Irish residential development: Part V, VAT and feasibility inputs

Establish the applicable Part V position

The revised Planning and Development Act 2000, section 96, contains the Part V agreement provisions, including a 20% land-transfer reference and alternative delivery arrangements. It also contains exceptions and transitional provisions. The legal basis is more specific than a rule that every project must sell 20% of its homes at one discount.

For example, section 96(3)(j) describes a 10% reading for specified older permissions and land-purchase dates. Check the permission date, purchase history, exemptions and commencement of any replacement provisions with the planning adviser. Retain the actual local-authority agreement.

Sources: Law Reform Commission, Ireland: Planning and Development Act 2000, revised

Model an agreed fictional delivery arrangement

Assume a fictional 50-home project has an agreed arrangement delivering ten homes to the authority at €250,000 each, while 40 market homes generate €400,000 each. Both figures are assumed developer receipts before separately modelled tax cashflows.

Market receipts are €16m and transfer receipts are €2.5m, totalling €18.5m. This unit mix is an example agreement, not a conclusion that a 20% statutory land requirement always becomes ten homes.

Test the transfer payment date

If the €2.5m transfer payment moves from month 18 to month 24, unchanged project spending leaves €2.5m more to finance for six months. At an assumed 8% simple annual borrowing rate, the timing cost is €100,000.

Confirm valuation, certification, title and completion conditions in the agreement. Do not model the authority’s entire payment on contract signature unless the payment terms support it.

Maintain a separate tax-treatment register

Revenue’s property and construction guidance distinguishes sales, lettings, construction and the Capital Goods Scheme. Record the intended supply, tax base, rate advice, recoverability and repayment date for each material line. This guide does not assign a universal Irish residential VAT rate.

For illustration, a confirmed recoverable €180,000 VAT balance funded for four months at 8% costs €4,800. If part is irrecoverable, that part becomes a development cost rather than a future refund. Use tax-inclusive invoices and net-cost reconciliation consistently.

Sources: Revenue, Ireland: VAT on property

Show the planning and tax assumptions together

The committee schedule should identify the applicable regime, agreed tenure and transfer values, expected receipts and maximum tax funding balance. A change from sale to retention needs a fresh tax assessment as well as a new operating model.

Refresh the sources before land commitment or a permission change. The worked figures demonstrate a funding bridge; they are not current Irish home prices, a local authority offer or a tax opinion.