Approximately 8-9,000 hectares (ha) of land will fall within the scope of a new ‘zoned land tax’ (ZLT) by the end of 2022.
The tax will apply to land that is zoned suitable for residential development and is serviced, but that has not yet been developed for housing.
Much of the 8-9,000ha of land that will come under this tax by the end of 2022 will be in agricultural use, according to a Department of Finance spokesperson.
But if the land is zoned for housing, while being farmed, the landowner can apply to the local authority to have the land de-zoned.
The ZLT was announced by Minister for Finance, Paschal Donohoe last week as part of Budget 2022 with the aim of using land for building houses under the government’s Housing for All strategy.
De-zoning option
In a response to Agriland about whether this ZLT will impact agricultural land, the Department of Finance stated:
“It is fair to assume that the bulk of the 8,000-9,000ha referred to above will be in agriculture use and, therefore, if we apply a 90% rate it would mean that somewhere between 7,000-8,000ha would come within the scope of the tax.
“Where land is zoned residential and is serviced, there will be an option for a person to apply to have their land de-zoned if, for example, a farmer wishes to continue to farm their land rather than develop it or sell it for development.
“This will follow a due local authority process,” according to a Department of Finance spokesperson.
It added that, overall “99.8% of agricultural land will be outside the scope of this tax”.
Zoned land tax – details
The tax will operate on a self-assessment basis, will be administered by the Revenue Commissioners, and will replace the vacant site levy when it comes into force.
According to the Finance Bill 2021, which was published yesterday (Thursday, October 21), local authorities will prepare and publish maps to identify the land that will come within the scope of the tax.
There will be a two year lead-in time for land zoned before January 2022, and a three-year lead-in time for land zoned after January 2022.
The tax will be calculated a rate of 3% of the market value of land.
The ZLT has been criticised, with opponents highlighting that it is 4% less than the current vacant site levy.