Farmers who can produce a herd number and demonstrate “they are functional” should not have to pay the new residential zoned land tax (RZLT), Independent TD Seán Canney has told the Dáil.

Deputy Canney said many farmers are “completely unaware” that some of their land is being zoned for residential purposes which leaves them in a “very precarious predicament”. 

The RZLT, which comes into effect in 2024, is an annual tax that will be calculated at 3% of the market value of land within its “scope”. 

Local authorities have been given responsibility to prepare and publish maps identifying land within the scope of RZLT – generally this will include land that has been zoned for residential development.

But crucially for farmers the scope of RZLT also includes land that has access to “necessary public infrastructure” for development.

Land tax scope

The first draft maps identifying areas in the scope where land tax will have to be paid were published by local authorities on November, 1 of this year and final maps will be published next year. 

The Independent Galway East TD told the Dáil that farmers should be exempt from RZLT because they are private landowners.

“They are not builders. They own the land to farm it and try to make a living from it. They do not hoard it as an investment,” he said

Deputy Canney some farmers could “find themselves paying this tax for the next 20 years until the land is used up”.

“In many small rural towns around the country, farmers are farming right up to the town boundaries and beyond,” he added

“They are now being caught up in this residential tax, even though they are not hoarding land. Their land has been zoned by the local authority without their knowledge or consent.

“They are fearful that they will be paying tax from money they are trying to eke out of the land in order to stave off something that is beyond their control,” Deputy Canney stated.

The Independent Galway East TD said the government must provide a “derogation so that farmers do not have to pay the tax”.

But the Minister for Public Expenditure and Reform, Michael McGrath, appeared to rule this out.

“Agricultural land zoned for a mixture of uses, including residential, is not in scope as farming is a trade or profession benefiting from an exemption.

“In that respect and in regard to the provision that is there, a facility is being provided for a proposal to be made for land to be dezoned, thereby completely taking a land bank out of this particular new tax,” the minister said.

He also warned that farmers could not have their land zoned and “keep the zoning into the future” while at the same time, avoiding the land tax.

Disproportionate tax on farm families

IFA farm business chair Rose Mary McDonagh  Source: IFA

The Irish Farmers’ Association (IFA) has accused the government of not “fully grasping the inequity” of the RZLT on farmers.

IFA farm business chair Rose Mary McDonagh said:

‘It’s illogical to press ahead with this poorly-designed, ill-targeted, disproportionate tax on farm families, particularly when the situation differs across the country”.

She said the IFA is getting an “increasing number of calls” from farmers who are concerned about the new tax.

The association said it wants a “complete overhaul of the proposed tax” carried out and are calling for “productive farmed land” to be exempt.

The IFA plan to host an online information briefing for farmers to learn more about RZLT on Thursday, December 8 at 8pm.