Minister for Finance Jack Chambers has said he is currently “exploring all options” on resolving the issues for farmland under the Residential Zoned Land Tax (RZLT).
The minister said that if a “viable alternative” emerges to deferring the tax – which is set to come into force on February 1 – then he would pursue that option.
Last week it emerged that, after talks with ministerial and party colleagues in Fianna Fáil – including Minister for Agriculture, Food and the Marine Charlie McConalogue – Minister Chambers had proposed to defer the RZLT for one year to ensure active farmland will be excluded.
Concerns have been repeatedly raised that the scope of the tax would take in sizeable portion of active farmland.
It’s understood that Minister Chambers would have announced a deferral of the tax in the upcoming Budget 2025.
However, while the proposal to defer the tax was widely welcomed by farm organisations and many politicians from largely rural constituencies, there has also been strong opposition expressed to the proposal, not only from opposition but also within government from the Green Party.
In a statement to Agriland, Minister Chambers said: “All of the parties in government introduced and fully support the (RZLT). The policy intention of the tax is to activate vacant land for residential purposes.
“In certain circumstances where land is not vacant and is in use by farmers, it has become clear that the tax could have unintended consequences which could risk the viability of their farms. This would be unfair, disproportionate and inequitable.
Last year, a decision was taken to defer the tax to undertake a process where applications could be made to local authorities to request a rezoning of land. Farmers were able to request a rezoning under this mechanism.
The minister said: “That process is coming to a conclusion, and the latest information I have received from the Department of Housing is that the vast majority of rezoning requests made to local authorities have not been approved. Therefore, this land would currently be subject to this tax in 2025 if no further action is taken.
According to the minister, the advice he has received so far is that a new mechanism is required to exclude active farmers and that the introduction of such a mechanism would require a deferral.
“This is why I stated [last week] that I am working on proposals to defer the tax so that a mechanism can be progressed to exclude active farmers.”
Minister Chambers said he would be open to allowing the tax to be implemented as planned in February, if an alternative can be found that would exclude actively-used farmland.
“I am exploring all options and if a viable alternative to a deferral emerges which achieves the same outcome of excluding land in active agricultural use, then I will pursue this course,” he said.
The minister added: “My sole objective is to bring a solution forward which ensures that active farmers are not liable for this tax and that suitable land is made available for housing development.
He said that the mechanism and timeline for this is subject to ongoing policy and legal advice, and that he will update party leaders on this in advance of the budget so that the “unintended consequences of the tax can be addressed”.