Seán Canney (Galway East, Independent)
Link to this: Individually | In context | Oireachtas source

231. To ask the Minister for Finance if owners of zoned residential lands will be liable for the RZLT while the landowner is in the process of applying for planning permission and is awaiting the outcome of the process; and if he will make a statement on the matter. [24136/23]

Michael McGrath (Cork South Central, Fianna Fail)
Link to this: Individually | In context | Oireachtas source

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 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.

The primary aim of the tax is to incentivise landowners to engage with planning authorities and seek planning permission on land which is suitably zoned and appropriately serviced and to activate existing planning permissions for housing on such lands. As such, landowners are subject to the tax while they are in the process of applying for planning permission and it is not until development commences that a deferral may apply or the land may fall out of scope.

Section 653AF of the Taxes Consolidation Act 1997 provides for a deferral of RZLT where a grant of planning permission in respect of land within the scope of the tax is the subject of an appeal or request for judicial review by a third party, who is unconnected with the applicant or, if different, the owner of such land. In such circumstances, the development in respect of which permission has been granted cannot commence until such time as the appeal or judicial review concludes; as such, tax arising in the course of the appeal or judicial review is deferred until the relevant process is complete. If the appeal or judicial review concludes with the grant of planning permission being upheld, the tax deferred in accordance with this provision is no longer due and payable. If the appeal or judicial review results in the grant of planning permission being overturned, the tax deferred is payable.

Finance Act 2022 introduced a deferral of RZLT in respect of land which is currently subject to an unauthorised use but meets all other conditions to be excluded from RZLT. Under section 653AFA of the Taxes Consolidation Act 1997, the tax may be deferred if an application is made to the relevant local authority or An Bord Pleanála for retrospective authorisation of the development, pending the outcome of the application. If retention permission or substitute consent is granted, then the land will not be considered a relevant site for the purposes of RZLT from the date the application was made, and the liable person may make a claim for repayment of any RZLT paid after that date. Under section 653AFB of the Taxes Consolidation Act 1997, provision is made for a further deferral of RZLT if an application for retrospective permission or consent is unsuccessful and the owner takes an appeal or seeks judicial review of the decision.

The deferral of RZLT during the retrospective authorisation process, including any associated appeals or judicial reviews, was introduced to support the Department of Housing, Local Government and Heritage’s policy of encouraging landowners to regularise unauthorised development of land, with the RZLT liability accruing where an application is unsuccessful.