Residential Zoned Land Tax (RZLT) is just around the corner

Residential Zoned Land Tax is just around the corner

Delayed by a year from 2024 to 2025 the Residential Zoned Land Tax (RZLT) is fast approaching.  This new tax is levied on the value of serviced zoned residential land at a rate of 3% and is payable for the first time on the 1^st of February 2025.

Government initiatives to help solve the housing crisis have predominantly been focused on a carrot approach to date with a number of purchaser and developer financial supports.  These have included:

·       Help to buy grants for first time buyers

·       First homes scheme for first time buyers

·       Vacant and derelict house grants

·       Development and Irish Water contribution waivers for developers.

·       Significant investment in social housing by local authorities

In addition, the government is introducing a new Planning and development Bill. This is a massive piece of legislation ( the third largest in the history of the state) which will attempt to fundamentally change our planning system to simplify the planning process and speed up decision making.  It has just been announced that it won’t be introduced to the Dáil before the summer recess.  The clock is ticking to have this bill introduced before the general election.  However, it is likely that it will take some years before the impact of the legislation will be seen should it be adopted.

The RZLT very much falls into the stick approach to encourage land owners to do something with their land or pay the tax.  To see if your land is subject to the tax each local authority has an online map showing what land is liable.  Submissions on the exclusion of land from the RZLT needed to be lodged by the 1^st of April 2024 to the local authority.  Appeals of determinations by the local authority following submissions need to be made to An Bord Pleanála by the 1^st of August 2024.

To be subject to the tax the land must be zoned for residential use (some mixed use lands are also included) and have access to necessary services such as water supply, roads and lighting.  Existing residential properties liable for Local Property Tax (LPT) are not subject to RZLT.

Many landowners may find themselves facing significant tax bills next year.  Now is the time to understand what is coming your way.

The RZLT will undoubtably force many landowners to consider the future use of their land.  However, the tax seems unfairly penal for those that are trying to bring zoned land through a log jammed and dysfunctional planning process. 

In many parts of the country the lack of availability of infrastructure is the next major bottleneck that is going to slow down the delivery of housing.  The Dublin area in particular is facing critical challenges in water supply constraints in the absence of access to new water sources.  These shortages are going to lead to planning refusals by Irish Water in the medium term without urgent action.  How will zoned (theoretically) “serviced” lands, that can’t get planning because of a failure of the state to invest in infrastructure be taxed in the future?  The costs of development are ultimately paid for by the end consumer or worse still the development doesn’t happen at all if the costs make a scheme unviable.  

Diarmuid McMahon, Managing Director, Sherry FitzGerald McMahon,  Estate Agents, Ennis. Co. Clare. 

E-mail:-                ennis@sherryfitzmcmahon.ie     

Telephone:-        065 6867866