Fiscal Measures

Demand Management strategies, starting with cities outside GDA and major urban towns.

Finally, and building on the good work that is already underway at a national level (see Chapter 4), the successful delivery of transformative projects and initiatives – particularly at local level - will be heavily dependent on communications, co-creation, and engagement. Communication campaigns and engagement are critical to increasing awareness about the need for, and benefits of, demand management measures and to help mitigate against opposition from businesses and from drivers, and negative media coverage etc– engagement that goes beyond statutory processes, such as those related to under Section 38 of Road Traffic Act or Part 8 of Planning and Development Act (or relevant sections of the Planning and Development Act 2024, once commenced).

Recommendation 5: Update national guidelines and standards in support of demand management measures in relation to road space reallocation and strengthen supporting oversight and co-ordination structures.

Recommendation 6: Enable LAs to prioritise and deliver demand management through greater integration, collaboration and the establishment of multidisciplinary teams.

Recommendation 7: Incorporate demand management principles into Active Travel Schemes while assuring alignment with sustainable accessibility and road safety requirements

Accordingly, a key recommendation of this Strategy is to consider a funding mechanism to support LAs in the delivery of ‘behavioural change campaigns’ at neighbourhood/local community level, through in-house skills enhancement as well as through the procurement of specialists. No such support currently exists.

Recommendation 8: Communications and engagement support for LAs.

Recommendation 31: Establish mechanism to support demand management pilot measures

The full list of recommendations across the whole Strategy is available in Chapter 10.

Demonstration

Fiscal Measures

To support tactical urbanism, and to allow for the real-world experimentation of proposed measures, it is intended to establish a fund to support exemplar pilot projects that can demonstrate opportunities related to demand management, trial innovative interventions, and share best practice to allow for the scaling up of successful projects at a national level. This fund will support the trialing of demand management measures by agencies and LAs so that a best practice approach can be developed, and impactful measures can be accelerated and successfully delivered.

Introduction

Fiscal measures have a long-standing and continuing influence on travel behaviours across Ireland. In the context of this Strategy, fiscal measures can broadly be considered across three primary axes:

1. Incentivising: measures that incentivise and encourage desired travel behaviours and outcomes,

In summary, taking account of the wide range of expert input from this sub-group, the following recommendations have been put forward to help optimise space – for the public good - in urban centres across Ireland.

2. Penalising: measures that penalise and discourage undesired or avoidable travel behaviours and outcomes,

3. Revenue generating measures that increase the available revenue and funding to support the delivery of demand management outcomes.

Recommendation 3: Develop Demand Management Strategies at Local Authority level taking account of delivery of sustainable mobility alternatives.

Individual fiscal measures will encompass at least one, and often multiple of these axes as part of an overall effort to achieve the desired outcomes of the Strategy.

Recommendation 4: Prepare guidance and develop modelling and other supports for Local Authorities on the development of tailored

The implementation of a fiscal measure has the capacity to impact the relative cost of travel between modes, vehicle types, and local areas depending on the approach taken to its design and implementation. Fiscal measures create the opportunity to better capture the external costs (economic, environmental and social costs) of transport so that the ‘user pays’ for the full extent of the impacts they are creating e.g., carbon and air pollutant emissions. Recent research34 indicates the estimated average external costs of driving to be €0.11 per kilometre. Likewise, it is also possible to incentivise behaviours that have positive external impacts. For example, the same research estimates that a kilometre of walking or cycling can lead to an external benefit to society of between €0.18 and €0.37 from improvements in physical and mental health.

Strategy Group Paper 23/07, and the fact that ‘There have been many calls for equalisation of diesel and petrol excise rates in Ireland on environmental and public health grounds.

The Climate Change Advisory Council, the Joint Oireachtas Committee on Climate Action, the European Commission, and the Commission on Taxation and Welfare have made recommendations regarding phasing out this excise gap’35. The Review also considered the potential phasing out of the current Diesel Rebate Scheme (DRS) and the potential to equalise the treatment of businesses ability to reclaim VAT on petrol and diesel. Consideration of these issues are summarised in the associated sub-group report.

Vehicle Taxation (including measures to reduce the weight and size of vehicles)

The measures discussed by this sub-group included interventions which affect the cost of vehicle purchase, ownership and use as well as measures that reduce the cost and barriers associated with more sustainable alternatives, including reducing the need to travel. Measures identified may be most appropriately implemented at either a national or local level depending on their specific characteristics.

The current VRT scheme disincentivises the first registration (i.e. new and 2nd-hand imports) of high-emission passenger vehicles, by applying a vehicle registration tax which varies based on the tail-pipe emissions of CO2 and NOx per km of the vehicles being registered. However, heavy goods vehicles, buses, non-road mobile machinery and other such vehicles (VRT Category C) are not subject to an emissions-based rate and are charged a flat rate of €200. In addition to VRT, drivers also pay motor tax which is an annual charge on motor vehicles registered in the State, which varies according to the vehicle’s CO2 emissions band for private cars.

As with all measures, fiscal measures can both directly and indirectly impact finances and affordability for individuals and businesses. It is therefore essential to fully understand both the macro-and micro impacts of these measures. This includes analysis of the distributional impacts of incentives and penalties to understand which groups within society (social, economic, demographic, or geographic subsets) are benefitting or being unduly burdened by the implementation of fiscal measures. This is a central requirement to ensure the measures implemented support a just transition to a more environmentally friendly and sustainable future for the transport system and its users.

However, it was agreed that other forms of taxation should be explored moving forward. Stakeholders felt that there is merit in estimating the additional ‘cost to society’ externalities of larger/heavier vehicles, including their increased emissions of particulates from tyres and brakes, traffic noise, their need for additional roadspace (parking and lane width), the severity of injuries caused to pedestrians and cyclists and incorporating these additional externality costs into the VRT system. Additionally, annual vehicle tax based on annual mileage was considered. This was seen as having the potential to incentivise high mileage drivers to drive less or purchase lower emissions vehicles.

Measures Discussed

This subgroup also discussed and put forward recommendations in respect of the following.

Fossil Fuel Subsidies

At the outset, the sub-group noted the Tax

34 The Social Cost of Automobility, Cycling and Walking in the European Union

35 Climate Action and Tax, Tax Strategy Group – 23/07, July 2023

Fuel Pricing Measures

Congestion Charging

The easiest-to-implement distance-based road user charging system which targets fossil fuel use and incentivises the uptake of Zero Emisions Vehicles (ZEVs) is to increase the pump price of fossil fuel. This also broadly follows the ‘polluter pays’ principle. In Ireland, excise duty on petrol and diesel as well as the carbon tax represent fuel pricing measures.

As recommended by the Five Cities Demand Management Study, those responsible for managing traffic in all of the large urban areas in Ireland should consider the costs and benefits associated with applying a daily charge for vehicles to use some or all of the streets within congested urban areas. The revenues generated by any congestion charging scheme(s) should be ring-fenced to pay for attractive alternatives to car use to/from/within the charged area.

These measures also have the potential to generate a significant revenue stream for funding the alternatives to (fossil-fuelled) vehicle use, accepting that they would need to be considered carefully from a just transition perspective.

Stakeholders discussed how charges could be applied to all vehicle types (ICE, PHEV and BEV), as they would be designed primarily to tackle congestion, not emissions, and that such charges could be varied over time, to incentivise the early purchase of low and/or zero tail-pipe emission vehicles.

Road Tolling and Road Usage Charging

The sub-group recommended consideration of the work and findings of Transport Infrastructure Ireland’s BRUCE project on the future potential options for road user charging across the Irish national road network.

Other Measures to Incentivise LEV and ZEV Uptake (including EV charging infrastructure)

To date, much of the funding emphasis around electric vehicles, including Low Emissions Vehicles (LEVs) and ZEVs, has been on supporting early adopters to overcome prohibitive upfront investments needed to purchase EVs. To support the widespread, equitable adoption of electric vehicles, Zero Emissions Vehicles Ireland (ZEVI) are shifting, in the coming years, from fiscal incentives for private vehicle purchases to funding programmes to support the implementation of a country-wide publicly accessible EV charging network.

Recognising that any plan to introduce a new approach to road taxation would be implemented in a phased manner over time, it is suggested that work continues on examining the range of available options and on creating alignment across the Department of Transport and the Department of Finance on the future direction of road taxation across Ireland over the medium to long term, taking account of the recommendations from the Commission on Taxation and Welfare (COTW) in this regard.

Low, Ultra-Low and Zero Emission Zones

As noted in the Department of Finance’s Tax Strategy Group paper (TSG-06 2023), any VRT and Motor tax discounts for EVs should be time-limited, to balance the need to incentivise the early uptake of these vehicles with the corresponding need for financial sustainability of the Irish fiscal system.

In areas which are identified to have particularly poor local air quality (based on concentrations of NO2 and/or particulate matter – PM10 and PM2.5) and particularly close to sensitive receptors (roadside residential properties, schools, high pedestrian footfall, popular cycle routes etc), there is merit in introducing ‘bans’ on the most polluting vehicle types, starting with pre-Euro 6/VI diesel vehicles, but potentially being subsequently expanded to include all diesel vehicles.

Sustainable Transport Incentives

Examples of these include:

ᴏ Allowing drivers to retain their No Claims discount without requiring continuous car ownership;

The group did not agree to the widespread introduction of ‘free public transport’, given that this encourages a shift from active travel modes to public transport use for short journeys, but rather proposed that the current concessionary travel for specific segments (e.g., seniors) be retained, given the other benefits which this free travel delivers to these often-low-income groups. However, the sub-group suggested that the overall public transport fares strategy should be designed to maximise the benefits of the multimodal transport system, not simply to rely on over- charging an inelastic ‘captive’ cohort of noncar owning bus users, while remaining financially sustainable.

ᴏ Removing any impediment to the expansion of car-pooling from an insurance perspective;

ᴏ Working with insurance companies to find ways to incentivise drivers to reduce their mileage and receive more affordable insurance;

Fiscal Measures to Encourage Sustainable Land Use

Local authorities responsible for planning and controlling local development, delivering and maintaining active travel infrastructure, local parking policy and provision, residential parking etc., need to be incentivised to reduce the need for unnecessary car ownership and use.

Measures which reduce barriers to cycling are unlikely to suffer from the risks associated with providing ‘free’ public transport. However, tax incentives which encourage the purchase of bikes and e-bikes should remain available or be extended where possible.

There was consensus in the subgroup for introducing a system which rewards local authorities that achieve reductions in the need for car ownership and car use. In particular, the role of fiscal measures in land use should be considered in this context.

Fiscal measures could also be considered to incentivise employers, particularly large employers, to achieve specific targets for the car mode share of employee commuting patterns (both % trips and % of total commuting kms).

The requirement to provide/support alternatives to car travel should be accompanied by the widespread adoption of a Workplace Parking Levy scheme, designed to reduce the availability of ‘free parking for all’ and with employers encouraged to allocate their reduced number of spaces on the basis of need, rather than pay grade. This scheme would be explicitly designed to avoid encouraging the development of additional ‘edge-of-town’ employment locations.

These could include tax incentives (or conversely tax penalties) for employers who achieve (or fail to achieve) required targets. In line with recommendations from the Climate Change Advisory Council (CCAC), the sub-group suggested that the current Tax Saver Scheme should be reviewed/revised, to ensure that it offers appropriate sustainable transport incentives to those who now work on a hybrid basis and therefore commute fewer than five days per week.

Challenges

Measures associated with Vehicle Insurance

All measures identified and recommended as part of the Fiscal Measures sub-group require further study and development prior to their implementation. Many measures are highly complex and careful consideration is necessary, including in relation to the potential for impact on existing taxation and related measures, in their design and delivery to ensure they are most effective. A detailed holistic examination of their potential secondary and tertiary impacts on individuals and communities will be critical to

Vehicle insurance legislation should be used to remove any aspects of the current vehicle insurance system which encourage unnecessary car ownership or use, and to instead reduce (unnecessary) car use and incentivise the uptake of ZEVs.

ensure undesired outcomes can be avoided or mitigated to the greatest extent possible, and to ensure a just transition.

range of taxes and tolls applying to transport (motor tax, excise, VRT etc), and to consider the role that other charges e.g. distance-based road user charging, clean air zones, could have on behaviour, fuel and engines choices (passenger and freight vehicles). It is also recommended that an options report be developed on the above for consideration by Government, with a view to ensuring a coherent, and fair approach to transport taxes – one that is well-communicated, easily understood and publicly accepted.

Solving a defined problem must sit at the heart of any fiscal measure considered – for either the adjustment of existing measures or the introduction of new measures - and it will be essential for agencies considering the implementation of any new measure to clearly articulate the purpose and impact of that measure on achieving one or multiple of this Strategy’s objectives. The sub-group recognised that there is no silver bullet and that some measures are more suited to short-term application while others are more suited to the long-term. Facilitating a just transition will be essential to the process, but Ireland can continue to look to, and learn, from international trends. This will be even more important when the rapidly changing mobility landscape is considered. Finally, it was advised that close coordination across Government and the private sector will be necessary when modifying or introducing any fiscal measures.

Such work would be informed by:

ᴏ Climate and Environmental Assessment of the National Development Plan Review (2022).

ᴏ The Department of Finance’s Tax Strategy Group Climate Action and Tax paper 2023.

ᴏ Department of Finance (2023) paper, ‘Potential fiscal impacts of the transition to a lower carbon economy in Ireland’.

ᴏ Department of Finance (2025) Paper: A Decomposition of Economic Activity linked to Greenhouse Gas Emissions in Ireland June 2025.

Conclusion and Recommendations

ᴏ Department of Finance Tax Strategy Group (2025) paper: TSG 25-10 Energy Environmental and Vehicle Tax.

In light of the above, a suite of recommendations related to Fiscal Measures are included in this Strategy. These recommendations are set out below and form part of the full suite of recommendations in Chapter 10. Any proposals of a fiscal nature that may emerge from these recommendations in the future will be informed by social, economic and distributional analysis and will ultimately be the subject of Government decision.

ᴏ Budget 2026: Beyond GDP - Quality of Life Assessment, Green Budgeting (Chapter 6): Budget 2026: Beyond GDP - Quality of Life Assessment.

On the flip side of taxation is the issue of subsidies. ESRI research in 2019 examined how removing fossil fuel subsidies would impact both the economy and carbon emissions. It found that the removal of such subsidies, such as the lower excise rate on diesel, would directly improve our emissions performance plus provide substantial fiscal headspace for the government to use for other climate and social policies.

Vehicle Taxation, Fuel Pricing and Road User Charging

In line with the observations of the sub-group, close collaboration will be required between a number of departments and agencies to help develop a coherent taxation approach to transport in order to support costs arising from infrastructural maintenance as well as costs of externalities (congestion, climate, air quality/ health, accidents and noise) while also ensuring the financial sustainability of the State as the transport system transitions to EVs. Accordingly, it is recommended to review the current broad

The CCAC’s ‘Analysis on reform of Fossil Fuel Subsidies 2022’ stated that the removal of fossil fuel subsidies in the transport sector is recommended above other fossil fuel subsidy reforms. The Commission on Taxation and Welfare in its Foundations for the Future Report also recommended reducing fossil fuel subsidies and developing new taxes to replace the revenues from fossil fuel taxes.

Further work in this area would be informed by the Review of Fossil Fuel Subsidies and Other Potentially Climate Harmful Supports (2023) and work relating to ‘environmentally harmful subsidies’ at EU level and obligations to phase these out.

Legislation to introduce a version of the above in Irish cities would be required. Such a measure is also likely to have implications for the Traffic Signs Regulations, Traffic and Parking Regulations, Traffic Signs Manual, etc.

The sub-group recommended that a review of existing legislation be undertaken to establish whether amendments and/or new legislation would be required for creating appropriate powers.

Also aligned to taxation and subsidies will be the need to explore broader financing options for delivering on demand management objectives e.g. development contribution schemes, retail parking levies, EIB. LAs will also be encouraged to develop internal protocols for harnessing private financing.

It would be important to also develop a methodology/process to determine the need/ impact of any proposed LEZ. In line with the recommendation in the Clean Air Strategy, it is suggested that more modelling or a theoretical pilot on the impact versus the cost of such zones be considered to determine if they will be effective for pollution and cost effective particularly taking into consideration the other measures.

Low Emission Zones and Congestion Charging

Ireland does not operate low-emissions zones or congestion charging. LEZs and congestion charging have the potential to dramatically reduce air pollutants in cities. Congestion charging, if implemented correctly, can both reduce congestion and be a valuable source of finance for transport infrastructure projects and services. It is worth noting the differences between congestion charging and LEZs. LEZs and clean air zones, for instance, can have limited impact on congestion (as people simply procure replacement low emission vehicles). The main objective of such zones is to remove high polluting vehicles from city centres.

While supporting legislation may be in place, it will be important for LAs to determine if LEZs are needed, what the impacts on air quality will be (modelling support) and any unintended consequences. This would need some standardised guidance to make sure all LAs are using the same approach.

Finally, to ensure parity, it will be important that out-of-town retail parks and industrial zones will not enjoy any beneficial fall out from congestion charging in urban centres. Accordingly, it is recommended that a review of LA powers to introduce parking levies on out-of-town retail parks and industrial zones also be undertaken.

The penalties/fines for nonconforming vehicles are generally used to operate the scheme. Congestion charging, however, is a form of urban tolling, and therefore reduces congestion (as it affects all cars, not just high polluting vehicles). It also raises revenue.

Incentivising LEV and ZEV Uptake (including EV charging infrastructure)

In London, since the introduction of the congestion charging and LEZs, congestion has reduced by 30%, bus travel has increased by 33% and it has enabled 10% of journeys to switch to walking, cycling or public transport. In terms of air pollutants, since the Ultra LEZ or ULEZ was introduced in 2019, London has seen a 46% and 21% reduction in NOx emissions in central and inner London respectively. Additionally, over the last two years in London, the combined congestion charge and low-emission zone has generated approximately £884m in net revenue which is reinvested in transport services in the city.

With regard to other measures for supporting LEVs and ZEVs, it was acknowledged by the subgroup that there is a broad suite of supports for EVs already in place including low VRT, motor tax and BIK rates, VRT and BIK reliefs and purchase grants. However, taking captive car users into account, the sub-group gave consideration to the need for reviewing tax breaks, benefit schemes or subsidies (full or partial) to aid in the purchase of a zero or low emissions private vehicle particularly for people who by virtue of their circumstances,

are more reliant on their cars for long journeys e.g., those in isolated locations. This could also include short term incentives for ‘first car’ transition to EV or a targeted scrappage scheme, via a grant scheme, to make EVs more affordable for captive car users. Financial incentives for EV charging infrastructure would also encourage greater uptake.

There are issues that need to be closely considered by policymakers and industry as this area develops.

The Strategy recommends working with the industry, to explore options for supporting the overall objectives of this Strategy, including the delivery of targeted consumer communications on related activities.

Accordingly, it is intended to review existing incentives for encouraging uptake of EVs, with a focus on targeted supports for captive car users.

Encouraging Sustainable Land Use

Consideration will also be given to increased grant support for HDVs through ZEVI’s zero emission purchase grant scheme (ZEHDV) which succeeds the AFHDV scheme in 2024. This recommendation will also consider the need for expanding the ZEHDV scheme to provide financial incentives for EV depot charging infrastructure to also encourage uptake.

As outlined by the sub-group on Integrated Land Use and Transport Planning, compact settlements are critical to the delivery of sustainable transport options. As such, full implementation of the NPF, and the revised NPF, will be essential to achieving a 50% reduction in carbon emissions in the transport sector by 2030. It is acknowledged that fiscal measures can play an important role in influencing sustainable land use but these need to be carefully designed and managed in order to avoid unintended consequences.

Vehicle Insurance

It is proposed to explore, working with the insurance industry, opportunities for incentivising safer and more sustainable travel behaviours, including less car use and better incentives for car-sharing and carpooling. Identifying and addressing any practices that inadvertently incentivise unnecessary car ownership would also be considered. While some of the supports could lead to reduced car ownership, with associated impacts on the numbers of premiums sold, it is anticipated that lower traffic volumes would help to reduce overall risk of accident including a consequent reduction in the costs of pay-outs to the industry.

It is clear from previous experience in Ireland and elsewhere that appropriately targeted and timebound tax-related measures that are integrated with broader policy objectives and properly managed, can be transformational. Focused application of taxation measures would underpin national planning policies and objectives relating to provision of 30-50% of new homes within and close to the existing ‘footprint’ of built-up areas as set out in the National Planning Framework (50% in the five cities, 30% elsewhere). The objective of this would be to rebalance the attractiveness of greenfield development over brownfield regeneration in terms of cost, attraction of investment and viability of projects, in favour of brownfield development.

The role of telematic technology in measuring driving behaviours (including distance driven) will also be considered. This is an emerging feature of insurance products in the Irish motor insurance market. Such technology has the scope to reward better driver behaviour, and encourage better driving habits, by offering discounts to drivers who achieve a series of targets set by the insurance provider, including lower premiums for lower mileage. At the same time, there is a need to be mindful that increased focus on technology brings challenges in terms of the ethical use of data and the potential for individualised risk profiles, which can potentially prevent consumers accessing appropriate insurance cover.

Whilst not a ‘tax’ measure in the normal sense, the use of the obligations relating to development contributions under the relevant provisions of the Planning and Development Act 2000 is an essential tool in providing the ability for the State, through local authorities, to secure either financial contributions or works associated with delivering the infrastructure required to support development including housing, such as transport infrastructure projects and other facilities required by the community.

The aim is to bring forward measures to improve the infrastructure-financing model, supporting the delivery of more homes and benefits to the wider community, including reviewing development contribution arrangements.

on the land and with sufficient service capacity available for such development.

These residential zonings are considered to reflect the housing need set out within the core strategy for the relevant local authority area.

As acknowledged by the sub-group, the CTW recommended the introduction of a Site Value Tax (SVT) on all land currently not subject to Local Property Tax. This includes all commercial (developed and undeveloped), mixed-use, agricultural, undeveloped zoned residential lands, and State-owned lands as well as all land on which derelict and uninhabitable premises sit. The CTW recommends that SVT should replace the existing system of Commercial Rates over time and that there should be differential treatment in the application of Site Value Tax to agricultural land.

The RZLT aims to ensure that lands which are zoned for residential purposes, and which have benefitted from investment in services by the State are actively managed to ensure a constant supply of housing to meet identified need, thereby acting as an incentive to support implementation of the National Planning Framework, including the compact growth objectives focused on the consolidation of settlements, and the Government’s housing action plan Delivering Homes, Building Communities.

Having regard to the extensive dereliction and vacancy of buildings in city and town centres, the Department of Housing Local Government and Heritage has also made several updates to commercial vacancy rates and vacancy provisions under Section 9 of the Local Government Rates and Other Matters Act, 2019. This provides a new legal framework for commercial rates from 2024 onwards. The aim of this section is to discourage commercial vacancy and to allow elected members to devise vacancy abatement schemes targeting specific types of vacant commercial properties to incentivise usage. While this is positive progress, it is recommended that taxes for derelict or vacant properties are more onerous to prevent property hoarding. It is noted that there are strong commitments in the Government housing plan Delivering Homes, Building Communities to end dereliction and vacancy, including legislating for a Derelict Property Tax in 2026.

However, it is worth noting that Finance Act 2021 introduced Part 22A Residential Zoned Land Tax (RZLT) into the Taxes Consolidation Act 1997. The RZLT is designed to prompt residential development by owners of land that is zoned for residential or mixed-use (including residential) purposes and that is serviced.

RZLT is an annual tax, managed by the Revenue Commissioners, calculated at a rate of 3% of the market value of the land within its scope. The tax is due and payable from 2025 onwards.

Lands in scope for the tax are identified annually by local authorities, who are required under the legislation to prepare and publish draft maps in respect of which landowners can make submissions, and subsequently final maps identifying the lands to which the tax will apply for the following year.

It is important to note that, to come within the scope of RZLT, land must be both zoned for residential use and serviced. Land that is zoned for residential use within a statutory land use plan, but which is not currently serviced, is not within the scope of the tax and will only come within the scope of the tax should the land become serviced at some point in the future.

It is worth noting that any changes to rates system would require extended consultation across Government departments, LAs, state bodies and stakeholders, and full consideration of impacts on policy that is beyond the remit of transport. Given the range of measures that are currently being implemented, it is considered preferable to allow these measures to progress before undertaking a review of additional fiscal measures in land use.

Land will be considered to be serviced for the purposes of the tax where it is reasonable to consider that the land has access to, or may be connected to, public infrastructure and facilities, including roads and footpaths, public lighting, foul sewer drainage, surface water drainage and water supply, necessary for dwellings to be developed

Within the context of incentives, the Strategy recognises the existing Living City Initiative - a very specific tax measure with the aim of encouraging businesses and home-owners back to the centre of Irish cities in order to preserve historic buildings in special regeneration

Workplace Parking Levy

areas. The scheme offers relief from income or corporation tax for qualifying expenditure incurred on the refurbishment and/or conversion of qualifying buildings located within the special regeneration areas in the centres of Dublin, Cork, Limerick, Galway, Waterford and Kilkenny.

In relation to the Workplace Parking Levy, it is intended to review existing legislative provisions in this area. The Finance (No. 2) Act 2008 facilitated the introduction of a workplace parking levy - that is a charge on employees for the use of car parking facilities which have been provided by their employer in designated urban areas. It did so by inserting Part 18B into the Taxes Consolidation Act 1997.

Finally, there is a commitment in the Government’s housing action plan, Delivering Homes, Building Communities, to publish a National Planning Statement that will set out relevant planning criteria to be applied in local authority development plans for rural housing, based on the high level policy framework set in the National Planning Framework.

The CCAC have recently called for the workplace parking levy to be introduced. The NTA also raised the prospect of a workplace parking levy in its Greater Dublin Area Transport Strategy, with a view to discouraging the use of existing car parking spaces at all workplaces in Dublin city centre, key towns and large metropolitan centres.

These Guidelines will ensure ongoing consistency with legislation at national and EU levels related to rural housing, such as environmental protection, Gaeltacht and climate action legislation and provide a framework for the sustainable management of housing in rural areas.

A workplace parking levy is in operation in Nottingham in the UK, with a Transport for London briefing note saying that around 25,000 car parking spaces are liable for the payment (see detailed case study in Appendix 1 of this Strategy).

The sustainable management of housing in rural areas will have a critical role in reducing demand as part of this Strategy.

When the legislation was introduced, the intention was that the levy would apply in the five urban areas of Cork, Dublin, Galway, Limerick and Waterford, with the exact areas to be designated by order of the Minister for Finance. However, the legislation as currently framed could pose implementation difficulties – it is administratively complex, and inflexible. The levy amount prescribed in the legislation is considered too low to be effective as a disincentive. Other alternatives to the workplace levy could also be considered, e.g. removing the income tax BIK exemption for employee car parking.

This Strategy recognises and strongly supports the potential positive impacts and strong alignment with demand management objectives of the range of proposals and initiatives currently being developed as outlined. It is recommended that the advisory arrangements proposed in relation to alignment with the NPF (Recommendation 1) would also be sighted on developments in relation to these measures and offer any support it can in advancing these.

Alternatively, free parking at work could continue to be tax-exempt only if commuters who do not drive to work are offered a benefit of equivalent value. Called ‘parking cash out,’ this policy does not take anything away from commuters who drive to work. Instead, it creates a new benefit for commuters who do not drive to work.

In summary, it was recommended to review the provision in the Finance Act, provide an update in context of the objectives of this Strategy and bring forward recommendations as part of the budgetary process. This element of the review was undertaken by Department of Finance as part of the Tax Strategy Paper process for Budget 2025.