Ireland has introduced a new tax measure aimed at stimulating development and curbing land hoarding: the Residential Zoned Land Tax (RZLT). In Farm/Agri Tax: Topical Issues and Updates, Declan McEvoy gave an overview of the subject.
This annual tax, which came into effect in 2025, is set at a rate of 3% on the market value of serviced residential lands. The RZLT targets land that is zoned for residential use and is adequately serviced with necessary infrastructure such as roads, paths, lighting, and access to water supply and services, including sewers and drainage.
The introduction of the RZLT was not without its challenges. Initially scheduled for a 2024 rollout, the implementation was deferred for one year to allow local councils to develop more accurate maps that would identify eligible lands. These maps are crucial as they determine the land that falls within the scope of the RZLT.
The first draft of these maps was published by local authorities on November 1, 2022, with updates to be made annually from 2025 onwards.
Certain properties are exempt from this tax. These include:
- Land liable to the Derelict Sites Levy.
- Land zoned for residential use, which is used by a trade or business liable for commercial rates, provides services to residents of the nearby residential areas, e.g. shops, pubs and cafes.
Existing habitable dwellings (properties with gardens larger than 1 acre may be required to register for the RZLP, notwithstanding that there may be no tax liability).
Land used for certain facilities/infrastructure, i.e. land on hospital grounds, schools and train stations.
This list is not exhaustive.
The government's stance on the RZLT is clear—it is here to stay. However, this position has been met with resistance, particularly from farm organisations. They argue that some agricultural lands, which are inadvertently caught in the RZLT net, could be forced to be sold at undervalue.
To address these concerns, reviews are currently underway to rectify any anomalies in the mapping process. It is important to note that payments made towards the RZLT are not deductible for corporation tax, income tax, or capital gains tax purposes, adding another layer of complexity for those affected by this tax.
As RZLT continues to evolve, it will require ongoing adjustments and clarifications to ensure that it meets its intended goals without causing undue hardship. The debate surrounding this tax, especially among the agricultural community, indicates that while the RZLT may be a step towards encouraging development, it is also a policy that must be carefully managed to balance the interests of all stakeholders involved.
For the full session, please click here. In this course Declan covers the following topics;
- overview of farm incomes
- managing 2023 liability to include
- Addbacks
- stock relief
- income averaging and particularly step out provisions
- Accelerated allowances on slurry storage and energy equipment
- ACA on safety equipment
- stamp duty developments
- capital tax developments
- tax appeals relevant to farming/agri
- 2023 finance bill relating to agri
The contents of this article are meant as a guide only and are not a substitute for professional advice. The author/s accept no responsibility for any action taken, or refrained from, as a result of the material contained in this document. Specific advice should be obtained before acting or refraining from acting, in connection with the matters dealt with in this article.
