649B Windfall gains from rezonings: rate of charge

Summary

This section provides that an 80% rate applies to gains attributable to a relevant planning decision. Such a decision has two elements, i.e. a rezoning and a decision to allow a material contravention of a development plan. A rezoning means a change under the Planning and Development Act 2000 from non-development land use to development land use. This change is one from agricultural and amenity uses to residential, commercial or industrial uses or a mixture of such uses. The section applies to disposals made in the period beginning on 30 October 2009 and ending on 31 December 2014.

Details

(1) The terms used in the section have the following meaning:

“development land use” means residential, commercial or industrial uses or a mixture of such uses;

“loss arising on rezoning” means a loss realised on or after 30 October 2009 on a disposal of land to the extent to which that loss is attributable solely to a decrease in the market value of land arising on a rezoning where such loss has not been effectively relieved;

“non-development land-use” means a land-use which is agricultural, open space, recreational or amenity use or a mixture of such uses;

“relevant planning decision” means —

• a change in the zoning of land in a development plan or a local area plan made or varied under Part II of the Act of 2000 from non-development land-use including a mixture of such uses, or
• a decision to grant permission in accordance with section 34(6) or 37(2) of the Act of 2000 for a development that would materially contravene a development plan;

“windfall gain” means any increase in the market value of land which is attributable to a relevant planning decision.

This section applies to a disposal of development land that —

• (2)(a) has been the subject of a relevant planning decision since it was acquired by the person making the disposal,
• (2)(b) was acquired from a connected person and the acquisition cost for the purposes of the Capital Gains Tax Acts was other than market value, where the relevant planning decision occurred during the period during which it was owned by either person, or
• (2)(c) was the subject of a sequence of transfers between connected persons if the relevant planning decision took place during the period between the date of disposal and the latest date at which the acquisition cost, at any step in the sequence, was market value.

(3) The rate of capital gains tax in respect of a chargeable gain which is the lesser of the gain arising to a person on a relevant disposal to which this section applies is 80%.

This section does not apply to a disposal of land to which subsection (2) applies where —

• (4)(a) the land is disposed of to an authority possessing compulsory purchasing powers but only if the Revenue Commissioners are satisfied that the disposal would not have been made but for the exercise of those powers or the giving by the authority of formal notice of its intention to exercise those powers,
• (4)(b) the disposal is a disposal by a company referred to in section 616(1)(g) (i.e. a 75% subsidiary of the National Asset Management Agency and any other company which is a 75% subsidiary of the first-mentioned company), or
• (4)(c) the disposal is the disposal of a site of 0.4047 hectares or less whose value on the date of disposal does not exceed €250,000, other than where the disposal by the person making it or by a person connected with that person forms part of a larger transaction or series of transactions.

The rate of capital gains tax in respect of a chargeable gain on a relevant disposal to which the above provisions apply will be 25%.

(5) Any loss accruing on any disposal will not be deducted from a chargeable gain to which this section applies, apart from a loss arising on a relevant planning decision.

(6) This section applies to relevant disposals made in the period beginning on 30 October 2009 and ending on 31 December 2014.

Relevant Date: Finance Act 2021