Article

Residential Zoned Land Tax (“RZLT”): Key Considerations for Landowners

By:

Sasha Kerins,

Jayne Peacocke

29 Jan 20256 min read

Residential Zoned Land Tax (RZLT) was introduced by Finance Act 2021 as part of the Government’s 'Housing for All - a New Housing Plan for Ireland'.

Contents

What is RZLT?

RZLT is intended to act as a stimulus to induce residential development on land earmarked by local authorities as suitably serviced and zoned wholly or partly for residential purposes.

For land that is within the scope of RZLT, an annual 3% tax will apply based on the market value at the valuation date with the first RZLT charge payable in 2025 for land within scope on 1 January 2022. While there are a number of exclusions from RZLT, it will operate as a self-assessed tax which places filing and payment obligations on landowners. Where the land is zoned as suitable for residential development and/or serviced after 1 January 2022, tax will be first due in the third year after it comes within scope.

The primary objective of RZLT is to alleviate Ireland’s housing shortage by encouraging the use of zoned land for development. However, due to the broad nature of the legislation, it may result in significant recurring tax filing requirements and potential tax liabilities for many landowners.

Land subject to RZLT and liable persons

The persons liable to pay RZLT will be the “owners” of a “relevant site”. “Owners” is widely defined and includes any person who holds an interest or right to carry out development on or to the land. This may also include certain developers with contractual rights to develop such land.

A “relevant site” is determined to be land that has been identified in the relevant local authorities’ RZLT map and is zoned solely or primarily for residential use or a mixture of uses including residential. This land must also be:

serviced or it is reasonable to consider that the land may have access to the services necessary for housing to be developed; and
not affected in its physical condition that would exclude the provision of residential development.

Exclusions

Land that comes within the following categories are excluded from the scope of RZLT:

Current residential property that includes garden/yards under 1 acre. Residential property with gardens/yards over 1 acre are in scope and the owner must register for RZLT.
Residential zoned land that is permitted for use in a business that is liable to commercial rates and provides services to local residents.
Mixed zoned land that includes residential zoning where the land is used by a business carried out on or beside the land unless the land is vacant or idle.
Land subject to the Derelict Sites Levy that is payable in accordance with the Derelict Sites Act 1990.
Land that is subject to a statutory designation that may preclude development.
Land that is required or occupied for certain social, community or governmental infrastructure purposes.
Legislation provides for a proposed exclusion for land that has been included in a written contractual obligation that concluded prior to 2022 and precludes development on the land, subject to further conditions. This exclusion does not apply to connected parties.

The RZLT legislation provides for surcharges and interest for non-compliance including late payment interest, failure to make timely returns and undervaluation of land. A penalty of €3,000 will apply where the landowner does not register for RZLT where required to do so.

In addition, unpaid RZLT and interest will accrue as a charge on the land.

There will also be RZLT clearance requirements where a liable person intends to sell land or there will be a change in ownership (e.g. a gift). Revenue have recently released guidance in relation to the procedure where in-scope land is sold or transferred.

Landowners may have an option to abate, defer or seek repayments in certain circumstances (e.g. where residential development has commenced or planning permission granted is subject to an appeal).

Valuation

RZLT is a self-assessed tax based on the market value of the relevant site on the valuation date. This means that it is up to the liable person in the first instance to value the site and to declare that market value to Revenue. Revenue guidance suggests the following resources which may be helpful when determining the value position:

information from local estate agents or valuers;
commercial property sales websites;
newspapers or other media sources.

It is important that Revenue has also noted that when referring to the above sources, comparisons should be drawn to sites that are similar to the relevant site, for example, in type, approximate size, location, zoning, or status of planning permission. Revenue may engage an expert to assist in ascertaining the value of the land.

Property consultancy firm Lisney has advised landowners to engage a qualified valuer to carry out a market value assessment that meets ‘Red Book’ standards.

A valuation, particularly of development land, is a meticulous process. It is not as simple as applying the sale price per acre of one site to another. There are a substantial number of factors that must be considered, and allowances must be made for how these factors impact future development. This is particularly important given that the Act allows for surcharges to apply if the land is later found to be undervalued.

Aoife Brennan Senior Director at Lisney

2025 rezoning

Prior to October’s Budget, there was an expectation that ‘actively farmed land’ in-scope of the RZLT would be carved out as an exemption. This did not materialise in Finance Act 2024 but farmers can avail of an exemption if they seek to have land rezoned to reflect its agricultural use.

Finance Act 2024 provides an opportunity for a rezoning request to be submitted to the relevant Local Authority in respect of land which appears on the revised map for 2025 published on 31 January 2025.

Where such a rezoning request is made, an exemption from RZLT may be claimed for 2025 where certain conditions are met.

It is important to note that to claim this exemption, you must register for RZLT and file a 2025 RZLT return by 23 May 2025.

Exemption from RZLT due to legal proceedings

Finance Act 2024 introduced an exemption from RZLT (previously a deferral) which will apply if judicial review proceedings are taken, or an appeal of a judicial review determination is made, by an unconnected third party.

This has been introduced by Revenue to consider situations where land is not capable of being developed while judicial review proceedings are ongoing. This exemption applies from the date of the grant of the planning permission the subject of which the judicial proceedings are ongoing for, until the end of the proceedings.

Key dates for landowners

27 January 2025: Registration for RZLT is live and available through Revenue Online System. Revenue have published guidance for the registration system.
31 January 2025: Final maps published by local authorities.
01 February 2025: RZLT will be chargeable for land that met the RZLT criteria on 01 January 2022 or in the course of 2022.
23 May 2025: Annual RZLT return and payment. This return has to be submitted even if a deferral is being claimed.

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