The Digital Hub Development Agency (DHDA) is facing the "unintended consequence" of paying a €575,000 Residential Zoned Land Tax (RZLT) bill this year on properties at its campus in Dublin's Liberties.
That is according to the CEO of the DHDA, Fiach Mac Conghail, who has told the Public Accounts Committee that the €575,000 RZLT bill is in addition to the DHDA being levied €1.63m by Dublin City Council under the Vacant Site Levy (VSL) regime for one warehouse property on Watling Street in Dublin 8 over a seven year period.
The combined cost of the two "land-hoarding" taxes on the DDHA is €2.2m.
In his letter to the PAC, Mr Mac Conghail said the DHDA was last year levied €315,000 by Dublin City Council for the Watling Street warehouse property and this followed a levy of €315,000 in 2023.
Mr Mac Conghail provided figures showing that the site has been subject to the Vacant Site Levy since 2018.
The vacant site levy is imposed at a rate of 7% of the value of the Watling Street site, which Dublin City Council put at €4.5m.
In 2021, the Government decided to dissolve the DHDA and transfer lands to the Land Development Agency (LDA) to be used for the development of affordable housing.
In his letter, Mr Mac Conghail said that the LDA is making significant progress with its "Pear Tree Crossing" masterplan and is expected to make a planning application to Dublin City Council in the first quarter of 2026.
"We are fully supportive of this LDA housing project. It is expected that the relevant lands currently owned by the DHDA will be transferred to the LDA in 2026. This will also include the Watling Street Warehouse property which is subject to VSL," he said.
"We are currently exploring the possibility of the remaining occupied properties being transferred to Dublin City Council," he said.
"Our parent department decided that the DHDA will remain open and operational until at least the end of 2027 to facilitate the dissolution process," he added.
The VSL has been replaced this year by Residential Zoned Land Tax (RZLT) which aims to activate land that is serviced and zoned for residential or mixed use to increase housing supply and ensure regeneration of vacant and idle lands in urban locations.
Mr Mac Conghail said: "The unintended consequence for us is that it will increase the tax liability on these properties until such time as they are transferred to the LDA. DHDA is subject to RZLT of €575,000 for this year."
Reporting by Gordon Deegan
