New residential zoned land tax to apply to farm land
The Government estimates the residential zoned land tax will affect approximately 8,000 to 9,000 hectares - including farmland. Picture: Christopher Furlong/Getty Images)
In 2024, owners of agricultural land zoned for residential purposes will have to pay the new annual residential zoned land tax, build homes on the land, or change its zoning status.
The new tax to “activate” vacant lands for residential purposes was one of the main actions announced in the ‘Housing for All’ policy in September. It is intended to replace the Vacant Site Levy.
The tax rate will be 3%, due to come into effect on February 1, 2024.
“If it is worth €1m, the owner will be paying €30,000,” said Finance Minister Paschal Donohoe in the Dáil.
“Currently, the vacant site levy is applied to 501 hectares across the country. My recollection is that it applies to several hundred properties. Our estimate is that the zoned land tax will cover approximately 8,000 to 9,000 hectares,” said Minister Donohoe.
The tax will be a percentage of site value, self-assessed by the landowner. Any site occupied by a dwelling liable for Local Property Tax will not be liable for the new tax.
Minister Donohoe said one of the key reasons for a run-in period until the new tax is in place is that a de-zoning or re-zoning process will be put in place by local authorities to allow, for example, a farmer who is actively farming land that is zoned for residential use to apply to change the status of that land. It will then be up to the members of the local authority as to whether to grant that decision.
The number of exemptions from the tax will be very narrow, said Minister Donohoe: “In theory, if the land has a zoning status that means housing should be built on it, it would be subject to the tax. We do not have a minimum threshold of an area of land to which the tax should not apply.”
The new tax will apply to all towns and villages across the State, where land meets the criteria for tax liability.
“If a town or village has land that has a zoning allowing residential use, but that land is not used for residential use, and if it is serviced or serviceable, then it would almost certainly be subject to this tax,” said the Minister.
He said where sporting clubs’ land is either zoned for recreational use or, in some cases, for residential use but with a lease allowing use by GAA clubs or sports clubs, it will be exempt from this tax.
