Séamus McGrath (Cork South-Central, Fianna Fail)
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518. To ask the Minister for Finance to clarify that the application of the residential zoned land tax (RZLT) ceases once construction commences on a site; if construction has commenced on a site, but subsequently stops for a prolonged period, if the RZLT will reapply at some point or if some other penalty may apply to a developer for letting an unfinished site sit there for such a period. [45665/25]

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 (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.

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; this deferred tax is known as pre-development deferred RZLT.

The commencement of non-residential development on foot of a grant of planning permission in respect of a relevant site, as evidenced by the lodgement of a commencement notice, brings so much of the relevant site as is being developed for non-residential purposes outside the scope of the tax. Any pre-development deferred RZLT relating to the relevant site, or portion of the relevant site, that is being developed for non-residential purposes is no longer due and payable. If works comprising substantial activity are not commenced within a reasonable period of time after the lodgement of the commencement notice, the site will not cease to be a relevant site and RZLT will continue to be charged in respect of the site.

Where planning permission is granted for residential development, payment of RZLT arising after the commencement of development may be deferred. The RZLT so deferred, and any pre-development deferred RZLT, will, on the making of a claim, not be payable where the residential 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.

Should works on the site permanently cease prior to the expiry of the planning permission period, without the lodgement of certificates of compliance on completion in respect of all of the residential development outlined in the planning permission, the tax deferred up to that point becomes due and payable. The liable person must amend all returns in which the deferral was claimed and pay the RZLT that was deferred and interest accordingly.