Residential Zoned Land Tax – Landowners, are you ready? Action Required in 2025!

January 23, 2025

2025 will be the first year in which landowners falling within the scope of the new Residential Zoned Land Tax (“RZLT”) must register to pay RZLT and file an RZLT return.

RZLT is an annual tax calculated at 3% of the market value of land to which it applies. RZLT applies to land that is zoned for residential use, is serviced (i.e. has access to the necessary public infrastructure to enable housing to be developed) and is included in a map of land within the scope of RZLT published by a local authority. The aim of the tax is to deter land hoarding through incentivising landowners to activate existing planning permission or to engage with planning authorities and seek planning permission on land which is suitably zoned and appropriately serviced. 

For 2025, RZLT is only payable in respect of land which was serviced and zoned for residential use on 1 January 2022 or at any time during 2022 and is based on the valuation of the land on 1 February 2025.

Registration for RZLT should be possible via ROS from the end of January 2025.  RZLT must be paid and a return filed by Friday, 23 May 2025.

Maps have already been prepared by local authorities identifying land within the scope of RZLT. Landowners should review the applicable local authority maps (available now online and in local authority offices) to confirm if their land is included. Residential properties are not liable to RZLT if they are already subject to Local Property Tax (LPT). If your garden or yard is greater than 0.4047 hectares (one acre), is liable to LPT and is included on a RZLT final map, you must still register for RZLT and may be required to file an RZLT return but no RZLT is payable on such land. 

Any unpaid RZLT as well as interest will form a charge on the land.  A fixed penalty of €3,000 applies for failure to register for RZLT.  A penalty of up to 30% of the RZLT liability may be imposed for the late filing of an RZLT return.

Valuation – Action Required!

For the 2025 RZLT return, landowners need to value residential land on 1 February 2025. This value will be used to calculate RZLT for 2025-2027.

Ideally a landowner should engage a professional valuer for this purpose.  While Revenue guidance refers to the possibility of consulting information from local estate agents or valuers, commercial property sales websites such as daft.ie and myhome.ie and newspapers or other media sources, it also states that Revenue does not “endorse or otherwise validate” that these sources may be solely relied upon for valuations for RZLT purposes.

Revenue guidance also states that owners should not rely on one particular site sale and would need to consider a group of sales of similar sites in terms of type, size, location, zoning and status of planning permission.  To the extent that a site is deemed to have been undervalued, a surcharge of up to 30% could be imposed depending on the level of the undervaluation.

Exclusions/Exemptions/Deferrals from RZLT – Do you qualify?

Certain land is not liable, including (but not limited to) land with physical conditions which may prevent the ability to provide housing on the land (e.g. contamination) or residential zoned land which is used by a business liable to pay commercial rates and which provides services to residents of adjacent residential areas.  Other exclusions also apply.

There is a new exemption for landowners who submit a change in zoning request for their lands in the period beginning on 1 February 2025 and ending on 1 April 2025 subject to certain conditions.  To qualify for this exemption, the zoning submission must be acknowledged by the local authority and the lands must not be the subject of an extant planning permission or residential development nor the subject of one or more current planning applications for residential development.  The exemption must be claimed in the annual RZLT return.

In certain circumstances RZLT may also be deferred and/or abated.  RZLT won’t apply for a period of 12 months from the date of grant of planning permission or until the land is sold to a third party, whichever occurs earlier.  The deferral will continue once the development has commenced i.e. a commencement notice has been lodged with the relevant local authority.  In these scenarios, provided the deferrals are claimed in the annual RZLT return, no RZLT is payable. If the residential development is fully completed prior to the expiry of planning permission, no RZLT will ultimately become payable.

Please contact Purcell McQuillan if you require any further details in relation to the type of land that might qualify for an exclusion, exemption or a deferral from RZLT as the above is not an exhaustive analysis of the various exclusions and deferral scenarios that might apply. 

Summary of Actions Required

Is land you own included in the final map issued by your local authority? If “yes” then:

• From end of January 2025 register for RZLT via ROS.
• Obtain a valuation as at 1 February 2025.
• The liability will be 3% of the market valuation on 1 February 2025.
• Pay the RZLT liability and file the RZLT return on or before 23 May 2025.  If you qualify for an exemption/ deferral/abatement from RZLT, this must also be claimed in the relevant RZLT return.
• Keep detailed records in relation to the valuation of land so Revenue can verify what RZLT is due.

Is the yard/garden of your residential property greater than one acre, liable to LPT and included in the final map issued by your local authority? Yes

• From end of January 2025 register for RZLT via ROS.  The ROS facility may also require you to file a RZLT return.

If you need any assistance in ensuring that you are complying with RZLT please contact your Purcell McQuillan contact.

This summary is intended as a general guide and has been prepared based on existing Revenue guidance and tax legislation. No action should be taken without obtaining professional taxation advice. If you require any advice on the above, please do not hesitate to contact Purcell McQuillan Tax Partners Ltd on 01 668 2700 or email your usual PMQ contact.

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