Jack Chambers (Dublin West, Fianna Fail) | Oireachtas source

I thank the Senator for tabling this Commencement matter, which I am taking on behalf of the Minister for Finance. The residential zoned land tax, RZLT, is a new tax introduced in the Finance Act 2021 which seeks to increase housing supply by encouraging the building on lands that are suitably zoned and appropriately serviced. It aims to bring forward for housing land that has benefited from State investment in services and is capable of being developed. The tax is an action contained in Housing for All, the Government's plan to increase housing supply, and is supported in the programme for Government.

The annual tax will apply at a rate of 3% of the land's market value and will operate on a self-assessment basis. In order to be liable for the tax, the land must be suitably zoned and serviced. Suitable zoning in the context of the RZLT refers to land that has been zoned by the relevant local authority for residential development. This includes zonings that are solely or primarily for residential development or for a mixture of uses, including residential development. Suitably serviced means where it is reasonable to consider that the land in question has access to, or is connected to, public infrastructure and facilities. This includes roads and footpaths, public lighting, foul sewer drainage, surface water drainage and water supply. These are the services considered necessary for dwellings to be developed. Such services must have sufficient capacity available for residential development. In order to be liable for the tax, the land must meet both of these criteria.

The development and implementation of the RZLT involves the Department of Finance, the Department of Housing, Local Government and Heritage and the 31 local authorities. Following the first liability date for the tax, it will be administered and collected by the Revenue Commissioners. Initial draft RZLT maps were published by local authorities on 1 November 2022. The purpose of the draft map was to allow landowners to see if their land is within the scope of the tax. Landowners had an opportunity to make submissions regarding the inclusion or exclusion of land on the maps up to 1 January 2023. Landowners also had an opportunity to request a variation of the current zoning of their land up to this date. Local authorities issued determinations in respect of submissions made on the draft maps by 1 April 2023. Landowners dissatisfied with such determinations had until 1 May to make an appeal to An Bord Pleanála. It is important to note that landowners will not have to pay the RZLT if they own a dwelling that appears on the local authorities’ RZLT maps but is also subject to the local property tax.

This tax measure is a key pillar of the Government’s response to address the urgent need to increase housing supply in suitable locations. It is acknowledged that the tax will impact on landowners and it is important that those affected have sufficient opportunity to engage with the mapping process and that a fair and transparent process is applied when local authorities consider what land should be placed on the RZLT maps.Therefore, as part of budget 2024, the Minister for Finance announced his intention to extend the liability date of the tax for one year, from February 2024 to February 2025. The purpose of this deferral is to allow for the annual mapping cycle to complete and afford landowners another opportunity to make submissions if their land is included on the maps prepared by the 31 local authorities. The deferral will provide a further opportunity to landowners whose land will appear in a draft revised final map to be published on 1 February 2024 to request the rezoning of such land from the local authority in whose functional area of the land is situated.