The Government should proceed in implementing the residential zoned land tax (RZLT) immediately, the Economic and Social Research Institute (ESRI) has said.
In its latest quarterly commentary, the ESRI acknowledged there would be huge financial implications for some farmers if the RZLT was to go ahead.
“Recently some public debate has focused on the difficulties which some farmers may experience if the tax were to go ahead, as they would be liable for the tax on land used for agricultural purposes.
“The rate of the RZLT is 3% of the market value of the land. The market value is self-assessed by the landowner,” it said.
However, the ESRI continued that the tax should go ahead immediately.
“It is crucially important that the implementation of this tax proceeds immediately. This commentary has argued on a number of occasions that addressing land prices is arguably the only way policymakers can significantly reduce the cost of supplying a house.
“Most other cost elements - such as labour and materials - are, broadly speaking, outside the control of Government,” it said.
Pledges for farmers
Taoiseach Simon Harris pledged at Virgina Show that farmers will be his removed from the firing line of the RZLT ahead of Budget 2025.
Speaking last week at the Ploughing, Minister for Finance Jack Chambers said active farmers must be excluded from paying RZLT.
This tax, introduced as part of the finance bill 2021, is set to be charged each year on land that is zoned for residential use and has access to necessary services such as water supply, roads and lighting.
The purpose of the tax is to prevent the hoarding of land which could be used for residential purposes.
However, no provisions are currently in place to exempt active farmers, which the Taoiseach said previously are not land hoarders.
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