Michael Healy-Rae (Kerry, Independent)
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205. To ask the Minister for Finance his views on the fact farmers will have to pay a 3% tax on the value of the land when they might never have any intention of developing (details supplied); and if he will make a statement on the matter. [56385/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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The Finance Act 2021 introduced Part 22A Residential Zoned Land Tax (RZLT) into the Taxes Consolidation Act 1997. The RZLT is designed to prompt residential development by landowners, including farmers, of land that is zoned for residential or mixed-use (including residential) purposes and that is serviced.

RZLT is an annual tax, calculated at a rate of 3% of the market value of the land within its scope. The tax will be due and payable from 2024 onwards in respect of land which fell within the scope of the tax on or before 1 January 2022. Where land is zoned or serviced after 1 January 2022, the tax will be first due in the third year after the year in which it comes within scope.

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 at some point in the future.

Land will be considered to be serviced for the purposes of the tax where it is reasonable to consider that the land has access to, or may be connected to, public infrastructure and facilities, including roads and footpaths, public lighting, foul sewer drainage, surface water drainage and water supply, necessary for dwellings to be developed on the land and with sufficient service capacity available for such development.

A draft RZLT map was published by local authorities on 1 November 2022. The purpose of the draft map is to allow landowners, including farmers, to see if their land is within the scope of the tax. If a landowner sees that their land is included on the draft map and believes that it should not be, there are two separate courses of action open to them:

1. If the landowner believes that the land is not serviced or falls into one of the specific exceptions provided for in the legislation, they can make a submission to the local authority by 1 January 2023 seeking to have the map updated and their land removed from the map. The local authority will consider the submission and make a written determination on whether the land should stay on the map or be removed from it. If the landowner disagrees with the determination, they can appeal to An Bord Pleanála.

2. If the landowner believes that the land should not be zoned as suitable for residential development, they can submit a request to the local authority, again by 1 January 2023, seeking to have the land rezoned. The local authority will consider the request and, if appropriate, they will commence a variation procedure to alter the zoning of the land. This variation procedure, and the local authority’s decision on whether or not to commence one, is part of the normal zoning process.

It should be noted that, while residential properties may appear on the local authority RZLT maps, residential property which is subject to LPT is exempt from RZLT. Further information regarding RZLT maps and related submission/variation processes are available on each local authority website, or at www.gov.ie/rzlt.

Finally, Finance Bill 2022 proposes to introduce an exemption for land that is within the scope of the tax but is subject to contractual arrangements that preclude the landowner from developing it. For the exemption to apply, the contract must have been entered into prior to 1 January 2022, i.e. prior to the introduction of RZLT. For example, where a farmer leased land prior to 1 January 2022 and the requisite conditions are met, the farmer may be able to claim an exemption from the tax for the period of the lease.

Noel Grealish (Galway West, Independent)
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206. To ask the Minister for Finance the status of the working group to consider the taxation of funds, life assurance policies and other investment products, as mentioned during his budget 2023 speech; if he will provide the names of the working group membership; if representatives of the insurance and brokerage industries will be included; and if he will make a statement on the matter. [56416/22]

Paschal Donohoe (Dublin Central, Fine Gael)
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As the Deputy may be aware, the working group he refers to is a recommendation of the Commission on Taxation and Welfare who published their report Foundations for the Future earlier this year.

The Commission considered how the overall balance of taxation might shift in order to sustainably fund public services over the longer-term, and made a range of recommendations aimed at improving the sustainability of the taxation and welfare systems.

Chapter 6 of the report addresses Tax Equity and Base Broadening. One of the recommendations in this chapter is the establishment of a working group to examine and make recommendations for modernising the taxation and administration of investments.

The Commission set out a number of matters that should be considered by the group including: identifying the range of investment products and investors; reviewing the tax treatment of investors in these products; consideration and analysis of the different treatment of different products; options for harmonisation; and anti-avoidance rules.

My Department is currently considering how best to implement the Commission’s recommendations, taking into account the fact that a comprehensive review of this complex area, with a view to presenting options for reform, is a significant task and will, as the Commission’s report notes, require time and resources to be allocated to it. The Commission has recommended that the group include officials from the Revenue Commissioners and my Department, and consult with relevant experts and stakeholders.