“No entry” reads a five-foot high sign at the entrance to Carrig Glas Manor, a historic parkland estate two miles from Longford in the Midlands of Ireland. Behind the Victorian front gate, rows of newly built houses stand empty and forlorn, waiting to be raised, birds circling overhead the only sign of life.
Carrig Glas was supposed to put Longford, an unremarkable market town about 80 miles from Dublin, on the map. A multi-million pound development located on the grounds of the historic home of the Huguenot LeFroy family was to feature a five-star hotel, a golf course designed by a major winner, 320 houses and a helicopter pad.
In 2007, developer Tom Kearns boasted that Carrig Glas would host PGA tournaments by 2011. Instead the Retief Goosen-designed golf course lies unfinished, Daniel Robertson’s fine Victorian Gothic manor house lies is in disarray, and the 100 or so houses that were built are scheduled for demolition. Ireland’s construction-led boom has left a legacy of empty houses and unfinished development, the so-called ghost estates. According to the 2011 Census, 294,000 properties – some 15 per cent of total housing stock – are habitable but vacant.
“Vacancy rates should be around 3 or 4 per cent. We probably have over-supply of about 100,000 houses”, says Professor Rob Kitchin, the lead author of A Haunted Landscape: Housing and Ghost Estates in post-Celtic Tiger Ireland.
The problem is particularly extreme in rural areas in the Midlands: the total number of houses in sparsely populated counties Longford, Cavan, Roscommon and Leitrim increased by 50 per cent between 2002 and 2009. Many of these properties now lie vacant on desolate ghost estates.
“In some places, particularly near cities, these empty houses will be filled but in many other places they will still be empty in 10 years time,” says Prof Kitchin.
A cash-strapped Irish government has so far pledged just €5 million (£3.2m) to address the problem of around 2,800 unfinished housing developments.
Now, plans to introduce a highly controversial graduated residential property tax for Irish homeowners have caused a further problem for the market.
Prime minister Enda Kenny is hoping to replace a €100 (£64) household charge introduced in this month’s budget with a more extensive property tax that is expected to net around €500m (£320m) per year.
“We have introduced a special group to report to the minister by the end of March on the structure of the property tax and how that will be based,” Mr Kenny said on Thursday. Ireland is obliged to introduce the residential property tax in 2013 under the terms of the bailout agreement signed with the International Monetary Fund, European Union and European Central Bank in 2010. The new tax would provide around one-third of the €1.1 billion (£704m) in increases tax revenue mandated by the IMF/EU deal.
At present, Ireland is the only country in the EU without an equivalent property tax.
But the tax has provoked anger in some quarters at a time when Ireland’s economic outlook remains decidedly gloomy.
Socialist Party TD [Member of Parliament] Joe Higgins criticised the charge. He said: “People in quite modest ordinary homes, on low to middle incomes, will now be liable for substantial taxes.” Mr Higgins, who opposed last year’s bailout, added that pressure from the EU and IMF will see the tax “grow quickly to €1,000 (£640)”.
The new tax could fuel growing Eurospectisim in Ireland. According to recent polls by Comres, just 37 per cent of the Irish population believes the country should remain in the eurozone indefinitely.
Residents on ghost estates will be exempt from any property tax but face a host of other problems. “There are all kinds of issues on these estates, from property developers going bust to lack of maintenance to anti-social behaviour,” says Prof Kitchin. “The government is just hoping the problem will go away – but it won’t.”