A zoned land tax (ZLT), which is being introduced to encourage the use of land for building houses – part of the government’s Housing for All strategy – must not apply to agricultural land, according to the Irish Farmers Association (IFA).

The farming representative body is calling on Minister for Finance, Paschal Donohoe, who announced the 3% tax during his Budget 2022 speech, to clarify the land-tax criteria.

The IFA wants assurance from the minister that actively farmed land will not be impacted by this new tax.

Speaking in the Dáil on budget day, Minister Donohoe said the tax will apply to land that is zoned suitable for residential development, and is serviced, but has not been developed for housing.

“It will, therefore, target land in areas which are zoned residential or which are zoned for a mix of uses, including residential.

“I am not proposing to have any minimum size exclusion as I see the potential for the tax to incentivise the development of small sites in town centres,” he said.

Zoned land tax exclusions

The minister stated that there will be a number of exclusions from the tax such as dwelling houses and their gardens, amenities and infrastructure.

Other exemptions will be defined in the Finance Bill, which is scheduled to be published tomorrow, October 21.

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.


IFA farm business chairperson, Rose Mary McDonagh, has called for clarity on the matter.

“Thousands of farmers have land on the outskirts of towns and villages around Ireland that may be both zoned residential and serviced.

“If this zoned land is agricultural and being actively farmed, it is not being hoarded as an investment and must be excluded from this new ZLT,” she said.

“Once the land is included on a basic payment scheme (BPS) application, it is clear that it is farmed, agricultural land,” she said.

Lessons learned

The farm business chairperson added that lessons must be learned from past policy ambiguities.

“When the vacant site levy was initially introduced, IFA had to engage intensively with the Department of Finance to ensure that agricultural land was, rightly, excluded.”

The same clarity is needed in this instance, she added.