Land that is being used as part of a “functional farm” should be excluded from the Residential Zoned Land Tax (RZLT), which will come into force from next year, a TD has urged.
It has been estimated that farm families could have to pay €450/ac from next year on land that is designated as in “scope” for the new tax.
According to the Minister for Finance, Michael McGrath, the RZLT aims to “prompt residential development” by landowners of land that is zoned for “residential or mixed-use purposes and that is serviced”.
But the Independent Galway East TD, Sean Canney said there should be exemptions from the tax for farmers if they can prove they have “been actively farming the land”.
Deputy Canney said that if farmers have records to prove they have received grants from the Department of Agriculture, Food and the Marine, such as the Basic Income Support for Sustainability (BISS), then there should be no doubt that they are “active” farmers.
RZLT
The new tax, which comes into effect from February 1, 2024, forms part of the government’s Housing for All Plan to “increase housing supply”.
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.
But the Independent Galway East TD has urged the government to confirm that the RZLT will not apply to land that is being used specifically for farming purposes.
He has said the tax is simply a “financial burden on farm families”.
Deputy Canney added:
“I have been contacted by many farmers and their families who are worried farm families will be forced to sell land that has been in their family for generations and in many cases, is unlikely to be developed.
“Revenue has stated that certain properties are excluded from the tax and that landowners can appeal the decision if their lands are included.
“However, this is not an acceptable process, and it is putting the burden of proof onto the farmer.”
Farm families
He fears that farm families could end up paying tax on land “based on a value that they will not benefit from as the land will not be used for residential purposes”.
“The exclusion of properties that that currently liable for the local property tax is a sound policy but the same does not hold through for farmers who are making an active living farming their land but just happens to be in a zoned area,” he said.
“This tax is aimed at property developers who are hoarding the land to make a profit but imposing the same tax on farmers who are farming land for generations and dependent on that land for income.”