Paschal Donohoe (Dublin Central, Fine Gael)

The residential zoned land tax was introduced in the Finance Act 2021 and first charged in 2025. It seeks to increase housing supply by encouraging the activation of residential development on lands that are suitably zoned and appropriately serviced.

Owners of land, which was zoned for residential use and serviced on 1 January 2022, or which first became both zoned for residential use and serviced in the course of 2022, and which appeared on the revised map published by local authorities by 31 January 2025, first became liable to RZLT on 1 February 2025.

It is important to note that, to come within the scope of RZLT, farmland must be both zoned for residential use and serviced. Farmland that is zoned for residential use, but which is not currently serviced, is not within the scope of the tax and will only come within the scope of the tax should the land become serviced in the future. The legislation also provides that farmland which is zoned for mixed use, including residential use, and which is integral to the operation of a farming trade carried out on it or beside it is excluded from the tax even where this land is serviced. It should not be included in the RZLT maps prepared and published by local authorities identifying land within the scope of the tax.

In relation to Deputy Timmins's amendment on declared agricultural activity being exempt from RZLT on a permanent basis, it is acknowledged that some farmland does fall within the scope of the tax. However, given the accepted and acute need for the development of affordable and sustainable housing throughout the country, the exclusion of agricultural land which has benefited from investment in services to accommodate development in this context may impact the policy objective of this measure.

The Deputy is also aware that, as much as possible, it is important to treat all landowners in a similar way regarding the application of RZLT. Consequently, if we were to exempt one group of landowners, such as farmers, while applying the tax to others who may have equally compelling reasons from an economic activity perspective to seek an exemption, there is a risk of a legal challenge to the legislation. This therefore explains the approach I have adopted, which is to provide a further opportunity to landowners whose land will appear in a revised map to be published on the 31 January 2026 to request a rezoning of such land to reflect its economic use from the local authority in whose functional area the land is situated. Where certain conditions are met, such land will be granted an exemption from the liability in 2026 and where land is subsequently rezoned such that it no longer meets the relevant criteria for the tax, it will fall outside the scope of the tax going forward.

I am aware of the point the Deputy makes regarding people having to do this on an annual basis. I am trying to balance that against the prerogative to ensure all land that is capable of having homes being built on it is treated in an equal way. As I said, a recognition of the issues the Deputy has raised is the reason we exempted land that is zoned from agricultural land, in the first place. The Deputy referred to the requirements on landowners who are farming on land zoned for other purposes.

I know it is an issue, which is why I extended it for a further year and will continue to examine this issue to see if there are other ways it can be dealt with. I have to be open in saying the challenge is the need to treat all land equally apart from land zoned for agricultural purposes.

In relation to the amendment from Deputies Doherty and Farrell about a report on the effect RZLT has on the socially damaging practice of land hoarding, the Deputies are aware, and I think it was just touched on, that Revenue statistics published in September 2025 note that the RZLT for 2025 in the returns received to that point were €120.4 million, of which €72.2 million has been deferred due to the granting of planning permission or commencement of residential development on land which falls within the scope of the tax. I want to do some work to look at the effectiveness of this measure. It was a significant change in the area of tax policy. We are now in the very early period of it being implemented. As the year moves on, I want to do work to assess whether it is delivering against the objectives I intended. The evidence I am getting at the moment is too anecdotal. The anecdotal evidence I receive is positive. When I engage with local authorities at political and official level, the feedback is positive in terms of transactions they are seeing for land local authorities intended homes to be built upon. They are now seeing transactions taking place which they relate to the implementation of this tax. That feedback, for the most part, has been positive. Notwithstanding the difficult political issue we had, which Deputy Timmins raised and Deputy Doherty agreed with, when I engage with local authorities on this matter, the feedback in the vast majority of cases is very positive. I will turn my mind as we move through the year to seeing what more we can do to assess the impact the tax is having beyond the information I shared with the committee in relation to deferrals. This tax is having a positive effect but I want to see further evidence. It is a pretty reasonable request from the committee that it wants to see the same.