State to secure a proportion of the uplift in land values resulting from zoning and designation to facilitate the provision of infrastructure. PLS has taken place, awaiting report.
- Residential Tenancies (Right to Purchase) Bill: To allow tenants in rental properties a first right of refusal to purchase a property when it is put forward for sale. Heads are in preparation.
- Planning and Development Bill: To review and replace the Planning and Development Act 2000 with a consolidated Bill improving the clarity and structure of current code. The draft Bill was approved on 13 December 2022. PLS is complete.
Property-related legislation for priority drafting in this session includes the Housing (Miscellaneous Provision) Bill which provides for miscellaneous amendments and additions to the Housing Acts in respect of social housing; overcrowding; regulation of AHBs; and homeless supports. Heads are in preparation.
All other property-related legislation in the programme is listed below.
- Registration of Short-Term Tourist Letting Bill: To provide for new regulatory controls requiring short-term and holiday lets to register with Fáilte Ireland with a view to ensuring that houses are used to best effect in areas of housing need. Work is ongoing.
- Heat Bill: To establish a regulatory model for district heating that ensures consumer protection and the delivery of a vibrant district heating industry, and to mandate all public sector buildings and facilities to connect to district heating where it is available and is technically, and economically feasible. Heads of Bill were approved in July 2023 and drafting is ongoing.
- Fire Services and Emergency Management Bill: To consolidate and update the Fire Services Act and underpin current established emergency management practice at national and local level. Work is underway.
- Remediation of Defects in Apartments and Duplexes Bill: To provide for the establishment of a remediation scheme for apartments and duplexes with fire safety, structural safety, and water ingress defects, constructed between 1991 and 2013. Work is underway.
- Property Services Regulation (Amendment) Bill: To revise the Property Services Regulation Act 2011 in the light of the Services Directive 2006/123/EC and Recognition of Professional Qualifications Directive 2005/36/EC and related ECJ jurisprudence following an EU-PILOT query. Heads are in preparation.
- Industrial Development (Miscellaneous Provisions) Bill: Originally to provide that IDA Ireland would be permitted to establish and participate in corporate partnerships, with the sole purpose of developing critical industrial and commercial property in regional locations. This Bill also contains three additional unrelated amendments in respect of Enterprise Ireland and the Health and Safety Authority. Revised heads are in preparation.
PROPERTY TAXES
Stamp Duty on Residential Leases
As well as providing further detail on measures announced on Budget Day, the Finance (No.2) Bill 2023 increased stamp duty exemption for short-term residential leases (for a term of less than 35 years) from €40,000 per annum to €50,000 per annum.
Residential Zoned Land Tax (RZLT)
Section 88 of the Finance (No.2) Bill 2023 amends Part 22A of the Taxes Consolidation Act 1997, which provides for RZLT. The changes include:
- the exclusion from the scope of RZLT land which, while zoned for residential purposes, is subject to land management objectives in the relevant local authority development plan or local area plan which have identified such land for phased, and not immediate, development;
- the deferral of the first liability date for RZLT by one year, such that, for land which met the relevant criteria on 1 January 2022, RZLT will first be due on 1 February 2025;
- the provision of a further opportunity to landowners whose land will appear on a draft revised final map to be published on 1 February 2024 to request the rezoning of such land from the local authority in whose functional area the land is situated (so landowners will have another chance to make submissions on the inclusion of their land on local authority maps);
- the extension of the existing opportunity to defer RZLT should the variation process, by which such rezoning may take place, not be concluded by the next return date for RZLT;
- provision for the publication of a final map and the publication of a revised final map on an annual basis, beginning on 31 January 2025;
- the refining of the amendments which a local authority may make when preparing and publishing a revised final map going forward; and
- further technical amendments to provisions within Part 22A of the TCA 1997 to support the efficient administration of the tax.
For more, our briefing is available here: An Overview of Key Changes Contained in Finance (No 2) Bill 2023 - Arthur Cox LLP