Land which is actively used for farming and is “integral to the use of adjoining lands for farming” is excluded from the Residential Zoned Land Tax (RZLT), the Minister for Finance has confirmed.
The RZLT is a new annual tax that will be calculated at 3% of the market value of land “in scope” – which includes land zoned for residential development and land that could be connected to services.
Minister Michael McGrath said the RZLT aims to “prompt residential development” by landowners of land that is zoned for “residential or mixed-use purposes and that is serviced”.
RZLT payable from 2024
The new tax, which comes into effect from 2024 onwards, forms part of the government’s Housing for All Plan to “increase housing supply”.
A draft RZLT map was published by all 31 local authorities last November that detailed the land that will be subject to the new tax.
Farmers and landowners then had until January 1, 2023 to make a submission to their local authority in relation to the draft RZLT map if they believed that the land included on the map did not meet the criteria or to request a change of zoning of their land.
In response to a query from the Fine Gael TD for Sligo-Leitrim, Frank Feighan, on whether there were “exemptions for farmers and agricultural land zoned for a mixture of uses” the Minister for Finance confirmed that “a number of exclusions may apply”.
“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 will only come within the scope of the tax should the land become serviced in the future,” Minister McGrath said.
He also outlined that land which is zoned for a mixture of residential and other uses – and not purely for residential development – is only considered to be within the scope of the RZLT where it is considered to be ‘vacant and idle’.
Maps
“Farming is considered a trade, it is exempted development, and where the land is being actively used for such a purpose, or is integral to the use of adjoining lands for farming, then the lands would not meet the definition of being vacant and idle,” Minister McGrath added.
“As such, farmland which is zoned for mixed use, including residential use, and which is integral to the operation of a farming trade carried out on or beside it, is excluded from the tax, even where such land is serviced and should not be reflected on the RZLT maps prepared and published by local authorities identifying land within the scope of the tax.”
Minister McGrath also detailed that local authorities are currently considering the submissions received from farmers and landowners in relation to the draft maps. He said local authorities will provide landowners with a “written determination” on whether the land should stay on the map or be removed from it on or before April 1, 2023.
“If the landowner disagrees with the determination, they can appeal to An Bord Pleanála on or before May 1, 2023,” he added.