Tipperary Council says Derelict Sites tax collection target is unfeasible

A Tipperary Town councillor has pressed the county council to set a target of collecting 25% of Derelict Sites levies imposed on owners of rundown properties next year but was told it was very difficult to collect this tax and pursuing cases legally would be very costly.

This was the response Sinn Féin Cllr Annemarie Ryan received at the Council’s annual Budget meeting when she called on management to set this target that she estimated would bring in €130,616 from a potential €522,466 Derelict Sites levy income into the Council’s coffers next year if reached.

Cllr Ryan sought the setting of the target to encourage derelict property owners to upgrade their buildings and as a means for the Council to recoup the €30,000 portion of the operating costs of its derelict and vacant sites team it must fund from its own resources.

The Derelict Sites levy is an annual tax imposed on the owners of derelict properties that amounts to 7% of the property’s market value.

There are currently 85 properties on the county’s Derelict Sites list valued at €7.46m.

Cllr Ryan noted the Council was asking councillors to approve a 5.5% increase in rates at the Budget Meeting on businesses operating in towns where there was a serious level of dereliction.

She noted the revenue collected from the Derelict Sites levy was low and the Council actually recouped no money from the Vacant Sites levy over the past four years. Yet it wanted to charge extra rates to the businesses open next door to such sites.

Clonmel Workers & Unemployment Action Group Cllr Pat English supported Cllr Ryan’s proposal as he believed the Council should be applying more pressure on derelict and vacant property owners.

He cited the examples of two prime vacant properties on Clonmel’s O’Connell Street that formerly housed Heatons and Dunnes Stores branches.

He claimed there was no pressure being put on their owners to do something with these properties or find new tenants for them for the betterment of the town.

Director of Environment & Climate Change Services Eamon Lonergan responded that the Derelict Sites levy has proved very difficult to collect.

He explained the Council comes up against issues ranging from family disputes, court cases and probate issues to the banks being involved in a property.

The Council had thought it would be able to bring in a lot of income from this levy but has not been able to do so.

He pointed out the Council positively engaged with between 40 and 50 per cent of the owners of derelict properties who carry out works such as installing new windows and painting to remove buildings from dereliction.

Mr Lonergan said the Council received legal advice about “going aggressively” on taking legal action against derelict site owners and was advised the authority's “costs would go through the roof” to pursue such a policy.

He said the Council has moved away from this option to look at securing regeneration funding to bring buildings out of dereliction.

Clonmel Cllr John Fitzgerald asked Cllrs Ryan and English if they had any ideas for filling vacant properties? He believed the Government needed to introduce tax incentives.

Cllr Ryan said there were properties in Tipperary Town vacant and derelict for 20 years. She argued there were some properties on the Derelict Sites list the Council needed to compulsory purchase and put them back into use. “Other councils are doing it,” she pointed out.

And she said the owners of derelict properties shouldn’t be allowed avail of the commercial rates waiver scheme.

Mr Lonergan confirmed the Council was going to compulsory purchase a number of properties focusing on those in core business areas. He said the Council could secure Urban Regeneration and Development Fund (URDF) finance to buy properties.

Cllr Ryan pointed out that URDF didn’t apply to towns like Tipperary and Mr Lonergan responded the Council would look at other funding sources for towns that don’t qualify for the URDF finance.

In another bid to encourage the reuse of vacant properties, Cllr Ryan proposed reducing the rates waiver that applies on a sliding scale to qualifying vacant property owners.

She proposed the 100% relief applied to properties with rates bill of €5,000 or less remain in place for one more year and thereafter be cut to 80%.

She also proposed the 80% relief applied to with properties attracting rates bills of between €5,000 and €10,000 be changed to 70% and the 60% relief applied to properties with rates bills over €10,000 reduce to 50%.

Her amendments to the rates rebate scheme were rejected by 31 votes to four.