“Some of my father’s lands were recently included in the County Development Plan as suitable for residential development. My father has no notion of developing it or indeed selling it for development. It has been leased for a good number of years and we are fearful that it might be subject to the residential zoned land tax. Is there anything we can do to avoid this happening?”
The residential zoned land tax (RZLT) was introduced in Finance Act 2021. It is an annual tax, calculated at 3% of the market value of land within its scope. The tax applies to land that, on or after 1 January 2022, is zoned as being suitable for residential development and is serviced, with certain exclusions.
Minister for Finance Paschal Donohue referred to it in his recent budget speech, when he said that in order to identify the zoned land within the scope to tax, maps are being prepared by local authorities who will publish their first drafts on 1 November 2022. Following publication of the maps, any person will have the opportunity to apply to their local authority to have the zoning status of their land amended as part of a variation process. He said that in Finance Bill 2022 (due to be published on 20 October 2022) he will bring forward a number of amendments to streamline the operation of the RZLT and ensure it is efficiently administered.
Land zoning and serviced land
Land must be zoned for residential use or for a mixture of uses that includes residential use for it to be subject to RZLT. It is only when land is zoned for residential use and has access to necessary infrastructural services to allow for development to proceed that it is within the scope to tax. “Serviced” means having access to the necessary public infrastructure and facilities including road and footpath access, public lighting, foul sewer drainage, surface water drainage and water supply necessary for dwellings to be developed and for which there is service capacity available sufficient to enable housing to be developed.
Exclusions from the scope of RZLT
local authority maps Timeline
Draft map – key dates
An owner of land which was zoned as suitable for residential development and serviced on 1 January 2022, and on which development has not started before 1 February 2024, will be liable to file a return and pay RZLT due in respect of such land on or before 23 May 2024.
Where the land is zoned as suitable for residential development and/or serviced after 1 January 2022, tax will be first due in the third year after it comes within the scope. The tax will continue to be payable each year in respect of the land unless a deferral of the tax applies or the land ceases to be liable to the tax.
In cases of non-compliance, including undervaluation of the land in scope and late filing of returns, interest, penalties and surcharges will apply as appropriate.
Disclaimer: The information in this article is intended as a general guide only. While every care is taken to ensure accuracy of information contained in this article, Aisling Meehan, Agricultural Solicitors does not accept responsibility for errors or omissions howsoever arising. E-mail: firstname.lastname@example.org