Residential Zoned Land Tax:  Important Dates for ‘Owners’ of Land

PUBLISHED: 25th January 2023

Owners of land, which is zoned for residential development and serviced, may be liable for Residential Zoned Land Tax (RZLT) from 1 February 2024.

Owners of land liable to RZLT should be aware of some important upcoming dates relevant to this new tax.

What is RZLT?

RZLT is an annual tax calculated at 3% of the market value of serviced land that is zoned for residential use on or after 1 January 2022.  It was introduced by the Finance Act 2021.

Owners are liable for this tax and an “owner” is broadly defined in the legislation.  It could include developers with an interest in or the right to develop the land.

Land is generally regarded as being serviced if it has access to sufficient infrastructure to facilitate residential development.  This includes roads, paths, lighting, access to a water supply,  sewers and drainage.

Each local authority prepared and published a draft map to identify land in their functional area deemed to be in scope on 1 November 2022. 

When will RZLT be payable?

The first due date is 1 February 2024. Owners of land in scope on that date must file and pay the RZLT by 23 May 2024.

What is excluded from RZLT?

There are a limited number of exclusions, which include:

-       Existing residential properties on land not exceeding one acre that are liable for Local Property Tax (LPT).

-       Where the plot size for an existing residential properties exceeds one acre, the owner is not liable for RZLT, but must register for RZLT.

-       Sites subject to the Derelict Sites Levy.

-       Land with a mixed-use zoning to include residential, which is used for the operation of the business carried out on or beside it. 

What now?

The deadline for submissions to the local authority regarding the initial draft maps expired on  1 January 2023. Where submissions were made before the deadline, unsatisfactory decisions can be appealed to An Bord Pleanala on or before 1 May 2023.

Supplementary maps will be published on 1 May 2023. Submissions can then be made by 1 June 2023 with a right of appeal to An Bord Pleanala up to 1 September 2023.

Final maps will be  published on 1 December 2023 and will be updated annually from 2025 onwards.

What happens if an owner does not discharge their RZLT obligations?

A failure to meet RZLT obligations could result in Revenue withholding an owner’s tax clearance certificate.

Interest at the rate of 8% per annum will accrue on undischarged RZLT.

Surcharges will arise for any undervaluation of the relevant site in the return to Revenue. This is calculated with reference to the difference between the ascertained market value on the appropriate date and the value returned to Revenue on that date.

Any unpaid RZLT will become a charge on the land. This will impact on any sale which cannot complete until the outstanding liability is paid.

Conclusion

If they have not done so, owners of serviced land zoned on or after 1 January 2022 should check the status of their land on the relevant local authority map.

Check the supplementary maps that are to be published on 1 May 2023.

Lodge any submission in good time before the deadline of 1 June 2023. Remember the deadline for an appeal to An Bord Pleanala. 

Those that will or are likely to own land that is in scope on 1 February 2024 should plan to be ready for file and pay the appropriate amount of RZLT on or before 23 May 2024.