Efforts to secure a site for a new Secondary School in Claregalway are being hampered by the tax implications faced by landowners who have suitable land.
The issue was raised at a meeting of County Galway Vocational Education Committee this week, where members suggested that a windfall tax of 80%, applicable where land is rezoned, was deterring landowners from selling a site to the Department of Education.
Earlier this year Minister for Education Ruairí Quinn committed to providing a Secondary School in the village for the academic year starting September 2013.
However, the delay in securing a site means it is increasingly likely the school will have to open in temporary accommodation in order to meet this deadline.
Earlier this year, VEC members revealed that up to eight sites were being considered for the school that will have 112 students for enrolment by September 2013.
While talks between Galway County Council and the Deparment of Education are understood to be continuing, local information in the area suggests the huge tax penalties involved in the sale of rezoned land is putting potential landowners off.
Councillor Jarlath McDonagh said there was growing uncertainty in Claregalway that the promised school would open on schedule, as local landowners were reluctant to offer land given the huge tax penalties involved.
Councillor Michael Connolly said he had sought information from the late Minister for Finance Brian Lenihan in 2009 clarifying the position regarding windfall taxes.
“The letter I have from the late Brian Lenihan states the position regarding windfall taxes,” he said.
“The windfall tax rate of 80% will apply on the disposal of land to the portion of the profit or gain which is attributable to a rezoning where both the rezoning and the disposal of land giving rise to the windfall happen after October 30th 2009.
“A rezoning for windfall tax purposes is defined as a change from a non-development land use to a development land use, or a change of development land use.
“In respect of once-off sales of sites, the rate will therefore apply to land whose use has been changed from agricultural to residential if the rezoning takes place after October 30th 2009.
“It will be such a shame if this badly needed school is held up over zoning or tax implications.”
VEC Chairman Joe McDonagh said while the VEC was not privy to the ongoing negotiations between department and council officials regarding the purchase of a site, he imagined the school would have to be sited as close to the village as possible. “I am aware of the department’s anxiety to progress this project but until a decision is made regarding patronage, there is nothing we can do,” he said.
“An announcement regarding patronage is expected at the end of this month as the report is with the New Schools Establishment Group, awaiting ratification by the Minister.
“I can only reinforce my previous commitments that if the VEC is granted patronage of the Claregalway school we are confident we can deliver it by September 2013, although the onus will be on the Department of Education to provide temporary accommodation.”
