Farmers urged to check whether land falls within new tax zones

The draft RZLT maps published by local authorities allow landowners, including farmers, to see if their land is within the scope of the tax.

Landowners near built-up areas have been advised to check new maps published by all 31 local authorities, to see if their land comes within the scope of the new Residential Zoned Land Tax (RZLT).

The RZLT is designed to prompt residential development by landowners, including farmers, of land that is zoned for residential or mixed-use (including residential), and that is serviced.

"Given the housing needs that we have, where land is zoned for new housing, we want to build on it," said Finance Minister Paschal Donohoe.

Farmland that is zoned for residential use but which is not currently serviced is not within the scope of the tax.

In general, land is considered to be serviced where it has sufficient access to the infrastructure required for residential development. This includes roads, paths, lighting and access to water supply and services, including sewers and drainage.

RZLT will be at 3% per year of the market value of the land. It will be due and payable from 2024 onwards in respect of land which fell within the scope of the tax on or before January 1, 2022. Where land is zoned or serviced after January 1, 2022, the tax will be first due in the third year after the year in which it is zoned or serviced.

The draft RZLT maps published by local authorities allow landowners, including farmers, to see if their land is within the scope of the tax.

If it is, and a landowner believes it should not be, there are two separate courses of action open.

The landowner can make a submission to the local authority by January 1, 2023, seeking to have their land removed from the map. The local authority responds with a written determination. If landowners disagree with the determination, they can appeal to An Bord Pleanála.

Or landowners can request to the local authority to have their land rezoned.

Supplemental and final maps will be published in 2023. Local authorities will update these maps annually from 2025 onwards for changes in the zoning and servicing status of land.

Residential property liable for Local Property Tax is exempt from RZLT. However, if your garden or yard is greater than 0.4047 hectares (one acre), you must register for RZLT (from late 2023 onwards). No RZLT is payable by owners of these properties.

You may have to pay the tax if you own a dwelling that appears on the local authorities’ Residential Zoned Land Tax maps, that is not subject to the LPT.

It is proposed in the Finance Bill 2022 to exempt land that is within the scope of the RZLT, but is subject to contractual arrangements that preclude the landowner from developing it. For example, where a farmer leased land prior to January 1, 2022, and the requisite conditions are met, the farmer may be able to claim an exemption from the tax for the period of the lease.

Draft RZLT maps can be found at gov.ie/rzlt or on the websites of each local authority, and in their public offices.

Besides landowners, other interested parties may make submissions on the inclusion of land which they consider falls in the RZLT scope, but was not included.

RZLT will operate on a self-assessment basis, administered by the Revenue Commissioners, which recently published a webpage guide on RZLT.

Minister Donohoe has said he engaged with Agriculture Minister Charlie McConalogue on the RZLT, and Minister McConalogue raised the issue of land in smaller towns that could be owned by farmers and is zoned for residential use.

However, there is a process for landowners to ask for land to have non-residential status.