Ken O'Flynn (Cork North-Central, Independent Ireland Party)
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64. To ask the Minister for Finance the reason the residential zoned land tax (RZLT) applies to a developer who is proceeding to immediately develop lands for an approved housing body and who has served a commencement notice under the planning permission in the past twelve months (details supplied); if this was intended; and if so, the way this fit with the stated policy that the RZLT was being introduced in order to penalise developers who were not developing their land with all due speed. [6721/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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Finance Act 2021 introduced Part 22A Residential Zoned Land Tax (RZLT) into the Taxes Consolidation Act 1997. RZLT is designed to prompt residential development by owners of land that satisfies the relevant criteria for the tax, that being that the land 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 is due and payable from 2025 onwards in respect of land which satisfied the relevant criteria on 1 January 2022, or in the course of 2022, as where land satisfies the relevant criteria after 1 January 2022, RZLT will be first due in the third year after the year in which it satisfies the relevant criteria. RZLT first arose on 1 February 2025 and the 2025 liability is payable by 23 May 2025, subject to certain exceptions.

The objective of RZLT is to activate land for residential development. To this end, the legislation underpinning RZLT provides for the tax to be deferred in certain circumstances, including where planning permission is obtained and, within 12 months of the grant, works are commenced on the site. Such a landowner is not required to pay the annual RZLT liability arising on 1 February by 23 May in each of the years to which the planning permission relates where certain conditions are met. The RZLT deferred in these circumstances will, on the making of a claim, not be payable where development is completed within the timeframe set out in the planning permission and a certificate of compliance on completion is in place to evidence same.

Tax deferred on foot of the grant of planning permission and the commencement of residential development within 12 months of that grant becomes due and payable in certain circumstances, including where a relevant site is subject to a change of ownership without the lodgement of certificates of compliance on completion in respect of all residential development as outlined in the planning permission, apart from where the transfer is between companies which are members of the same group and certain conditions are met. As such, should a developer have deferred RZLT following the commencement of residential development on a relevant site, and the site is later sold to an Approved Housing Body without the lodgement of certificates of compliance on completion in respect of all residential development as outlined in the planning permission, the RZLT deferred by the developer in such circumstances becomes due and payable.

Before the sale of a relevant site is completed, the vendor is required to pay any unpaid RZLT due in respect of a liability date falling before the date of sale, including where deferred tax becomes due and payable as outlined above, and to submit any outstanding returns.

You should note that RZLT is kept under review on an ongoing basis by my officials.