Landowners to find out if they owe new 3% market value tax 

Minister of Housing, Local Government and Heritage Darragh O’Brien says: “It’s estimated that only one-sixth of residentially zoned land is activated for housing during a local authority’s six-year Development Plan period."

More landowners will find out today if they are subject to a new zoned-land tax which the Government claims is an “important component” of boosting housing supply.

The 3% tax isn’t aimed at raising revenue, but to act as an incentive to activate land that could be used for housing, according to ministers.

Dozens of appeals have been made to An Bord Pleanála from landowners who’ve been included in the original draft map of land subject to the tax. Today, supplemental zoned-land maps are being published to include further lands identified to fall within the scope of the tax.

Minister for Housing Darragh O’Brien said: “It’s estimated that only one-sixth of residentially zoned land is activated for housing during a local authority’s six-year Development Plan period.

We need to see more suitable land which is serviced and available for housing unlocked for the delivery of homes.

The Residential Zoned Land Tax is a new tax which the Government says is aimed at increasing housing supply by activating lands zoned for residential development for housing. It also aims to incentivise landowners to use existing planning permissions for housing.

It’s charged at a rate of 3% of the land’s market value, and operates on a self-assessment basis. Local Authorities initially published a draft map of land falling within the scope of the tax last November, and people will now have until June 1 to make an application to their local authority regarding the supplemental map being published today.

In the last two weeks, An Bord Pleanála has received over two dozen appeals in Cork alone related to inclusion on this register to pay the Residential Zoned Land Tax.

The Government has said homeowners will not have to pay this tax if they own a dwelling which appears on their local authorities’ map, where the property is subject to the Local Property Tax.

If a homeowner owns such a dwelling, where the land/gardens/yards attached to it are greater than 0.4047 hectares (1 acre), they will have to register for the Residential Zoned Land Tax with the Revenue Commissioners, but they will not be liable to pay the tax.

Land Value Sharing initiative 

Mr O’Brien added: “Taken together with the planned Land Value Sharing initiative and reform of the planning system, the Government is ensuring a fairer approach to land management and that housing will get built quicker and without unnecessary speculative costs from land mismanagement.” 

Some local representatives have raised issues around this tax in the Dáil, particularly around constituents who could find themselves subject to it.

During a sitting of Leaders’ Questions in March, Kerry TD Michael Healy-Rae raised the issue of a family from Killorglin, who are farming the bit of land they own.

“If this tax were to be imposed on them, it would cost them €30,000 per year,” he said. “They do not make €30,000 from their farming operation." 

The tax will first fall due on February 1, 2024.