Mr. Aidan O'Hogan:

Could I start with that question? We have no opposition to a tax on the benefit or value that is attached to the land through the zoning. We are not opposed to that in principle. The point we are making is that there is a disincentive because the windfall tax at 80% is so great. Even if people's land is rezoned, the level of tax is so great that it stops people selling. What we are trying to advocate, and the reason we picked 33%, is that it is the CGT rate. That is the only reason we picked that figure. It was to get to a level at which people feel it is worth their while to sell, particularly agricultural land. If people are going to pay 80% of the added value in tax, they will ask why they would bother doing that and whether it might be better to hold on to it. In particular, if it is rezoned, one is better off holding on to it. There is no incentive to sell it.

We want to flush more land into the market and that will help reduce prices and land prices by reducing that tax, which has apparently generated no revenue since it was introduced. Certainly we have not been able to get any figure from the Revenue Commissioners regarding any tax generated by this levy. Hence we are saying that we should reduce it to a significant level and the CGT level seems to be a proper one. There will still be levies so the local authorities will be getting money once it is developed.

Deputy Mulherin also asked about social housing and the funding of social housing. Unquestionably, there is or would be funding available from the private sector for social housing but it will have to be in fairly large tracts of land. It will not be available within the context of Part V where somebody is developing two or three houses. However, there would be institutional funding or funding through real estate investment trusts for, say, 100 social houses which are together but that must be managed by leasing through a housing agency or by a local authority. However, the capital funding in this market is definitely available if it is packaged in the right way. There is no question about that.

The reason derelict sites are not being developed is because it is either not viable to develop them, namely, the economics do not work, because most of these sites are in very poor locations, and I have some direct experience of this, or frequently there are problems with titles that are unresolved in many cases. Local authorities have compulsory purchase powers under the Derelict Sites Act.

However, they rarely seem to exercise those powers and, frankly, they could easily exercise them at almost no cost by compulsorily purchasing the land and re-selling it with a clean title where there is a title problem, because a CPO starts the title with a clean folio from scratch. It wipes all the defects instantly and, therefore, there definitely is scope for local authorities to get in there. By the time they have to pay for the land under the CPO, they could have it resold to a developer. If the Derelict Sites Act 1990 were fully operational under local authorities, it would have the ability to sort out many of these issues. I will leave the other issues to my colleagues.