The Irish Farmers’ Association (IFA) has engaged senior counsel to examine if the new Residential Zoned Land Tax (RZLT), which will come into force from next February, is “unconstitutional”.
The IFA today (Tuesday, April 25) confirmed that senior counsel has been engaged to examine all potential aspects of the new legislation including its implementation, the operation of the tax and constitutional issues.
The RZLT is a new tax that will come into force from next February on land that is zoned for residential use and has access to services such as water supply, roads and lighting.
It is being introduced as part of the government’s Housing for All plan to 2030.
The tax – which will be calculated at 3% of the market value of land “in scope” – will operate on a self-assessment basis and according to Revenue, farmers and landowners will be able to register for the tax from late-2023.
Last year all 31 local authorities published draft RZLT maps outlining which particular lands will be subject to the new tax.
The IFA has warned that the new land tax will have a “significant impact on many farmers with lands adjoining towns and villages throughout rural Ireland”.
According to Rose Mary McDonagh, IFA’s Farm Business chair, the fact the tax is set at 3% of the market value of the land is disproportionate to the income that is being generated on farms.
The IFA has provisionally calculated what the potential annual liability could be in certain cases for some farmers and landowners
McDonagh said the organisation is now dealing with an increasing number of calls from farm families about the RZLT.
“It is causing an awful lot of farmers a lot of issues and the fear of what could be coming down the line from a tax point of view is absolutely crippling and frightening for many, many farmers.
“We completely understand there is a housing need but our main concerns are that ultimately, genuine farmers must be protected and exempted from this land-hoarding tax.
“Any tax or policy needs to be fair and transparent,” McDonagh said.
The IFA believes the RZLT discriminates against “genuine, active farmers” and has warned that the tax could “force farm families out of a business and home”.
It claims the RZLT is “nothing more than a land grab and revenue-generating instrument”.
The farming body has also argued that the tax will create an additional new, annual cost for farmers which does not take account of an individual farmer’s specific circumstances.
According to the IFA the RZLT could result in farmers having to pay an annual tax that could be “20 times higher than what a suckler farmer could yield and 15 times higher than other cattle enterprises could yield and 16.5 times what a sheep enterprise can yield and 10 times higher than the tillage yield”.
McDonagh said there is a huge lack of awareness about the tax and about “inconsistencies” by local authorities in relation to the tax.
In an online meeting hosted today by the IFA, the organisation highlighted that the RZLT will operate on a self-assessment basis.
Revenue had previously warned that if landowners fail to register for RZLT or underpay the amount of RZLT due, tax and interest will accrue as a charge on the land.
The IFA has urged farmers or landowners who disagree with their local authority’s decision to include their land in the current draft RZLT maps to lodge an urgent appeal with an Bord Pleanála.
According to the farming organisation all submissions and appeals must be lodged – in writing – with an Bord Pleanála by May 2.
Meanwhile, the government today confirmed new measures under its Housing for All plan which it said “would make it cheaper to build and refurbish homes, speed up home building and drive down building costs across the board”.
One of these measures is that the Vacant Property Refurbishment Grant will be increased from €30,000 to €50,000 for vacant properties and from €50,000 to €70,000 for derelict properties.
Eamon Ryan, Minister for Environment, Climate and Communications, said the government had published “radical proposals” to ensure that communities would gain from land value increases from rezoning.
“Taken with implementation of the new Residential Zoned Land Tax, we are addressing land speculation and land hoarding, major sources of land mismanagement.
“These reforms will help ensure housing gets delivered without unnecessary speculative costs from land mismanagement,” the minister added.