The Dáil has been told that a “one-size-fits-all” residential zoned land tax (RZLT) “does not help” and that a further review of the new tax is needed.

The Fine Gael TD for Sligo-Leitrim, Frankie Feighan, highlighted that the tax is scheduled to come into place on February 1, 2025 but he said “local authorities need to to identify demand and growth centres” in relation to RZLT.

He said the current “one-size-fits-all does not help in my constituency of Sligo-Leitrim or in south Donegal”.

RZLT

In response to Deputy Feighan, the Taoiseach Simon Harris said that the government had decided to “proceed with this tax because it is important in a housing crisis there is not any land hoarding”.

“It is also important that the tax needs to be implemented in a fair manner.

“There is a difference between land hoarding and people who are carrying out a variety of activities, including farming and agricultural work,” the Taoiseach added.

He pledged yesterday (Wednesday, October 23) in the Dáil that the government will continue to “closely monitor as the tax is in place”.

“We are trying to get the balance right here.

“We are taking a number of steps to exclude active farmers, which is important. We will continue to keep implementation of this tax under review,” the Taoiseach added.

Residential development

The Minister for Finance, Jack Chambers, previously set out earlier this month that the aim of this RZLT “is to increase the supply of land for building” and that it will be charged at 3% of the market value of the land every year.

The Sinn Féin spokesperson on Finance, Pearse Doherty, had tabled a question to the Minister for Finance on whether a developer would be exempt from the RZLT “if they are leasing the land for economic activity such as farming”.

Minister Chambers said: “The tax will be due and payable from 2025 onwards in respect of land which fell within the scope of the tax on or before January 1, 2022, or which first became both zoned for residential use and serviced in the course of 2022, as where land is zoned or serviced after January 1, 2022, the tax will be first due in the third year after the year in which it comes within scope.”

He said there “are existing exemptions that apply to RZLT” one such exemption applies to land that is within the scope of the tax but is subject to a contract that was entered into prior to January 1, 2022.

“For 2025, if landowners seek to have their land rezoned, in order to reflect economic activity they carry out on their land, an exemption to the RZLT will apply for one liability,” the minister added.