Jerry Buttimer (Fine Gael)
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I thank the Minister of State, Deputy Chambers, for attending.

Victor Boyhan (Independent)
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I thank the Cathaoirleach for selecting this Commencement matter. I welcome the Minister of State to the House and thank him for agreeing to deal with this simple Commencement matter.

I understand that, in his Budget Statement, the Minister for Finance agreed to extend the liability date of the residential zoned land, RZL, tax by one year to allow for the planned 2024 review of maps to take place and to afford the affected people a further opportunity to engage in the RZL tax process. Nowhere in his speech was there mention of the anomalies or difficulties, though. Perhaps doing so was not within his remit, but the Taoiseach has stated clearly on record in the Irish Farmers’ Journal, Agrilandand other agricultural publications that there are anomalies in the scheme. Last year, all local authorities published their RZL maps and outlined the lands that would be zoned or subject to the new tax and that the final maps were to be in place by 1 December 2023. The Taoiseach has acknowledged that anomalies have arisen in cases where farmers who had sought the dezoning of their lands are experiencing difficulty doing so. The Taoiseach has promised to amend these anomalies.

It is outrageous that a full-time farmer who did not ask for his or her lands to be zoned would now be on the hook for a potential tax on them when they are being used actively for agricultural production purposes. I have spoken to fruit and horticultural farmers in north County Dublin who find themselves facing this anomaly. Farming organisations and rural Deputies and councillors have stated that the RZL tax will pose significant difficulties for farmers whose lands have been zoned as residential.

I am cognisant of the significant demand for land for housing – I sit on the Joint Oireachtas Committee on Housing, Local Government and Heritage – and we must bring lands into play, but there are different lands in different parts of the country. This scheme must have some regard for the fact that housing demands in the nodes of the greater Dublin area and the cities are somewhat different than they are in rural parts of, for example, Roscommon and Donegal. This difference has not necessarily been calibrated into the scheme.

There are farmers who, having sought their lands to be dezoned, have been refused by An Bord Pleanála. Indeed, some local authorities are also not supportive of having farmers’ lands dezoned.There are particular issues pertinent to each of those and it would not be appropriate for me to go into them.

As the new tax has clearly been designed to give no exemption to farmland that is zoned residential, farmers who own such land will be liable for the 3% tax. That is totally unacceptable. Farmers who, in many instances, had zonings imposed on them are concerned about the viability of the farms now and the 3% tax scenario going forward. It should be borne in mind that it is not a once-off tax. Many members of the public do not understand that. It is a tax every year on farmland and that will erode profits and margins. Farmers are in business and it will also impact on their cash flow. That is some legacy for agriculture and agricultural land and it definitely needs to be reformed.

I am not here to advocate the scrapping of the RZL tax; rather, I am here to advocate reforms. The Taoiseach has indicated the need for such reform. I am calling on the Government to modify the residential zoned land tax to exclude farmland in cases where landowners sought for the land to be dezoned but the planning authority refused their dezoning applications. The Taoiseach has signalled his commitment to fix the issue and stated that genuine farmland must be excluded where it is actively being used for farm practices.

The RZL tax is universal. It is a one-size-fits-all tax and that is the problem. It does not take into account specific housing needs per county or housing demand or viability. There is a need for reform. I am not here to advocate the abolition of the residential zoned tax but it is a crude instrument and does not work. It is a universal tax but it will not work for everyone. The Irish Farmers Association and the Irish Creamery Milk Suppliers Association, along with other farming bodies and communities, have lobbied the Minister of State's party and others in respect of this issue. There is room for reform.

Jack Chambers (Dublin West, Fianna Fail)
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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.

Victor Boyhan (Independent)
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I thank the Minister of State for that comprehensive response. I acknowledge and accept that this is a key pillar of Government policy in respect of bringing more land into active use for residential housing. I refer now to my only request. The Taoiseach is on record as saying he is proposing some changes to this tax. The RZLT is a universal, one-size-fits-all tax that does not take into account specific housing needs in each county or housing demand and viability in certain counties. This is the area of the scope I would like the Government to examine. It is not specifically mentioned in my matter, but this is my request today.

I again thank the Minister of State for his comprehensive response. This is helpful and will be beneficial to farmers. The extension for one year will give people more time, as the Minister of State rightly said, to make a stronger case. If their requests have been refused, they can now go back to their local authorities or An Bord Pleanála and make a case. It must, though, not be land left aside, not be land hoarding and not be land grabbing. We must put the focus on active land use and this is why I am here today. I thank the Minister of State for taking this matter.

Jack Chambers (Dublin West, Fianna Fail)
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I thank Senator Boyhan for his input on the RZLT. As I noted earlier, this new tax is one of a range of measures in Housing for All, the Government's housing strategy, and is intended to prompt the development of housing. While the demand for housing is greatest in urban centres, there is also housing need in many other parts of the country, as we are all aware. The zoning of land by local authorities reflects the housing need in an area and only residentially zoned and serviced land will be subject to this tax. I reassure the Senator of the Government's continued commitment to ensuring that affected landowners will have an opportunity to engage with their local authority as part of the annual mapping process. This is the purpose of the deferral announced by the Minister for Finance, Deputy Michael McGrath, in his budget speech. The Finance Bill is expected to be published shortly. It will set out in full the detail of the deferral announced by the Minister.

Martin Conway (Fine Gael)
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I understand that the Minister of State is here to take two further matters. With his indulgence and agreement, I ask that we let the Minister of State, Deputy Calleary, go ahead now and take the matter he is here to deal with. This will delay the Minister of State, Deputy Chambers, but, unfortunately, that is just how things have worked out.