Tax exemption for new car parks to end, councillors agree

New car parking spaces in Dublin City could no longer be exempt from a tax break under an amendment agreed to by city councillors at this month’s council meeting.

Currently, construction projects in the city are subjected to a Development Levy which is a tax for every square metre of a new commercial or residential development.

The levy fund is the used to help pay for public infrastructure such as roads, drainage, parks, community facilities, and urban regeneration.

However, certain developments are exempt from the levy, such as playgrounds, parks, non-profit creches and the first 40 sqm of a new home.

Green Party councillor Michael Pidgeon says that “bizarrely” new car parking spaces are also included on the list of exempt projects.

“So, if someone is building a new shop, we would put a tax on the shop development, but apply zero tax to the car park. Totally wrong incentive and signal to send,” Pidgeon says.

Pidgeon says the matter was first raised in 2019 but “got nowhere.”

However, last week councillors agreed to an amendment to the Development Contribution Scheme 2023 – 2026, which attaches conditions to planning permissions when approved by the council.

Under the amendment, commercial car parks will be taxed the same as any other commercial development and residential parking spaces will be taxed at 25 percent of the residential rate.

“The reason we did a residential rate at a lower level was to avoid putting significant extra development costs on residential units (already a big problem), but to start shifting towards coherent taxation of car parking,” Pidgeon says.

“In the debate tonight, there was cross-party consensus that commercial car parking should be subject to these levies but some (mainly FF, FG, Inds) were against the change to residential levies.

“I don’t agree, but understand their issue,” he says.

The amendment, tabled by Green Party councillors said the tax exempt was “giving the wrong incentive for developers.

“There will always be the need for some parking, but we should not charge housing development the full rate while giving parking a cut,” it says.

“In future, it may be preferable to charge more for car parking spaces and thus lower the costs of housing/commercial development, but the amendment aims to make the change in a way which does not radically overhaul or delay the scheme.”

The Development Contribution Scheme 2023 – 2026 will go out for public consultation in the new year.