The government is to defer the implementation of the Residential Zoned Land Tax (RZLT) for one year to ensure active farmland will be excluded, Agriland understands.
The tax was due to come into force on February 1 next year. Concerns have been repeatedly raised that the scope of the tax would take in sizeable portions of active farmland.
Now, political sources have indicated that the tax will not be implemented next February as envisaged, but will be deferred by a year in order to exclude this farmland.
It is understood that it is the “clear intention” of government that the tax would not include commercially-farmed land within its scope.
It is also understood that government will work on developing a mechanism whereby farmland can be excluded.
According to sources, government has given a “clear undertaking” that it is not the intention for farm families to be impacted by the tax, and that efforts to develop a solution to that issue will be made before it is implemented.
The RZLT will be applied at a rate of 3% of the land’s market value and is aimed at increasing housing supply by activating zoned and serviced residential development lands (including mixed-use lands) for housing.
However, since the tax’s inception, farm organisations, as well as many politicians, have raised concerns that actively-farmed agricultural land on the outskirts of urban settlements may also fall within its scope.
Earlier this month, the Irish Farmers’ Association (IFA) had called on Minister for Finance Jack Chambers to “act now” and announce that actively farmed land will be exempt from the RZLT.
Bill O’Keeffe, the IFA’s national farm business chairperson, said that a “significant” amount of farmland, in almost every county, could fall within the scope of the tax. He also told Agriland that “some farmers aren’t even aware that they are within the scope of the tax yet”.
Agriland reported earlier this month that that RZLT maps published by the local authorities, identifying land within the scope of the tax, do not provide an indication of the current land use for that land, which means they do not show whether or not zoned land is in agricultural use.
Ahead of Budget 2025, O’Keeffe emphasised the “critical importance” of excluding all actively-farmed agricultural land, saying that “this situation is causing unnecessary stress and huge worry among many farm families throughout the country”.