The following is the first of a number of tax updates on property-related taxes. In our next issue, we will review the “Land Value Sharing Levy” and will also give you an update on the Local Property Tax.
Residential Zoned Land Tax (RZLT)
Residential Zoned Land Tax is a new annual tax that will apply to land that is zoned for residential use and is serviced. It will apply to land that is zoned on or after 1 January 2022. In general, the land is serviced where it has sufficient access to the infrastructure such as roads, paths, lighting, and access to water supply and services, including sewers and drainage.
RZLT is calculated at 3% of the market value of land within its scope. The tax will apply from 2024 onwards, for land that is zoned (and development not commenced) on or after 1 January 2022. Where land is zoned for residential use after 1 January 2022, the tax becomes due in the 3rd year after the year the land comes within the scope of RZLT. The tax will be due annually until such time as the land ceases to be liable for the tax or unless the land qualifies for a deferral of tax.
Certain properties are excluded from RZLT, such as existing residential properties liable for LPT. However, if your garden or yard is greater than 0.4047 hectares (one acre) and is listed on the Local Authority Maps then you must register for RZLT, however no RZLT is payable by the owners of these properties, but filings are required.
Exclusions
If you find your property is listed in the Local Authority Maps, then your next step is to determine whether the site can qualify for an exclusion. The following are some of the more common exclusions:
- Zoned land used to carry on a trade or profession by a business paying commercial rates,
- Land that is zoned for a mixture of residential and other uses, where it is reasonable to consider the land is integral to the operation of a business carried out on or beside it,
- Land required for social, community, or governmental infrastructure,
- Land that is precluded from development,
- Land that is subject to the derelict site levy,
- Land which while zoned as residential land may not be suitable for the provision of housing.
Deferrals
RZLT may be deferred in certain circumstances such as where you begin residential development of the land, where planning permission has been granted, where commencement notice has been served by the local county council, and where your appeal against the inclusion of your land on a local authority map is ongoing. In certain circumstances the deferral may be abated, such that the tax does not become payable.
What You Need to Do to Prepare for RZLT
1. Check the Local Authority Maps: Each local authority has prepared and published a draft map identifying land within the scope of RZLT. You will find the draft map here. Final maps are due to be published on 1 December 2023 and RZLT will be payable in 2024 on any lands included on those final maps. Local authorities will update these maps annually from 2025 onwards for changes in the zoning and servicing status of the land.
2. Submission to Local Authority: Landowners had the opportunity to make a submission against the inclusion of land on the map to their local authority by 1 January 2023. Therefore, if your land was on the map on 1 January 2023 then the period for making an appeal is now over. Where landowners have made an appeal and the appeal has been turned down then the landowners may subsequently appeal to An Bord Pleanála by 1 September 2023.
3. Registering for RZLT: You will be able to register for RZLT in late 2023. You must make an annual return to Revenue and pay any liability by 23 May of each year, beginning in 2024. An owner of land which was zoned as suitable for residential development and serviced on 1 January 2022, and on which development has not commenced before 1 February 2024, will be liable to file a return and pay RZLT due in respect of such land on or before 23 May 2024. There is a €3,000 penalty for those who do not register for the tax but are required to do so.
You must keep detailed records so that Revenue may verify what RZLT is due. In cases of non-compliance, including undervaluation of the land in scope and late filing of returns, interest, penalties, and surcharges will apply as appropriate.
Contact Us
Once you have reviewed the maps, you may find a property of yours listed on it. If this is the case your next course of action should be to contact your tax advisors to assist you with the process or to determine whether an exclusion or deferral should apply. If you would like more information, please feel free to contact us.
