Séamus McGrath (Cork South-Central, Fianna Fail)
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635. To ask the Minister for Finance to review the residential zoned land tax (details supplied). [41169/25]

Frank Feighan (Sligo-Leitrim, Fine Gael)
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641. To ask the Minister for Finance to consider reviewing the current regulations around the residential zoned land tax (RZLT) where a landowner whose landholding is subject to the tax is unable to apply for planning permission on the said lands because there is no capacity within the water or wastewater infrastructure, as outlined by Uisce Éireann; and if he would consider changes to the Finance Acts to provide an exemption to the RZLT until such time as the lands become eligible for planning when the permissions are granted to connect to water services. [41410/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I propose to take Questions Nos. 635 and 641 together.

Finance Act 2021 introduced Part 22A Residential Zoned Land Tax (RZLT) into the Taxes Consolidation Act 1997 (TCA 1997). RZLT is designed to prompt residential development by owners 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, known as a relevant site. Relevant sites are identified by reference to maps published by local authorities, which are revised on an annual basis, and reflect land that the local authority has determined meets the relevant criteria for the tax, being that the land is zoned for residential or mixed-use (including residential) purposes and that it is serviced. While such maps may include residential properties which are subject to Local Property Tax, such properties do not fall within the charge to the tax. The tax is due and payable from 2025 onwards in respect of land which satisfied the relevant criteria in 2022. The first RZLT liability arose on 1 February 2025 and was payable in May 2025, subject to certain exemptions and deferrals.

Regarding Question 41410/25, it is important to note that, to come within the scope of RZLT, land must be both zoned for residential use and serviced. Land 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 determined by local authorities 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.

When considering whether land has sufficient service capacity as regards water supply or wastewater treatment, local authorities are informed by capacity registers published annually by Uisce Éireann. If the relevant local authority determined that the land, while zoned for residential use, was not serviced, it did not appear on the 2025 revised map and, as such, is outside the scope of the tax in 2025. If land does appear on the 2025 revised map, the local authority has determined that it is both zoned for residential use and serviced, and thus is within the scope of the tax in 2025.

Owners of land which appeared on draft revised maps for 2026, which were published by local authorities by 1 February 2025, were provided with an opportunity from 1 February to 1 April 2025 to make submissions regarding whether their land met the relevant criteria, as well as the date from which it met the criteria. Where a local authority determined that land subject to such a submission did meet the relevant criteria for inclusion on the draft map, the legislation affords the landowner an opportunity to appeal the local authority determination to An Bord Pleanála. The outcome of this submission process will be reflected in the 2026 revised maps, due to be published by local authorities on or before 31 January 2026.

In relation to Question 41169/25, Finance Act 2024 introduced a new deferral of RZLT arising in respect of a relevant site in the 12-month period between the grant of planning permission and commencement of residential development of the site. The purpose of this deferral is to allow for pre-commencement actions to be undertaken by the landowner in order to bring the land forward for development, and to work as a continuing incentive to activate the planning permission granted in respect of the relevant site within a timely period.

Where a person intends to build a family home on a site that is subject to RZLT, this deferral may be available should they obtain planning permission in respect of the site and commence development within 12 months of the grant of planning permission. Payment of the tax may continue to be deferred once residential development commences and may ultimately be abated in full if the development is completed before the expiration of the planning permission period.

Barry Ward (Dún Laoghaire, Fine Gael)
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636. To ask the Minister for Finance if he will consider proposing a reduction or eliminating the VAT on clothing repairs and on the renting of clothes to promote the circular economy; and if he will make a statement on the matter. [41178/25]

Paschal Donohoe (Dublin Central, Fine Gael)
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I am advised by Revenue that the VAT rating of goods and services is subject to the requirements of the EU VAT Directive with which Irish VAT law is obliged to comply. In general, the EU VAT Directive provides that all goods and services are liable to VAT at the standard rate, unless they fall within categories of goods and services specified in Annex III of the VAT Directive, in respect of which Member States may apply a lower rate of VAT.

The Directive permits a Member State to apply a reduced VAT rate of not less than 5% to the repair of clothing. On this basis, Ireland already applies its reduced VAT rate, currently 13.5%, to clothing repairs.

The renting or hiring of clothes is not included in Annex III. Therefore, such services are subject to VAT at the standard rate, which in Ireland is currently 23%. There is no discretion under the Directive for Ireland to apply a reduced rate of VAT to the hire of clothing.

Similarly, the Directive does not provide scope for eliminating VAT on any of these services.